Note: This Is a Kaplan CPA Review Question

question 52

Multiple Choice

Note: This is a Kaplan CPA Review Question
James Dixon, a partner in an accounting firm, decided to withdraw from the partnership. Dixon's share of the partnership profits and losses was 20%. Upon withdrawing from the partnership he was paid $74,000 in final settlement for his interest. The total of the partners' capital accounts before recognition of partnership goodwill prior to Dixon's withdrawal was $210,000. After his withdrawal the remaining partners' capital accounts, excluding their share of goodwill, totaled $160,000. The total agreed upon goodwill of the firm was

• A) $250,000.
• B) $140,000.
• C) $160,000.
• D) $120,000.