Peter, Roberts, and Dana Have the Following Capital Balances; $80,000

question 40

Multiple Choice

Peter, Roberts, and Dana have the following capital balances; $80,000, $100,000 and $60,000, respectively.The partners share profits and losses 20%, 40%, and 40% respectively.Roberts retires and is paid $160,000 based on an independent appraisal of the business.If the goodwill method is used, what is the capital balance of Peter?

• A) $20,000.
• B) $60,000.
• C) $110,000.
• D) $120,000.
• E) $230,000.

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Definitions:

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