Problem
The partnership of Krueger, Bacci, Robinson, and Schuh has the following capital balances as of the end of the current year:
Krueger $ 120,000
Bacci 100,000
Robinson 90,000
Schuh 80,000
Total capital $ 390,000
a. Assume that the partners share profits and losses 3:3:2:2, respectively. Robinson retires and is paid $108,000 based on the terms of the original partnership agreement. If the goodwill method is used, what is the capital balance of the remaining three partners?
b. Assume that the partners share profits and losses 4:3:2:1, respectively. Krueger retires and is paid $300,000 based on the terms of the original partnership agreement. If the bonus method is used, what is the capital balance of the remaining three partners?