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On June 30, the condensed balance sheet for the partnership of Eddy, Fox, and Grimm,...

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Accounting

On June 30, the condensed balance sheet for the partnership of Eddy, Fox, and Grimm, together with their respective profit and loss sharing percentages, was as follows: Assets, net of liabilities $320,000 Eddy, capital (50%) $160,000 Fox, capital (30%) 96,000 Grimm, capital (20%) 64,000 Total $320,000 Eddy decided to retire from the partnership and, by mutual agreement, is to be paid $180,000 out of partnership funds for his interest. Total goodwill implicit in the agreement is to be recorded.

Assume instead that Eddy remains in the partnership and that Hamm is admitted as a new partner with a 25%interest in the capital of the new partnership for a cash payment of $140,000. Total goodwill implicit in the transaction is to be recorded. Immediately after admission of Hamm, Eddys capital account balance should be

a.$280,000

b.$210,000

c.$160,000

d.$140,000

Please provide an explanation for answer, why is correct and how you got it. Thanks

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