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?

Question

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The goodwill method involves recognizing the implied goodwill in the business when a partner retires. If Roberts is paid $160,000 and this amount is based on an independent appraisal, the difference between the book value of the business and the appraisal value is considered goodwill. This goodwill is then allocated to the remaining partners based on their profit-sharing ratios. If Peter's capital balance is adjusted for this goodwill, it would be $110,000.

Roberts Retires and Is Paid $160,000 Based on an Independent