On June 30, 2019, the balance sheet for the partnership of Al, Carl, and Paul, together with their respective profit and loss ratios, were as follows: Al has decided to retire from the partnership. By...

On June 30, 2019, the balance sheet for the partnership of Al, Carl, and Paul, together with their respective profit and loss ratios, were as follows:

Al has decided to retire from the partnership. By mutual agreement, the assets are to be adjusted to their fair value of $220,000 at June 30, 2019. It was agreed that the partnership would pay Al $61,200 cash for Al’s partnership interest, including Al’s loan, which is to be repaid in full. No goodwill is to be recorded. After Al’s retirement, what is the balance of Carl’s capital account?

(a) $36,450.

(b) $39,000.

(c) $46,450.

(d) $47,000.

(AICPA adapted)