Johann, Josef, and Richard are partners in the Strauss Partnership with the following capital and profit and loss:
- Johann 25% $28,000
- Josef 25% $32,000
- Richard 50% $40,000
Richard retires receiving $60,000 cash from the partnership in full settlement of his partnership interest. What will Johann and Josef's capital balances be after Richard's retirement. No goodwill is recorded.
- Johann = $18,000; Joseph = $22,000
- Johann = $28,000; Joseph = $32,000
- Johann = $10,000; Joseph = $10,000
- Johann = $38,000; Joseph = $42,000