Assume, after all accounts have been brought up to date, that Partner A has a capital balance of $40,000, Partner B has a capital balance of $30,000 and Partner C has a capital balance of $35,000 . Partner B withdraws with a cash settlement of $40,000 . The partnership agreement states that any gain or loss is divided according to the ratio of their capital interests. How will Partner A's and
Partner C's capital accounts be affected?
a. Partner A increased $5,000 and Partner C increased $5,000.
b. Partner A decreased $5,000 and Partner C decreased $5,000.
c. Partner A increased $5,333 and Partner C increased $4,667.
d. Partner A decreased $4,667 and Partner C decreased $5,333.
e. Partner A decreased $5,333 and Partner C decreased $4,667.
e
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