Bishop has a capital balance of $120,000 in a local partnership, and Cotton has a $90,000 balance. These two

Bishop has a capital balance of $120,000 in a local partnership, and Cotton has a $90,000 balance. These two

partners share profits and losses by a ratio of 60 percent to Bishop and 40 percent to Cotton. Lovett invests $60,000 in cash in the partnership for a 20 percent ownership. The goodwill method will be used. What is Cotton’s capital balance after this new investment?

Multiple Choice

• $99,600
• $102,000
• $112,000
• $126,000