Dawn Garret and Josh have partnership capital account balances of $225000 $450000 and $105000 respectively. The income sharing ratio is Dawn 50%; Garret 40%; and Josh 10%. Dawn desires to withdraw from the partnership and it is agreed that partnership assets of $195000 will be used to pay Dawn for her partnership interest. The balances of Garret's and Josh's Capital accounts after Dawn's withdrawal would be

A) Garret $450000; Josh $105000.
B) Garret $474000; Josh $111000.
C) Garret $426000; Josh $99000.
D) Garret $435000; Josh $90000.

Dawn's capital account balance is $225,000, which is 25% of the total partnership capital ($900,000). Since she gets 50% of the income, her share of the income for the year must have been $225,000 (her capital account balance) x 50% = $112,500.
Garret's share of the income for the year would be $900,000 x 40% = $360,000.
Josh's share of the income for the year would be $900,000 x 10% = $90,000.
Since the total income for the year is ($112,500 + $360,000 + $90,000) = $562,500, Garret's share of the income after Dawn's withdrawal would be $360,000/$562,500 x ($900,000 - $195,000) = $474,000.
Josh's share of the income after Dawn's withdrawal would be $90,000/$562,500 x ($900,000 - $195,000) = $111,000.
Therefore, Garret's capital account balance after Dawn's withdrawal would be $450,000 + $474,000 = $924,000, and Josh's capital account balance after Dawn's withdrawal would be $105,000 + $111,000 = $216,000.