Cline, Watters, and Nettles formed a partnership on January 1, 20X1, with investments of $100,000, $150,000, and $200,000, respectively. For division of income, they agreed to
(1) An interest of 10% of the beginning capital balance each year;
(2) An annual compensation of $10,000 to Watters; and
(3) Sharing the remainder of the income or loss in a ratio of 20% for Cline and 40% each for Watters and Nettles.
Net income was $150,000 in 20X1 and $180,000 in 20X2. Each partner withdrew $1,000 for personal use every month during 20X1 and 20X2.
What was Nettles's capital balance at the end of 20X1?
a. $254,000
b. $246,000
c. $238,000
d. $224,000
e. $200,000