In the SS partnership (to which Fozzie seeks admittance), the capital balances of Bert, Ernie, and Gonzo, who share income in the ratio of 35:55:10 are:

Based on the preceding information, if the EXACT METHOD is used (i.e, no goodwill or bonus is recorded) how much will Fozzie be required to invest for a 20% interest?

a)

$ 120,000

b)

$ 40,000

c)

$ 50,000

d)

$ 160,000