Liam, Michael and Noah own interests in the LMN Partnership.Their current capital account balances are as follows:

Liam

$250,000

Michael

300,000

Noah

200,000

Partnership income is shared in a 3:5:2 ratio.Olivia buys a 20% interest in the partnership by acquiring 20% of each existing partner's interest, paying the three partners a total of $175,000.Partnership identifiable net assets are currently reported at amounts approximating fair value.

Using the transfer of capital interests approach, Olivia's initial capital balance after entering the partnership is:

a.$175,000

b.$170,000

c.$215,000

d.$150,000