. Marty (M) retires from MNO partnership, an accounting firm. The partnership has the following balance sheet:

AssetFMVABLiab/EquityFMVAB

Cash $240,000 $240,000Capital,M$300,000$100,000

Accounts rec. $300,000 $0Capital N$300,000$100,000

Land$360,000 $60,000Capital O$300,000$100,000

Total$900,000 $300,000Total$900,000$300,000

The partnership pays Marty $150,000 a year for 2 years.

a. What are the consequences to Marty in Year 1?

b. How would the consequences in Year 1 be if instead Marty received $200,000 a year for 2 years?