Nunes, Orta and Paulo are partners providing engineering services. Relevant data regarding income-sharing relationships and capital balances are as follows:

Partner	Capital Balance	Income Share
Nunes	$ 250,000	20%
Orta	180,000	30%
Paulo	150,000	50%
Totals	$ 580,000	100%

Nunes retires and receives $220,000 in cash from the partnership. Partnership net assets are recorded at amounts approximating fair value, except its equipment, currently reported at $500,000, is overvalued. If the partial goodwill approach is used, the equipment account is reduced by: