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Question - A, B and C decided to form ABC Partnership. It was agreed that A will contribute an equipment with assessed value of P100,000 with historical cost of P800,000 and accumulated depreciation of P600,000.
B will contribute a land and building with book value of P1,200,000 and fair market value of P1,500,000. The land and building is subject to a mortgage payable amounting to P300,000 to be assumed by the partnership.
The partners agreed that B will have 60% capital interest in the partnership. They agreed that C will contribute sufficient cash to the partnership. A day after the partnership formation, the equipment was sold for P 300,000.
Required - What is the cash to be contributed by C in the ABC Partnership?
a. P500,000
b. P600,000
c. P700,000
d. P800,000
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