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.

1.

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