On December 31, 2018, ABC Partnership's Statement of Financial Positions shows that A, B and

C have capital balances of P500,000, P300,000 and P200,000 with profit or loss ratio of 1:3:6.

On January 1, 2019, C retired from the partnership and received P350,000. At the time of C's

retirement, an asset of the partnership is undervalued.

38. What is the capital balance of A after the retirement of C?

a. P462,500

b. P537,500

c. P562,500

d. P525,000