On June 1, 2013, AZ invited MG to join him in his business. MG agreed provided

that AZ will adjust the accumulated depreciation of his equipment account to a

certain amount, and will recognize additional accrued expenses of P40,000. After

that, MG is to invest additional pieces of equipment make her interest equal to 45%.

If the capital balances of AZ before and after adjustment were 556,00 and 484,000

respectively, what is the effect in the carrying value of the equipment as a result of

the admission of MG?

A. 364,000

B. (32,000)

C. 396,000

D. (324,000)