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How much is the capital account of aa upon formation

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Question - On February 14, AA and BB formed a partnership and contributed the following assets at historical costs:

AA

BB

Cash

P600,000

P200,000

Inventories

?

?

Furniture and fixtures

40,000

Delivery equipment

80,000

Land

300,000

The land was subject to a mortgage which has an unpaid balance of P50,000. The mortgage will be assumed by the partnership. AA and BB agreed to share profits and losses in the ratio of 1:2, respectively. The partners agreed to contribute inventories (BB is to contribute inventories worth 2.5 times the peso value of the inventories to be contributed by AA) in order to have their capital credits in the same ratio as their profits and losses ratio.

Required - How much is the capital account of AA upon formation of the partnership?

Reference no: EM133133441

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