Use the Following Information to Answer Questions Bellow

Use the following information to answer Questions bellow
Patel and Rao decide to form a partnership. Patel contributes $300,000 in cash. Rao contributes buildings and equipment with a fair market value of $500,000, subject to a mortgage of $150,000, which the partnership assumes.
-Assume the partners specify an agreed-upon percentage in the initial partner capital, as follows: 60% to Patel, and 40% to Rao. If the goodwill approach to partnership formation is used, Rao's initial capital balance is:

A) $425,000
B) $375,000
C) $525,000
D) $350,000