n June 30, 2020, Amal, the sole proprietor of the Amal Company, expands the company and establish a partnership with Umong and Abongga. The partners plan to share profits and losses as follows: Amal, 50%; Umong, 25%; and Abongga, 25%. They also agree that the beginning capital balances of the partnership will reflect this same relationship. Amal asked Umong to join the partnership because his many business contacts are expected to be valuable during expansion. Umong is also contributing P28,000 cash. Abongga is contributing P11,000 cash and marketable securities costing P42,000 to Abongga but are currently worth P57,500. Amal’s investment in the partnership is the Amal Company. He plans to pay off the notes with personal assets. The other partners have agreed that partnership will assume the accounts payable. The Statement of Financial Position for the Jamal Company follows:
On June 30, 2020, Amal, the sole proprietor of the Amal Company, expands the company and establish a
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