On December 1, 2019 Gelli, the sole proprietor of the Vaseline Company, expands the company and establish a partnership with Althea and Bettina. The partners plan to share profits and losses as follows: Geli, 40%: Althea, 35% and Bettina, 25%. Gelli asked Althea to join the partnership because his image and reputation are expected to be valuable during the formation. Althea is also contributing P105,000 cash and a building that was acquired for P1,010,000, with carrying amount of P870,000, and a fair market value of P490,000 The building is subject to a P198,000 mortgage that the partnership did not assume. Betting is contributing P212,000 cash and marketable securities costing P336,000 to Bettina but are currently worth P475,000. Geli's investment in the partnership is the Vaseline Company. The Statement of Financial Position for the Vaseline Company follows: Vaseline Company Statement of Financial Position December 31, 2019 Assets Liabilities and Capital Cash P390,000 Accounts payable P437,000 Accounts receivable 456,000 Notes payable 592,000 Inventories 394,000 Gelli, capital 829,000 Equipment, net 618,000 Total assets P1858.000 Total liabilities and P1.858.000 capital The partners agree that 35% of the inventory is considered worthless, the equipment is worth 75% of its carrying amount, and 15% of the accounts receivable is uncollectible. Gelli plans to pay off the accounts payable with his personal assets. The other partners have agreed that partnership will assume the notes payable. The partners agreed that their capital balances upon formation will be in conformity with their profit and loss ratio. All the statements are true, except: A. Assuming the partners will either investor withdraw cash, using Bettina as the base. Geli and Althea will both invest cash with a total amount of P560,800. B. If the transfer of capital method is used, the capital accounts of Geli and Bettina will be debited in the amount of P30,320 and P140.200, respectively C. Assuming the partners will either investor withdraw cash, using Gelli as the base. Althea and Bettina will both invest cash with a total amount of P75,800. D. Assuming the partners will either investor withdraw cash, using Althea as the base, Gelli and Bettina will both withdraw cash with a total amount of P487.200. On December 1, 2019 Gelli, the sole proprietor of the Vaseline Company, expands the company and establish a partnership with Althea and Bettina. The partners plan to share profits and losses as follows: Geli, 40%: Althea, 35% and Bettina, 25%. Gelli asked Althea to join the partnership because his image and reputation are expected to be valuable during the formation. Althea is also contributing P105,000 cash and a building that was acquired for P1,010,000, with carrying amount of P870,000, and a fair market value of P490,000 The building is subject to a P198,000 mortgage that the partnership did not assume. Betting is contributing P212,000 cash and marketable securities costing P336,000 to Bettina but are currently worth P475,000. Geli's investment in the partnership is the Vaseline Company. The Statement of Financial Position for the Vaseline Company follows: Vaseline Company Statement of Financial Position December 31, 2019 Assets Liabilities and Capital Cash P390,000 Accounts payable P437,000 Accounts receivable 456,000 Notes payable 592,000 Inventories 394,000 Gelli, capital 829,000 Equipment, net 618,000 Total assets P1858.000 Total liabilities and P1.858.000 capital The partners agree that 35% of the inventory is considered worthless, the equipment is worth 75% of its carrying amount, and 15% of the accounts receivable is uncollectible. Gelli plans to pay off the accounts payable with his personal assets. The other partners have agreed that partnership will assume the notes payable. The partners agreed that their capital balances upon formation will be in conformity with their profit and loss ratio. All the statements are true, except: A. Assuming the partners will either investor withdraw cash, using Bettina as the base. Geli and Althea will both invest cash with a total amount of P560,800. B. If the transfer of capital method is used, the capital accounts of Geli and Bettina will be debited in the amount of P30,320 and P140.200, respectively C. Assuming the partners will either investor withdraw cash, using Gelli as the base. Althea and Bettina will both invest cash with a total amount of P75,800. D. Assuming the partners will either investor withdraw cash, using Althea as the base, Gelli and Bettina will both withdraw cash with a total amount of P487.200
