BS4

1.
A 1:3:2 ratio is the same as

⅙:½:⅓
2. Brian Snow and Wendy Waite formed a partnership on July 1, 20x2. Brian invested P20,000 cash,
inventory valued at P15,000, and equipment valued at P67,000. Wendy invested P50,000 cash and
land valued P120,000. The partnership assumed the P40,000 mortgage on the land.
On June 30, 20x3, the partnership reported a net loss of P24,000. The partnership contract specified
that income and losses were to be allocated by allowing 10% interest on the original capital investment,
salaries of P15,000 to Brian and P20,000 to Wendy, and the remainder to be divided in the ratio of
40:60.
On July 1, 20x3, Alan Young was admitted into the partnership with a P70,000 cash investment. Alan
was given 30% interest in the partnership because of his special skills. The partners elect to use the
bonus method to record the admission. Any bonus should be divided in the old ratio of 40:60.*
On June 30, 20x4, the partnership reported a net income of P150,000. The new partnership contract
stipulated that income and losses were to be divided a fixed ratio of 20:50:30
On July 2, 20x4, Brian withdrew from the partnership for personal reasons. Brian was given P40,000
cash and a P60,000 note for his capital interest.
● The share of Snow in the net loss for the first year is ________.
(16,320) 7680
● The share of Snow in the net income for the second year is ________.
30000
● The decrease in the capital of Waite upon the admission of Alan is ________.
8040
● Upon formation the amount credited to the capital account of Waite is ________.
130 000
● The entry to record the withdrawal of Snow includes a credit to Waite, Capital in the amount of
11850
1. Mickey, Donald, and Minnie are partners sharing profit and loss in the ratio of 2:1:1, respectively. Their
capital balances are P400,000 for Mickey, P200,000 for Donald and P100,000 for Minnie. Claims of
suppliers amounted to 500,000 including the loan extended by Minnie, P50,000. The cash balance
amounted to P300,000 and it increased to P1,050,000 as a result of the sale of the non-cash assets.
● How much cash was received by Donald in the final settlement?

162,500
● How much cash was received by Mickey in the final settlement?

325,000
● How much was the non-cash assets of the partnership?

900,000
● How much was the loss from sale of non-cash assets?

150,000
● How much was the cash proceeds from sale of non-cash assets?
750,000
● How much cash will Minnie receive?

112,500
1. Ara, Bea, and Cai agreed to admit a new partner on January 1, 2021 when their capital balances were
250,000, 150,000, and 200,000, respectively. Profit and loss ratio is 2:1:2, respectively. A new partner,
Dell was admitted for cash investment that will give her 25% interest in the partnership.
How much should Dell invest?

200,000
250,000, 150,000, and 200,000, respectively. Profit and loss ratio is 2:1:2, respectively.
Ara retired and the partnership paid her P240,000 after the assets were revalued.
● Bea’s capital after Ara’s retirement is

P145,000
Ara retired and the partnership paid her P280,000 after the assets were revalued.
● Total capital after Ara’s retirement is

P395,000
250,000, 150,000, and 200,000, respectively. Profit and loss ratio is 2:1:2, respectively. A new partner,
Dell was admitted for cash investment of 100,000 for a 20% interest in an agreed capitalization of
700,000. The accountant recognized
Bonus to new partner
1. Rica is a sole proprietor who invested her grocery when she invited Belle to form a new partnership
business. The following are the assets and liabilities of the grocery:
Cash 50,000
Merchandise 30,000 Book Value
P20,000 Market Value
Fixed Asset (100k less Acc. Depn 10K) 90,000 Book Value
70% of cost Market Value
Accounts Payable 20,000
Accrued Expenses 7,000
Belle invested the following:
Cash P60,000
Land (mortgage balance of 200,000 Book Value

P500k plus accrued interest
for 6 mos at 18%)
500,000 Market Value
Store furniture (costing 30,000

P40k less acc depn of 10k)
The total liabilities of the newly formed partnership would be

81,500
2. A statement of financial position of the partnership of X, Y, Z contains the following account balances:
Cash P240,000 Accounts Payable P300,000
Accounts Receivable 280,000 Notes Payable 200,000
Loans to Z 40,000 Loans from Y 20,000
Inventories 400,000 X, Capital 340,000
Property, Plant, and 440,000 Y, Capital 340,000

Equipment
Z, Capital 200,000
In January 2021, the loan to Z, was offset against his capital balance, P200,000 of accounts receivable
were collected and inventories with carrying value of P160,000 were sold for P200,000. Available cash
was distributed. **
X, Y, and Z share profits and losses in the ratio of 5:3:2, respectively.
● After the first distribution of cash, the equity of Y is ________.

220000
● If Z received P30,000 during the first cash distribution, the amount that should have been
received by X is ________.
15000
● If P40,000 cash was withheld for possible liquidation expenses, the amount of cash received by
Y in the first cash distribution is ________.
100000
● If X received a total of P240,000 in full settlement of his interest in the partnership, the total loss
incurred on the liquidation of the partnership is ________.
200000
● The amount of cash available for distribution to partners is ________.

140000

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1.

A 1:3:2 ratio is the same as

● How much cash was received by Donald in the final settlement?

● How much cash was received by Mickey in the final settlement?

● How much was the non-cash assets of the partnership?

● How much was the loss from sale of non-cash assets?

● How much cash will Minnie receive?

How much should Dell invest?

● Bea’s capital after Ara’s retirement is

● Total capital after Ara’s retirement is

Merchandise 30,000 Book Value

P20,000 Market Value

70% of cost Market Value

Accounts Payable 20,000

Accrued Expenses 7,000

Belle invested the following:

Land (mortgage balance of 200,000 Book Value

500,000 Market Value

Store furniture (costing 30,000

The total liabilities of the newly formed partnership would be

Cash P240,000 Accounts Payable P300,000

Accounts Receivable 280,000 Notes Payable 200,000

Loans to Z 40,000 Loans from Y 20,000

Inventories 400,000 X, Capital 340,000

Property, Plant, and 440,000 Y, Capital 340,000

X, Y, and Z share profits and losses in the ratio of 5:3:2, respectively.

● After the first distribution of cash, the equity of Y is ________.

● The amount of cash available for distribution to partners is ________.

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