Question

1/30

The following were the capital balances of Partners' A and B before admitting incoming
partner C: P250,000 and P300,000 respectively. There was also an undistributed net
loss in the amount of P50,000 and a certain Building which was overstated by P10,000.
Profit and loss agreement was 60:40 respectively.

Assume the following INDEPENDENT cases:

Incoming partner Cinvested P600,000 for 60% capital interest to the partnership What is
the capital balance of Partner A after admitting incoming Partner C?

Select your answer.

181,600

214,000

187,600

220,000

Question

4/30

On September 30, 2021, The J, K and L Partnership had the following fiscal year.
Statement of Financial Position.

Cash P240,000

Accounts Receivable 360,000

Merchandise 840,000

Equipment, net 720,000

Loan to J 360,000

P2,520,000

Accounts Payable P420,000

Loan from L 3 00,000

J, Capital (20%) 840,000

K, Capital (20%) 600,000

L, Capital (60%) 360,000

P2,520,000

Compute the amount of cash K would receive in the first distribution

Select your answer.

72,000

24,000

120,000

Question

3/30

During 2022, partners IC and RT had the following movements in their capital balances:

2022

Jan 1, bal. Apr 1 Jul 1 Oct 1 Dec 1 Dec 31

IC, Capital Debit Credit

P110,000 40,000

70,000 40,000

60,000 10,000

RT, Capital Debit Credit

100,000 50,000

50,000 20,000 18,000 10,000

The partners withdrew their allowed P10,000 at the end of the year in anticipation of
their share in the net income of the partnership. The following are the partnership's profit
and loss sharing agreement: • 10% interest based on average capital balances •
Quarterly salaries of P5,000 and P10,000 for IC and RT, respectively • Bonus to IC
amounting to 20% of net income after interests and salaries. • Remainder is to be
shared equally between the partners.

Assuming the partnership operations resulted to a net loss of P120,000, how much is
the share of RT in the net loss of the partnership?

Question

16/30

On December 31, 2021, the Statement of Financial Position of DEF Partnership with
profit or loss ratio of 1:4:5 of partners D, E and F respectively revealed the following
data:

Cash Non Cash assets

2,500,000 6,250,000

Liabilities D, Capital E, Capital F, Capital

5,000,000 1,750,000 1,250,000

750,000

On January 1, 2022, the partners decided to liquidate the partnership. All partners are
legally declared to be personally insolvent. The noncash assets were sold for
P4,500,000. Liquidation expenses amounting to P750,000 were incurred and paid.

Compute the amount of cash received by Partner D after liquidation

Select your answer.

1,500,000

1,250,000

1,400,000

1,750,000

Question

5/30
During 2022, partners IC and RT had the following movements in their capital balances:

2022

Jan 1, bal. Apr 1 Jul 1 Oct 1 Dec 1 Dec 31

IC, Capital Debit Credit

P110,000 40,000

70,000 40,000

60,000 10,000

RT, Capital Debit Credit

100,000 50,000

50,000 20,000 18,000 10,000

The partners withdrew their allowed P10,000 at the end of the year in anticipation of
their share in the net income of the partnership. The following are the partnership's profit
and loss sharing agreement: • 10% interest based on average capital balances •
Quarterly salaries of P5,000 and P10,000 for IC and RT, respectively • Bonus to IC
amounting to 20% of net income after interests and salaries. • Remainder is to be
shared equally between the partners.

Assuming the partnership operations resulted to a net income of P200,000, how much
is the share of IC in the net income of the partnership?

Question

2/30

Kylie and AJ decided to combine their businesses and form a partnership. Below are
their statements of financial position before the formation:

Kylie

AJ

Cash Accounts receivable Inventories Property and equipment - net Other assets Total
assets

P2,048,400 1,031,960 528,160 613,380

8,800 P4,230,700

P1,098,360 2,498,716 1,144,448 852,224

15,840 P5,609,588

P1,072,060

P787,336 1,000,000

1,440,000

Accounts payable Notes payable Mortgage payable Kylie, capital AJ, capital Total
liabilities and equity

2,443,364

P4,230,700

3,097,528 P5,609,588

The partners agreed that the property and equipment of Kylie is over-depreciated by
P80,000 and that of AJ is under-depreciated by P200,000. Accounts receivable of
P140,000 in Kylie's book and P108,000 in AJ's book are uncollectible. The partnership
decided to assume the mortgage liability of AJ but not the note payable of Kylie. The
partnership agreement provides for a profit and loss ratio of 60% to Kylie and 40% to
AJ.

How much is the initial capital balance of Kylie upon formation, based on actual
contributions?

Question

6/30

Glo, McKinley, and CP formed a partnership on January 1, 2022 by contributing cash of

P750,000, P650,000, and P600,000, respectively.

The profit or loss agreement of the partners is as follows: • P200,000, P150,000,

P50,000 annual salary for Glo, McKinley, and CP, respectively • 10% interest on
beginning capital balance of the partners • Bonus to Glo based on 20% net income after
interests and salaries. • Remainder is to be divided in the ratio 25:35:40 for Glo,
McKinley, and CP, respectively. During 2022, Glo, McKinley, and CP made additional
investments of P300,000, P400,000 and P200,000, respectively. At the end of 2022,
Glo, McKinley, and CP made drawings of P150,000, P50,000, and P100,000
respectively. At the end of 2022, the capital balance of CP is reported at P950,000.
How much is the capital balance of Glo at the end of the year?

Select your answer.

1,350,000

1,490,500

1,452,500

1,500,000

Question

18/30

WYT and BWM are partners who agreed on the following profit-sharing arrangement:

WYT

BWM Annual salaries

P261,000

P259,000 Interest on average balances

10%

5% Bonus (based on NI after salaries and interest) 10% Remainder

25%

75%

During the year ended December 31, 2022, the partnership generated a profit of
P570,000 before any deductions. WYT's and BWM's average capital balances for the
year are P600,000 and P400,000 respectively. Income is distributed only as far as it is
available to the extent of earnings only.

How much is the share of BWM in the net income of the partnership?

Select your answer.

249,500

261,500
265,500

256,500

Question

19/30

Storms, Jesh, Harry Gwapo, and Cima James, are partners, sharing earnings and ratio
of 3/21, 4/21, 6/21 and 8/21, respectively. The balances of their capital accounts on
December 31, 2021 are as follows:

Storms Jesh Harry Gwapo Cima James

P1,000 25,000 25,000

9,000

The partners decide to liquidate, and they accordingly convert the non-cash assets into
P23,200 of cash. After paying the liabilities amounting to P3,000, they have P22,200 to
divide. Assume that a debit balance of any partner's capital is uncollectible because
they are very poor.

The share of Storms in the loss upon conversion of the non-cash assets into cash was:

Select your answer.

P5,200

P5,400

P5,257

P4,972 Question

8/30

The following were the capital balances of Partners' A and B before admitting incoming
partner C: P250,000 and P300,000 respectively. There was also an undistributed net
loss in the amount of P50,000 and a certain Building which was overstated by P10,000.
Profit and loss agreement was 60:40 respectively.

Assume the following INDEPENDENT cases:

There was implied under/over valuation of another certain asset and incoming partner C
invested P600,000 for 60% capital interest to the partnership What is the capital
balance of Partner A after admitting incoming Partner C?

Select your answer.

264,000

244,000

240,000

276,000

Question

7/30

On June 30, 2021, The E, M and V Partnership had the following fiscal year. Statement
of Financial Position.

Cash Other asset

P40,000 125,000

Accounts Payable P140,000 E, Capital (20%) 45,000 M, Capital (20%) 42,000 V,

Capital (60%) 18,000

P165,000

P165,000

Assume the other assets with a book value of P90,000 are sold for P50,000 and that all
available cash, except for a P10,000 contingency fund, is distributed immediately. In this
case:

Select your answer.

M should receive P16,050

V should receive P1,000

E, M and V will receive, P2,050, P16,050 and P1,000x , respectively

Question
12/30

The following were the capital balances of Partners' A, B and C before the retirement of
Partner B: P230,000; P120,000; P340,000 respectively. The following also were the
loan balances: Loan to A, P45,000 and Loan from B, P50,000. They share profits and
losses 20:20:60 respectively.

Assume the following INDEPENDENT cases:

There was implied under over valuation of another certain asset and Partner B was
given P150,000 in exchange for his interest. What is the capital balance of Partner C
after retirement of Partner B?

Select your answer.

325,000

400,000

355,000

280,000

Question

20/30

The following were the capital balances of Partners' A, B and C before the retirement of
Partner B: P230,000; P120,000; P340,000 respectively. The following also were the
loan balances: Loan to A, P45,000 and Loan from B, P50,000. They share profits and
losses 20:20:60 respectively.

Assume the following INDEPENDENT cases:

Partner B was given P200,000 in exchange for his interest. What is the capital balance
of Partner A after retirement of Partner B?

Select your answer.

177,500

224,000

230,000

222,500
Question

13/30

On November 1, 2021, The E, M and V Partnership decided to liquidate EMV

Partnership. Their capital balances and profit and loss on this date are as follows:

E, Capital M, Capital V, Capital

P50,000 60,000 20,000

(40%) (30%) (30%)

The net income from January 1 to November 1, 2021 is P44,000. On November 1,

2021, cash and liabilities are P40,000 and P90,000, respectively.

For E to receive P55,200 in full settlement of his interest in the firm, how much must be
realized from the sale of the firm's non-cash assets?

Select your answer.

P233,000

P193,000

P149,000

P255,000

Question

11/30

Kylie and AJ decided to combine their businesses and form a partnership. Below are
their statements of financial position before the formation:

Kylie

AJ

Cash Accounts receivable Inventories Property and equipment - net Other assets Total
assets

P2,048,400 1,031,960 528,160 613,380

8,800 P4,230,700
P1,098,360 2,498,716 1,144,448 852,224

15,840 P5,609,588

P1,072,060

P787,336 1,000,000

1,440,000

Accounts payable Notes payable Mortgage payable Kylie, capital AJ, capital Total
liabilities and equity

2,443,364

P4,230,700

3,097,528 P5,609,588

The partners agreed that the property and equipment of Kylie is over-depreciated by
P80,000 and that of AJ is under-depreciated by P200,000. Accounts receivable of
P140,000 in Kylie's book and P108,000 in AJ's book are uncollectible. The partnership
decided to assume the mortgage liability of AJ but not the note payable of Kylie. The
partnership agreement provides for a profit and loss ratio of 60% to Kylie and 40% to
AJ.

Assume that Kylie and AJ decided to make their capital ratio conform to their profit/loss
ratio, and that AJ is willing to invest/withdraw sufficient cash in the process, which of the
following statements is incorrect? Question

23/30

During 2022, partners IC and RT had the following movements in their capital balances:

2022

Jan 1, bal. Apr 1 Jul 1 Oct 1 Dec 1 Dec 31

IC, Capital Debit Credit

P110,000 40,000

70,000 40,000

60,000 10,000
RT, Capital Debit Credit

100,000 50,000

50,000 20,000 18,000 10,000

The partners withdrew their allowed P10,000 at the end of the year in anticipation of
their share in the net income of the partnership. The following are the partnership's profit
and loss sharing agreement: • 10% interest based on average capital balances •
Quarterly salaries of P5,000 and P10,000 for IC and RT, respectively • Bonus to IC
amounting to 20% of net income after interests and salaries. • Remainder is to be
shared equally between the partners.

Assuming the partnership operations resulted to a net income of P50,000, how much is
the capital balance of RT at the end of the year?

Question

21/30

Kylie and AJ decided to combine their businesses and form a partnership. Below are
their statements of financial position before the formation:

Kylie

AJ

Cash Accounts receivable Inventories Property and equipment-net Other assets Total
assets

P2,048,400 1,031,960 528,160 613,380

8,800 P4,230,700

P1,098,360 2,498,716 1,144,448 852,224

15,840 P5,609,588

P787,336 1,000,000

P1,072,060

1,440,000

Accounts payable Notes payable Mortgage payable Kylie, capital AJ, capital Total
liabilities and equity
2,443,364

P4,230,700

3,097,528 P5,609,588

The partners agreed that the property and equipment of Kylie is over-depreciated by
P80,000 and that of AJ is under-depreciated by P200,000. Accounts receivable of
P140,000 in Kylie's book and P108,000 in AJ's book are uncollectible. The partnership
decided to assume the mortgage liability of AJ but not the note payable of Kylie. The
partnership agreement provides for a profit and loss ratio of 60% to Kylie and 40% to
AJ.

How much is the total assets of the partnership upon formation?

Question

14/30

Kylie and AJ decided to combine their businesses and form a partnership. Below are
their statements of financial position before the formation:

Kylie

AJ

Cash Accounts receivable Inventories Property and equipment - net Other assets Total
assets

P2,048,400 1,031,960 528,160 613,380

8,800 P4,230,700

P1,098,360 2,498,716 1,144,448 852,224

15,840 P5,609,588

P1,072,060

P787,336 1,000,000

1,440,000

Accounts payable Notes payable Mortgage payable Kylie, capital AJ, capital Total
liabilities and equity
2,443,364

P4,230,700

3,097,528 P5,609,588

The partners agreed that the property and equipment of Kylie is over-depreciated by
P80,000 and that of AJ is under-depreciated by P200,000. Accounts receivable of
P140,000 in Kylie's book and P108,000 in AJ's book are uncollectible. The partnership
decided to assume the mortgage liability of AJ but not the note payable of Kylie. The
partnership agreement provides for a profit and loss ratio of 60% to Kylie and 40% to
AJ.

Assume that Kylie and AJ decided to make their capital ratio conform to their profit/loss
ratio. Under the bonus method, which of the following statement is correct?

Question

28/30

The following were the capital balances of Partners' A, B and C before the retirement of
Partner B: P230,000; P120,000; P340,000 respectively. The following also were the
loan balances: Loan to A, P45,000 and Loan from B, P50,000. They share profits and
losses 20:20:60 respectively.

Assume the following INDEPENDENT cases:

Partners' A and B have the following capital balances before admitting incoming Partner
C: P350,000 and P400,000 respectively. They share profits and losses 70:30
respectively. C was admitted in the partnership by purchasing 1/5 capital interest from
Partner B by paying him P100,000 and investing P170,000 for a total of 20% capital
interest in the partnership What is the capital balance of Partner B after admission of
incoming Partner C?

Question

26/30

Glo, McKinley, and CP formed a partnership on January 1, 2022 by contributing cash of

P750,000, P650,000, and P600,000, respectively.

The profit or loss agreement of the partners is as follows: • P200,000, P150,000,

P50,000 annual salary for Glo, McKinley, and CP, respectively . 10% interest on
beginning capital balance of the partners • Bonus to Glo based on 20% net income after
interests and salaries. • Remainder is to be divided in the ratio 25:35:40 for Glo,
McKinley, and CP, respectively. During 2022, Glo, McKinley, and CP made additional
investments of P300,000, P400,000 and P200,000, respectively. At the end of 2022,
Glo, McKinley, and CP made drawings of P150,000, P50,000, and P100,000
respectively. At the end of 2022, the capital balance of CP is reported at P950,000.

How much is the net income of the partnership during 2022?

Select your answer.

950,000

1,140,000

1,187,500

1,037,500