9303 - Partnership Dissolution

CPA REVIEW SCHOOL OF THE PHILIPPINES
Manila
ADVANCED FINANCIAL ACCOUNTING GERMAN/LIM/VALIX/MARASIGAN

PARTNERSHIP DISSOLUTION
Part I: Theory of Accounts
1. The following are related to Partnership Dissolution except

a. admission by purchase of interest
b. admission by investment
c. retirement of a partner
d. the winding up of the partnership business by selling the noncash assets, paying the creditors
and distributing the remaining cash to the partners
2. When an incoming partner purchases an interest of the partnership, which of the following is/are
TRUE?
a. the partnership assets remain unchanged
b. no cash or other assets flow from the new partner to the partnership
c. the cash paid by the incoming partner is not recorded in the partnership books because it is a
personal transaction between the selling partners and buying partner
d. all of the above
3. Under admission by investment and the bonus method is used, what is the result when the amount
invested by the incoming partner is less than the capital credited to him?
a. bonus to the new partner
b. bonus to existing partners
c. the new partner will invest additional capital
d. the existing partners' capital will increase
4. Under admission by investment and the total contributed capital is greater than the total agreed
capital, which of the following is/are TRUE?
a. the capital balances of the existing partners will increase
b. the capital balances of the existing partners will decrease
c. a certain asset is undervalued
d. both B and C
5. When a retiring partner was paid more than his interest and resulted to an increase in the capital
balances of the remaining partners, which of the following is/are TRUE?
a. bonus to retiring partner
b. bonus to remaining partners
c. a certain asset was undervalued and was adjusted to all partners before retirement
d. both B and C
9303
Page 2
Part II: Problem Solving
1. The following were the capital balances of Partners' A, B, and C before admitting incoming partner
D: P100,000; P150,000; P300,000 respectively. There was also an undistributed net income in the
amount of P75,000. Profit and loss agreement was 30:20:50 respectively.
Assume the following INDEPENDENT cases:
1. Incoming partner D purchased 40% capital interest from the partnership by paying
P200,000. What is the capital balance of Partner C after admitting incoming Partner D?
a. 202,500
b. 180,000
c. 337,500
d. 300,000
2. A certain asset was undervalued by P85,000 and incoming Partner D purchased 40%
capital interest from the partnership. What is the capital balance of Partner A after
admitting incoming Partner D?
a. 148,000
b. 122,500
c. 88,800
d. 100,000
2. 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.
1. 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?
a. 214,000
b. 181,600
c. 220,000
d. 187,600
2. 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 B after admitting incoming Partner C?
a. 276,000
b. 244,000
c. 264,000
d. 240,000
9303
Page 3
3. 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.
1. Partner B was given P200,000 in exchange for his interest. What is the capital balance of
Partner A after retirement of Partner B?
a. 230,000
b. 222,500
c. 177,500
d. 224,000
2. 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?
a. 280,000
b. 400,000
c. 325,000
d. 355,000
4. 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?

a. 320,000
b. 300,200
c. 419,800
d. 339,800
END
9303

9303 - Partnership Dissolution

Uploaded by

Copyright:

Available Formats

9303 - Partnership Dissolution

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

9303 - Partnership Dissolution

Uploaded by

Copyright:

Available Formats

CPA REVIEW SCHOOL OF THE PHILIPPINES

ADVANCED FINANCIAL ACCOUNTING GERMAN/LIM/VALIX/MARASIGAN

Part I: Theory of Accounts

1. The following are related to Partnership Dissolution except

Part II: Problem Solving

Assume the following INDEPENDENT cases:

Assume the following INDEPENDENT cases:

What is the capital balance of Partner B after admission of incoming Partner C?

You might also like