NAME SCORE: SECTION PROFESSOR: Multiple Choice i. -On May 1, 2012, Gonzaga’ and Balace formed a partnership and agreed to share profits and losses in the ratio of 3:7, respectively. Gonzaga contributed a parcel of land that cost P10,000. Balace contributed P40,000 cash. The land was sold for P18,000 on May 1, 2012, immediately after formation of the partnership. What amount should be recorded in Gonzaga’s capital account on formation of the partnership? a. 15,000 b. 17,400 cc. P10,000 d: P18,000 2. On Mar. 1, 2012, Sarabia and Abad decided to combine their businesses and forma partnership. Their statements of financial position on Mar. 1, before adjustments, showed the following: ___Sarabia Cash P 9,000 ‘Accounts receivable 18,500 Inventories 30,000 Furniture and Fixtures (net) 30,000 Office Equipment (net) 11,500 Prepaid Expenses 6,375 Total —_P105,375 P51,500 Accounts Payable P 45,750 P 18,000 Capital 59,625 33,500_ Total They agreed to have the following items recorded in their books: 1. Provide 2% allowance for doubtful accounts. 2. Sarabia’s furniture and fixtures should be P31,000, while Abad’s office equipment is under-depreciated by P250. 3. Rent expense incurred previously by Sarabia was not yet recorded amounting to P1,000, while salary expense incurred by Abad was not also recorded amounting to P80. 4, _ Thefair market values of inventory amounted to: For Sarabia 29,500 For Abad 21,000 1-42 | Partnership and Corporation Accounting.