Professional Documents
Culture Documents
II JJ
Cash…………………………………………………………. P300, 000 P700, 000
Machinery and Equipment………………………… 250, 000 750 ,000
Building……………………………………………………. __ 2,250,000
Furniture and Fixtures………………………………. 100, 000 __
The building is subject to mortgage loan of P800, 000 which is to be
consumed by the partnership agreement provides that II and JJ share profits
and losses 30% and 70% respectively. On March 1, 2012the balance in JJ’s
capital account should be:
a. P3,700,000 b. 3,140,000 c. P3,050,000 d. 2,900,000
3. The same information in number 2, except that the mortgage loan is not
assumed by the partnership. On March 1, 2012 the balance in JJ’s
capital account should be:
a. P3,700,000 b. 3,140,000 c. P3,050,000 d. 2,900,000
4. As of July 01, 2012, FF and GG decided to form a partnership. Their
balance sheets on this date are:
FF GG
Cash…………………………………………………………………………… P 15,000 P 37,000
Accounts Receivable…………………………………………………. 540,000 225,000
Merchandise Inventory…………………………………… __ 202,000
Machinery and Equipment………………………………………. 150,000 270,000
Total……………………………………………………………. P705,000 P735,000
AA BB
Assets………………………………………………………………………… P75,000 P113,000
Liabilities……………………………………………………………………. 5,000 34,500
What is the capital of AA and BB after the above adjustments?
a. AA,P68,750; BB, P77,250 c. AA, P65,000; BB, P76,000
b. AA, P75,000; BB, P81,000 d. AA, P65,000; BB, 81,000
6. CC admits DD as a partner in business. Accounts in the ledger for CC
on November 30, 2012, just before the admission of DD, show the
following balances:
Cash………………………………………………… P 6,800
Accounts Receivable…………………………. 14,200
Merchandise Inventory…………………… 20,000
Accounts Payable……………………………… 8,000
CC, Capital………………………………………… 33,000
It is agreed that the purposes of establishing CC’s interest, the following
adjustments shall be made:
(a) An allowance for doubtful accounts of 3percent of accounts receivable
is to be established.
(b) The merchandise inventory is to be valued at P23,000.
(c) Prepaid salary expenses of P600 and accrued rent expense of P800 are
to be recognized.
DD is to invest sufficient cash to obtain a 1/3 interest in the partnership.
Compute for: (1) CC’s adjusted capital before the admission of DD; and (2)
the amount of cash investment by D
a. (1) P35,347; (2) P11,971 c. (1) P35,374 (2) P 17,687
b. (1) P36,374; (2) P 18,487 d.(1) P28,174 (2) P 14,087
7. MM, NN and OO are partners with capital balances on December 2012 of
P300,000, P300,000 and P200,000 respectively. Profits are shared
equally. OO wishes to withdraw and it is agreed that OO is to take
certain equipment with second hand value of P50,000 and a note for a
balance of OO’s interest. The equipment are carried on the books at
P65,000. Brand new equipment may cost P80,000. Compute for: (i) OO’s
acquisition and second hand equipment will result to reduction in
capital: (2) the value of the note that will OO get from the
partnership’s liquidation.
a. (1) P15,000 each from MM and NN (2) P150,000
b. (1) P 5,000 each for MM, NN and OO (2) P 145,000
c. (1)P 5,000 each for MM, NN and OO (2) P195,00
d. (1)P 7,500 each for MM and NN (2) P 145,000
8. Jane sans Smith formed a partnership with each partner contributing
the following items:
Jones Smith
Cash………………………………………………………… P 80,000 P 40,000
LL MM
Cash………………………………………………………………… P 11,000 P 22,354
Accounts receivable…………………… 234,536 567,890
Inventories………………………………………………… 120,035 260,102
Land………………………………………………………………… 603,000
Building………………………………………………………....... - 428,267
Furniture and Fixtures……………… 50,345 4,789
Other Assets………………………………………… 2,000 3,600
TOTAL…………………………………. P1,020,916 P1,317,002
Accounts Payable……………………………………………P 178,940 P 243,650
Notes Payable………………………………………… 200,000 345,000
LL. Capital……………………………………………………….. 641,976 -
MM, Capital………………………… - 728,352
TOTAL………………………………… P1,020,916 P1,317,002
LL and MM agreed to form a partnership by contributing their respective
assets and equities subject to the following adjustments:
a. Accounts receivable of 20,000 in LL’s books and 35,000 in MM’s
respective books.
b. Inventories of 5,500 and 6,700 are worthless in LL’s and MM’s
respective books.
c. Other assets of 2,000 and 3,600 in LL’s and MM’s respective books are
to be written off.
The capital account of the partners after the adjustments will be:
a. LL, P615,942; MM, P17, 894
b. LL, P640,876; MM, P712,345
c. LL, P640,876; MM, P683,050
d. LL, P614,476; MM, P683,052
10. The same information in number 9, how much total assets does the
partnership have after formation:
a. P2,2337,918 c. P 2,265,118
b. P 2,237,918 d. P 2, 365,218
11. On March 01, 2012, PP and QQ decide to combine their businesses and form
a partnership. Their balance sheets on March 01, before adjustments, showed
the following
PP QQ
Cash……………………………….. P 9,000 P 3,750
Accounts Receivable……….. 18,500 13,500
Inventories………………………. 30,000 19,500
Furniture and Fixtures……… 30,000 9,000
Office Equipment……………… 11,500 2,750
Prepaid Expenses…………….. 6,375 3,000
TOTAL……. P 105,375 51,500
They agreed to have the following items recorded in their books:
1. Provide 2 percent allowance for doubtful accounts.
2. PP’s furniture and fixtures should be P 31,000 while QQ’s office
equipment is under depreciated by P 250
3. Rent expense incurred previously by PP was not yet recorded amounting
to P 1,000, while salary expense incurred by QQ was not also recorded
amounting to P 800.
4. The fair mark value of the inventory amounted to:
For PP…………………P 29,500
For QQ…………………P 21,000
Compute the net (debit) credit adjustment for PP and QQ:
PP QQ PP QQ
a. P2,870 P2,820 c. P(870) P180
b. (2,870) (2,820) d.870 (180)
12. The same information in number 11, compute the total liabilities after
formation:
a. P61, 950 c. P65,550
b 63, 750 d. 63,950
13. The same information in number 11, compute the assets after formation:
a. P157,985 c. P160,765
b. 156,875 d. 152,985
14. On April 30, 2012 , XX, YY and ZZ formed a partnership by combining
their separate business proprietors. XX contributed cash of P 75,000. YY
contributed property with P 54,000, carrying amount, a P 60,000 original
cost and !20, 000 fair value. The partnership accepted the responsibility
for the P 52,500 mortgage attached to the property. ZZ contributed equipment
with a P 45,000 carrying amount, a P 112, 500 original cost, and P 82,000
fair value. The partnership agreement specifies that profits and losses are
to be shared equally but is silent regarding capital contributions. Which
partner has the largest April 30,2012, capital balance?
a. XX c. YY
b. ZZ d. all capital account balances are equal
15. JJ and KK are partners share profits and losses in the ratio of 60
percent and 40 percent respectively. JJ’s salary is P60,000 and P30,000 for
KK. The partners are also paid interest on their average capital balances.
In 2012 JJ received P30,000of interest and KK, P12,000. The profit and loss
allocation is determined after the deductions for the salary and interest
payments. If KK’s share in the residual income (income after deducting
salaries and interest) was P60,000 in 2012, what was the total partnership
income?
a. P192,000 c. P282,000
b. 345,000 d. 387,000
16.The partnership agreement of RR and SS provides that’s interest at 10%
per year is to be credited to each partner on the basis of weighted-average
capital balances. A summary of a capital account of SS for the year ended
December 31, 2012, is as follow:
Balance, January 1 ……………………………………………………………. P 420, 000
Additional investments, July 1……….…………………………………… 120, 000
Withdrawal, August 1………………………………………………………... (45, 000)
Balance, December 31………………………………………………………… 495, 000
What amount of interest should be credited to SS’s capital account for 2012?
a.P45,750 c. P46,125
b. 49,500 d. 51,750
17. AA, BB and CC are partners who average capital balances during 2012 of
P360, 000, P180, 000, and P120, 000, respectively. Partners receive 10%
interest on their average capital balances. After deducting salaries of P90,
000 to AA and P60, 000 to CC the residual profit or loss are divided
equally. In 2012 the partnership sustained a P99, 000 loss before interest
and salaries to partners. In what amount should AA’s capital account change.
a. P21,000 increase c. P105,000 decrease
b. 33,000 decrease d. 126,000 increase
September……………………- - P3,000 -
October………………………- 5, 000 1, 000 -
December……………………- 4, 000 - 5, 000
Assuming that an interest of 20% per annum is given an average capital and
the balance of profits is allocated equally, the allocation of profit should
be:
a. DD, P60,000; EE. 59,400 c. DD, P67,000; EE. 52,800
b. DD, P61,000; EE,59, 400 d.DD, P68,000; EE, 51,200
21. AA and BB formed a partnership in 2012 and made the following investment
and capital withdrawals during the year:
AA BB
INVESTMENTS DRAWS INVESTMENTS DRAWS
March 1…… 30,000 P20,000
June 1 P10,000 P10,000
August 1………………… 20,000
December 1 5,000 2,000
The partnership profits and losses agreement provides for a salary of
which P30,000 was paid to each partner for 2012 . AA is to receive a bonus
of 10% on net income after salaries and bonus . The partners are also to
receive interest of 8% on average annual capital balances affected y both
WW RR
January 1 capital balances………………………P100,000 P120,000
Yearly drawings (1,500 a month)……………18,000 18,000
Permanent withdrawals of capital………….
June3…………………………………… (12,000)
May2…………………………………… (15,000)
Additional investments of capital:
July………………………………………. 40,000
October………………………………… 50,000
What is the weighted average capital for WW and RR respectively for 2011?
a.P110,667 and P119,583 c. P100,000 and 200,000
b.P105,333 and 126,667 d. P126,667 and 105,333
of P1, 200, 000 during the calendar year 2011. During 2011, Merlin withdrew
P2, 600, 000 (charged against his capital account) and contributed property
valued at p500, 000 to the partnership. What was the net income of the
Camelot partnership for year 2011.
a. 3,000,000 c. P, 7,000,000
b.4,667,667 d. 11,000,000
28. AA, BB and CC are partners with average capital balance during 2011 of
P472, 500, P238, 650, and P162, 350, respectively. The partners receive 10%
interest on their average capital balances; after deducting salaries of
P122, 325 to AA and P82, 625 to CC, the residual profits and loss is divided
equally. In 2011, the partnership had a net loss of P125, 624 before the
interest and salaries to partners. By what amount should AA’s and CC’s
capital account charge- increase (decrease)?
AA CC AA CC
a. P30,267 P(40,448) c. P(40,448) P31,235
b. 29,476 17,536 d. 20,358 32,458
29.The same information in no. 32, except the partnership ha a loss of P125,
624 after the interest and salaries to partners, by what amount should BB’s
capital account charge-increase (decrease)?
a. P(115,443) c. P ( 41,875)
b. 23,865 d. (18,010)