|| | (CPA REVIEW SCHOOL OF THE PHILIPPINES Manila | Advanced Financia Accounting herrea ora a PARTNERSHIP DISSOLUTION : an Theory of Accounts i | 1, Which ofthe following statements pertains to partnership dissolution? '& trefes tothe process of converting the non-cash assets ofthe partnership and distributing the {otal cash tothe creditors and the remainder to the pares. ', It refers tothe change in the relation of the pariners paused by any partner ceasing to be sssociatedin the carrying on of the partnership. . Itrefers to the extinguishment ofthe juridical personality ofthe partnership. 4. Itrefers to the end ofthe life ofthe partnership. -_ 2. Which ofthe fotowing wil eel oe dnhuion a ‘8 Insolvency ofthe partnership ’. Admission of a new partner in an existing partnership © Assignment of an existing partner's interest to a thd person 4. Retirement ofa partner 3. Which of the following statements is correct! when a new partnership by purchasing a portion ofa capital interest of an exist ‘4 Itwill result to revaluation or impairment of existing assets ofthe partnership. 'b. The partnership will ecognize gain or los inthe tansfer of capital fram one partner to another The partnership isnot dissolved by the fa new partner by purchase. ip is not dissolv ion of anew hase, Iu just ret to eedt to capital of nowy edited partaer with bomesponding debit to epital ofthe selling partner. 1 | | ae 4. In ease pf admission of « new partner in an existing parmership throjgh investment to the parnership, which of the following seenario will result to bonus to few partner and asset revaluation? 4 Te foal conte capital of all pumers i equal toe total greed capital of new arurship while the agreed capital of new parner is higher thap the amount he has contbuted. '. The total contributed capital of all partners is more than the total agreed capital of new partnership while the agreed capital of new partaer is lower than the amount he has contributed, ‘© The fotal contributed capital of all partners is less than the total agreed capital of new pparuiership while the agreed capital of new partner is higher than the amount he has ‘contribute. 4. The total consibuted capital of all partners is more than the total agreed capital of new partnership while the total agreed capital of old partners is equal to the amount they contributed. 5. IF parmer who retired from the partnership receives less than the capital balance before retirement which alo resulted to decrease in the capital balance of remaining partners, which is coreet? ‘a. The feirng partner receives bonus from remaining partner. , Am impairment los i resognized before the retirement, Revaluation surplus is recognized before the retirement. 4d. The retiring partner gives bonus tothe remaining partner | 8603Page 2 Pat. Problem Solving |. On December 31, 2020, the Statement of Financial Position of ABC Partnership provided the following data with profit or loss ratio of 1:63: Current Assets 1,000,000 Total Liabilities 600,000 Noncurrent Assets 2,000,000 A, Capital 900,000 B, Capi 800,000, © Papal 700,000 On January 1, 2021, D is adaited othe parmership by purchasing 40% ofthe capital imterest of B sta price of P500,000. ‘What i the capital balance of B after the admission of D on January 1, 2021? 540,000 480,000 420,000 4. 300,000 2 On December 31, 2020, the Stetemeat of Finencial Position of ABC Partnership provided the following daa with profit or lose retio of 16:3: Curent Assets 3,300,000 Tota Liabilities 300,000 Noncurrent Assets 2,000,000 A.Capita 1,400,000 B, Capital "700,000 Capital 900,000 Qn Janvary 1, 2021, Dis admitted to the pertnership by investing P1,000,000 to the partnership for 20% capital interest. [the all the assets ofthe exising partnership are property valued, what is the capital balance of C after the admission of D? 960,000 b. 900,000 846,000 1,200,000 3. On December 31, 2029, the Stotzinsat of Financiol Position of ABC Parinership provided the following data with profit ce los ratio of 51:4: Curent Assets 1,500,000 Total Liabilities 500,000 Noncurrent Assets 2/000,00 A, Capital 1,100,000 B, Capital 1,200,000 ©, Capital "700,000 On January 1, 2021, D is admitted to the partnership by investing P500,000 tothe partnership for 10% capital interest The total agreed capitalization of the new partnership is P3,000,000. |. What i the eapital balance of D after his adwission tothe partnership? 2 500,000 b. 300,006 © 350,000 4. 400,006 2 Whats the capital nalaace of efter the adzvssion of D tothe partnership? a 580,000 b. 820,000 «500.000 4. 780,000Ps 3 ‘4 On December 31, 2020, ABC Partnership's Statement of Finjncal Positions shows that A, B and C have capital balances of 500,000, P300,000 and P200,000 with profit or loss ratio of 1 3:6. On January 1, 2021, C retired from the partnership and ‘ected P350,000. At the dime of C's 1 sement, an asset of the partnership is undervalued. | athe cpt an oA ar em 2 stn £8 2 aan 6 Se | 5. On December 31, 2020, ABC Patnenhip's Statement of Finhcil Poston shows hat A,B and C hve copa balances of P400,000, P300,00 add P100,000/ with prof or less aio of 14:5 On January |, 2021, C retired from the Partnership and redeived P80,000. At the time of C’s ‘tron ase nits ot parm ae fry aed ‘What is the capital balance of B after the retiremeat of C? a. 284,000 , 308,000 316,000 4. 320,000 6 On December 31, 2020, the unadjusted Statement of Financial Postion of UFC Partnership shows the following data with profit or loss sbaring agreement of 2:35 ! | Total Assets P100,000,000 Total Liabilities | P40,000,000 U, Capital 000,000 F, Capital } 20,000,000 Capital 30,000,000 On December 31, 2020, U decided to retize from the partzership. However [before the distibution of cash td U, the following dst exrors were discovered during the pre-retiretpent act * Pacing 2020, the propery, plant and equiptnt has not be subject to fevaluation surplus by 15,006,000, * The 2820 net income is overstated by P5,000,000. ‘After the adjustment, U received retirement pay of P15,000,000 for his capital imterest. ‘What i the capital balance of F after the retirement of U? 23,000,000 . 21,000,000 18,875,000 4. 21,875,000 7 SA and T are partners with capital balances of P784,000, P2,730,000 and PI,190,000 TR are satin brofits end losses in the rato of 32:1. D is admit asa new parte bringing With him expertise and is to invest cash fora 25% interest in the partnership which cludes vate ‘of P735,000 for bonus upon his admission. How much cash should D contribute? 1,323,000 . 2,100,000 1,575,000 ."s88io00 3603i Page 4 8 E and M are partners with cpial balances of P30,000 and P70,000 sespctvely. E has a 30% interest in profits and losses. At this time, the pataership has decided to admit R and Las new paras. R contributes cash of 5,000 fr a 20% interes in capital and a 30% intrest in profits ae losses L contributes cash of P0000 and an equipment fr a 25% interest in capital and 35% interest in pris and tosses. If bonus emounting to P18,250 is given to the old partners, what isthe value of the €q ‘contributed by L? a 31,750 b. 43,750 50,000 50,138 9. uliet and Kilo have capital balances of P200,000 and P220,000 respectively before admission of Lima. Their profit and loss agreement was 35:65. Lima was to be admitted for 40% interest in the ‘parinership and 20% in the profits and losses by contributing a used machine which had a cost of| 205,000 and an appraised value of P180,000. After admission of Lima, Juliet and Kilo agreed to share profits and losses equally. At te end ofthe year the new partnership generated net income of, 130,000. 1 2. How much isthe capital balance of Juliet at the end of the yeat? a 231,000 b, 221,000, ©. 224,500 4. 247,000 3. Assuming tkere is an jmplied omlerveluntion or overvaluation of an asset, how much is ‘the undervaluation or (avervaluation) ofthe asset? a 300,000 (150,000) ©. (300,000) 4. 150,000 4. Assuming chere is an impliod undervsluation or overvaluation of an asset, how much is ‘the capital balance of Kilo at the end of the yea a 497.000 b. 77,000 2 369,500 4. 174506 END "