(CPA REVIEW SCHOOL OF THE PHILIPPINES Manila ‘Advanced Financial Account Guctrero/German/DeJesusLia/Ferrer/Laco/Valix PARTNERSHIP OPERATION. = i of, : | | |. Which ofthe following transactions shall not fee the capital balance ofa partaer? & Share of a partner in the partnership's net Joss. 2. Receipt of bonus by a partner fom another partner based on the agreement. Advances made by the partnership to « parmer. 4. Additional investment by a partner to the partnership. 2. In the abbence of agreement as to dstibution of profi, ow shall the|parmership profit be istributed to the partners? { ‘The industrial partner shall receive a share equivalent tothe least share of e capitalist partner while the capitalist partners shall share based on capital contribution ratio, ‘The industrial partner shall receive a just and equitable share and the remainder shall be Aistributed tothe capitalist partners on the basis of capital contribution ‘© The profit shall be distributed on the basis of loss contribution ratio Which may have been agreed upon by the partners, ! 44. The profit shall be distributed equally to al parners including the industrial partner. 3. In the absence of agreement so distribution of as, how shal the parmerhip oss be dsnbuted tothe paren? r 4 The obs shal be distributed equally to ll peers including the industrial partner eta pr sl en en patel le Be i pen Sa share ually ¢- The adsl prner sal be exmpted fom paoentip lm wile thee ptes sl be distbutd on the bss of cpt conto sat, 4. The idstial pane shall bs exempted om parnership loss because shal be dstibuted to the TC Partners ony in accordance with profit agreement ratio. | 4. Which ofthe following will decrease the capital balance ofa pertner? ‘Share in partnership profit | '. Receift of share in revaluation surplus from a parinership property, plant and equipment cc Drawing made by a partner Advances made by a partner to the partnership | 8602Page 2 art Paciership Operation On January 1, 2020, A, B and C formed ABC Partnership with total agreed capitalization of 1,000,000, The capital interest ratio of the ABC Parinership is $:1:4 while the profit or loss ratio 1 3.255, respectively for A, B and C. During 2020, 4 and B made addtional ‘r~s-'~ ~ of P200,000 and P5S00,000, respectively. At the ¢end of 2020, B and C made drawings o P300,06 » and P100,000, respectively. On December 31, 2020, the capital balance of B is reported at P200,000, 1. What is the uct income or net loss of ABC Partnership for the year ended December 31, 20202 500,000 toss . 1,000,000 loss ©. 800,000 income 4. 1,200,000 income 2, What is the capital balance of C on December 31, 20207 a 130,000 b 59.000 © 200.000 & 250,000 2. On January 1, 2020, A, B and C formed ABC Partnership with original capital contribution of 300,000, P500,000 and P200,000. A is appointed as managing partner. During 2020, A, B and C mado additional investments of P5G0,000, P200,000 and P300,000, respectively. At the end of 2020, A, B and C made drawings of P200,000, P100,000 and P00,000, respectively. At the end of 2020, the capital balance of Cis reported at P320,000. The profit ot loss agreement othe partners is as Follows: 10% interest on cziginal capital connitution of the partners. ‘Quarterly salar of P40 000 and P1C,000 for A and B, respectively. ‘Bonus to 4 equivaders to 2076 of Net Income afer interest aad salary all partners ‘Remainder is be distributed equelly among the pastes, A, What is the parmership profit for the year ended December 31, 2020? 900,000 ». 1.020.000 ©. 1,050,009 4 "960,010 2, What is A's share in partnership profit for 26207 190,000 . 340,000 «$40,000 200,000 3. What is BYs share in partnership profit for 2020? 200,006 290,000 50,000 90,000 8602Page 3 3. On January 1, 2020, K and § formed KS Partnership and the articles of co-partnership provides that ‘rofit or loss shall be distributed accordingly: + 10% interest on average capital balance. ‘+ P50,000 and P100,000 quarterly salary for K and S, respectively. ‘The remainder shall be distributed in the ratio of 3:2 for K and S, respectively. ‘The following transactions regarding the capital balance of the partners for year 2020 are provided: K, Capital 8, Copital January 1, 2020 investment P1,000,000 00,000 March 31, 2020 investment 100,000 July 1, 2020 withdrawal (200,000) September 30,2020 withdrawal (200,000) October 1, 2020 investment 700,000 ‘The chief account of the partnership reported net income of P1,000,000 for year 2020, ‘What isthe capital balance of K on December 31, 20207 1,951,500 1,451,500 & 2,181,500 4. 1,251;500 4. On July 1, 2020, D and J formed DJ Partnership with initial investment of PIM and P2M, respectively. is appointed as the managing partner. The articles of co-partnership provide that profit or loss shall be distributed accordingly: + 30% imereston original capital contribution ratio. ‘+ Monthly salary of P20,000 and 10,000 respectively for D and J + Dshall be entitled to bomus equivalent to 20% of net income after interest, salary and bonus. ‘+ The remainder shall be distributed in rato of 3:2 for D and J respectively. For the year ended December 31, 2020, the partnership reported net income of P750,000. 1. What is the share in net income of D for the year ended December 31, 2020? a 400,000 '. 250,000, 350,000, 4. 500,000 2 Using the same data, what isthe share in net income of J assuming the bonus is equivalent to 20% of net income after interest and salary but before bonus for the year ended December 31, 2020? a 351,600 b. 398,400 350,000 4. 500,000 ‘5. Partners Samson and Delilah have profit and loss agreement with the following provisions: salaies of P90,000 and P135,000 for Samson and Delilah, respectively: a bonus to Samson of 10% of net income afer salaties; and interest of 10% on average capital balances of P60,000 and P10S,000 for Samson and Delilah, respectively, One-third of any remaining profits will be allocated to Samson ‘and the balance to Delilah, If the partnership had net income of P66,000, how much should be allocated to Partner ‘Samson, assuming that the provisions of the profit and loss agreement are ranked by order of riority starting with 1) salaries, 2) interest, 3) bonus and up to the extent of the ranking, only? a. 39,600 b. 37,500 36,000 d. 26,400 END 8602