Acco Level 1

EASY

1. A characteristic of partnership which states that there cannot be a partnership without contribution
of money, property, or industry to a common fund

A. Mutual Contribution B.Co-ownership of Contributed Assests

C. Division of Profits or Losses D. Mutual Agency

Answer: A. Mutual Contribution

2. A Jay Cee invested into a partnership a building with a Php 550,000 carrying value and Php 700,000
fair market value. The related mortgage payable of Php 425,000 was assumed by the partnership. As a
result of the investment, the Cee’s capital account would be credited for

A. Php 425,000 B. Php 550,000

C. Php 275,000 D. Php 700,000

Answer: C. Php 275,000

3. A kind of partner who does not take active part in the business of the partnership and is not known as
a partner.

A. Secret Partner B. Dormant Partner

C. Nominal Partner D. Silent Partner

Answer: B. Dormant Partner

AVERAGE

1. Jay Cee and Eigh Arh are best friends and they decided to form a partnership. Cee and Arh receive a
salary of Php 710,000 and Php 820,000, respectively the end of the year, the partnership suffered a loss
of Php 600,000. The partnership agreement provides for the division of profits and losses in the ratio of
2:1 for Cee and Arh, respectively. By how much would Cee’s account decrease?

Answer: Php 620,000

2. JG Partnership was formed on January 1, 2019 by Jin Art and Gin Pee through investing Php 400,000
and Php 800,000, respectively. On April 1, 2019, Jin invested an additional Php 100,000 to the
partnership. Meanwhile, on July 1, 2019, Gin withdrew Php 50,000 from the partnership. An amount of
Php 300,000 was gained as profit of the partnership by December 31, 2019. Compute for the average
capital balances of each partner.

Answer: Jin Art – Php 475,000

Gin Pee – Php 775,000

3. A 15% interest on average capital account balances of partners Hin and Tay was Php 71,250 and Php
116,250, respectively. If the partnership’s profit at the end of the year was Php 300,000 and the
partnership’s agreement for the distribution of profits and losses would be equal, how much would be
partner Tay’s share in profits?

Answer: Php 172,500

DIFFICULT

1. Double D partnership gained a profit amounting to Php 400,000 and the partnership agreement
between Anne Drehs and Ran Dy provided for the following:
a. Bonus to Drehs of 25% of profit after salaries and interest but before bonus;
b. Annual salaries of Php 100,000 to Drehs and Php 60,000 to Dy;
c. Average capital balances’ interests: Php 71,250 and Php 116,250 for Drehs and Dy, respectively;
d. Balance to be divided in a ratio 40:60.
Find Dy’s share in profits.

Answer: Php 199,875

2. Manda Rin and Rambong Bong are partners with capital balances of Php 400,000 and Php 200,000,
respectively. They share profits in a ratio of 3:1. The partners agreed to admit Revilla Go who will invest
Php 240,000 for a one-third interest in the business. Prepare the journal entry for the bonus given and
admission of the new partner.

Answer: Cash Php 240,000

Rin, Capital 30,000
Bong, Capital 10,000
Go, Capital Php 280,000
3. JPIA Inc., the premier tutorial service provider in the country, has the following shareholder’s equity:
*12% Preference Shares, Php 100 par, authorized 4,000 shares, Php 200,000
2,000 shares issued and outstanding
*Ordinary Shares, Php 100 par, authorized 6,000 shares, 3,000 300,000
shares issued and outstanding
*Retained Earnings 260,000
Due to failure of dividend declaration in the past two years and current year’s results of operation, the
board declared cash dividends of Php 200,000. Determine the dividends per share for ordinary
shareholders under non-cumulative and non-participating preference shares

Answer: Php 58.67

CLINCHER

1. Scrutinize each statement below:

I. Retained earnings consist of a pool of funds to be distributed to shareholders.
II. Retained earnings represent cash readily available for dividends.

A. Only the first statement is correct B. Only the second statement is correct

C. Both statements are correct D. Both statements are incorrect

Answer: D. Both statements are incorrect

2. Scrutinize each statement below:

I. When ordinary shares with a par value are sold for a price that exceeds par value, the Ordinary Shares
account is credited only for the par value of the shares sold.
II. When ordinary shares without par value are sold, the proceeds should be credited to the ordinary
shares account.

A. Only the first statement is correct B. Only the second statement is correct

C. Both statements are correct D. Both statements are incorrect

Answer: C. Both statements are correct