Professional Documents
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1. On December 1, 2015, E and F formed a partnership, agreeing to share for profits and losses in the ratio of 2:3,
respectively. E invested a parcel of land that cost him Php 25,000. F invested Php 30,000 cash. The land was sold for
Php 50,000 on the same date, three hours after the formation of the partnership. How much should be the capital
balance of E right after formation?
a. Php 25,000 c. Php 60,000
b. Php 30,000 d. Php 50,000
2. The Partnership has the following accounting amounts:
(1) Sales – Php 70,000
(2) COGS – Php 40,000
(3) Operating Expenses – Php 10,000
(4) Salary allocations to partners – Php 13,000
(5) Interest paid to banks – Php 2,000
(6) Partner’s withdrawals – Php 8,000
It is agreed that for purposes of establishing C’s interest, the following adjustments shall be made:
(a) An allowance for doubtful accounts of 3% of accounts receivable is to be established.
(b) The merchandise inventory is to be valued at Php 23,000.
(c) Prepaid salary expenses of Php 600 and accrued rent expense of Php 800 are to be recognized.
Compute for: (1) C’s adjusted capital before the admission of D; and (2) the amount of cash investment by D:
a. (1) Php 35,347; (2) Php 11,971 c. (1) Php 35,374; (2) Php 17,687
b. (1) Php 36, 374; (2) Php 18,487 d. (1) Php 28,174; (2); Php 14,087
4. Lancelot is trying to decide whether to accept a salary of Php 40,000 or a salary of Php 25,000 plus a bonus of 10% of
net income after salary and bonus as a means of allocating profit among the partners. Salaries traceable to other
partners are estimated to be Php 100,000. What amount of income would necessary so that Lancelot would consider
the choices to be equal?
The partnership’s 2011 net income was Php 500,000 before any allocations to partners. What amount should be
allocated to X?
What amount of interest should be credited to S’s capital account for 2015?
a. Php 45, 750 c. Php 46,125
b. Php 49,500 d. Php 51,750
7. A, B and C are partners with average capital balances during 2015 of Php 360,000, Php 180,000 and Php 120,000,
respectively. Partners receive 10% interest on their average capital balances. After deducting salaries of Php 90,000 to
A and Php 60,000 to C the residual profit or loss is divided equally. In 2015 the partnership sustained a Php 99,000
loss before interest and salaries to partners. By what amount should A’s capital account change?
8. H, R, T and K own a publishing company that they operate as a partnership. The partnership agreement includes the
following:
(a) H receives a salary of Php 20,000 and a bonus of 3% of income after all bonuses.
(b) R receives a salary of Php 10,000 and a bonus of 2% of income after all bonuses.
(c) All partners are to receive 10% interest on their average capital balances.
Any remaining profits and loss are to be divided equally among the partners.
Determine how a profit of Php 105,000 would be allocated among the partners.
9. A and B entered into a partnership as of March 1, 2015 by investing Php 125,000 and Php 75,000, respectively. They
agreed that A, as the managing partner, was to receive a salary of Php 30,000 per year and a bonus computed at 10%
of the net profit after adjustment for the salary; the balance of the profit was to be distributed in the ratio of their original
capital balances. On December 31, 2015, account balances were as follows:
Inventories on December 31, 2015 were as follows: supplies, Php 2,500, merchandise, Php 73,000. Prepaid insurance
was Php 950 while accrued expenses were Php 1,550. Depreciation rate was 20% per year.
The partners’ capital balances on December 31, 2015, after closing the net profit and drawing accounts, were:
A B
a. Php 135,940 Php 47, 960
b. Php 139,540 Php 49,860
c. Php 139,680 Php 48,680
d. Php 142,350 Php 47,670
10. On January 2, 2015, B and P formed a partnership. B contributed capital of Php 175,000 and P, Php 25,000. The
agreed to share profits and losses 80% and 20%, respectively. P is the general manager and works in the partnership
full time and is given a salary of Php 5,000 per month; an interest of 5% of the beginning capital (of both partner) and a
bonus of 15% of net income before the salary, interest and the bonus.
The profit and loss statement of the partnership for the year ended December 31, 2015 is as follows:
a. Php 13,304
b. Php 16,456
c. Php 18,000
d. Php 20,700