PROBLEM 1: TRUE OR FALSE

1. The accounting for the assets and liabilities of a partnership business is different from that
of a sole proprietorship or a corporation
2. A partnership is relatively easy to form but also easy to dissolve.
3. Mr. A contributed land with historical cost of PIM and fair value of P2M to a partnership
business. Mr. A's contribution shall be valued at PM in the partnership books.
4. A bonus given to a partner is treated as a reduction to the capital account(s) of the other
partner(s).
5. Ms. B contributed equipment with carrying amount of P100 and fair value of P200 to a
partnership. No bonus is given to any partner. In the partnership's books, equipment is
debited for P200 but B's capital account is credited for P100.
6. Mr. C contributed land with fair value of PIM to a partnership. The land has an unpaid
mortgage of P.2M which the partnership agreed to assume. The valuation of Mr. C's net
contribution is P1.2M.