19.

A partnership has the following capital balances:

Allen, capital P60,000
Burns, capital 30,000
Costello, capital 90,000

Profits and losses are split as follows: Allen (20%), Burns (30%), and
Costello (50%). Costello wants to leave the partnership and is paid
P100,000 from the business based on provisions in the articles of
partnership. If the partnership uses the bonus method, what is the
balance of Burns’s capital account after Costello withdraws?
A. P24,000 C. P33,000
B. P27,000 D. P36,000

20. At year-end, the Cisco partnership has the following capital balances:
Montana, capital P130,000
Rice, capital 110,000
Craig, capital 80,000
Taylor, capital 70,000

Profits and losses are split on a 3:3:2:2 basis, respectively. Craig

decides to leave the partnership and is paid P90,000 from the business
based on the original contractual agreement. If the goodwill method is to
be applied, what is the balance of Montana’s capital account after Craig
withdraws?
A. P133,000 C. P140,000
B. P137,500 D. P145,000

21. A local partnership is liquidating and is currently reporting the

following capital balances:

Angela, capital (50% share of

all profits and losses) P 19,000
Woodrow, capital (30%) 18,000
Cassidy, capital (20%) (12,000)

Cassidy has indicated that a forthcoming contribution will cover the

P12,000 deficit. However, the two remaining partners have asked to
receive the P25,000 in cash that is presently available. How much of this
money should each of the partners be given?
A. Angela, P13,000; Woodrow, P12,000
B. Angela, P11,500; Woodrow, P13,500
C. Angela, P12,000; Woodrow, P13,000
D. Angela, P12,500; Woodrow, P12,500

22. A partnership has the following balance sheet just before the final
liquidation is to begin:

Cash P26,000 Liabilities P 50,000

Inventory 31,000 Art, capital (40% of P&L) 18,000
Other assets 62,000 Raymond, capital (30%) 25,000
________ Darby, capital (30%0 26,000
Total P119,000 Total P119,000

Liquidation expenses are estimated to be P12,000. The other assets are sold
for P40,000. What distribution can be made to the partners?
A. P-0- to Art, P1,500 to Raymond, P2,500 to Darby.
 B. P1,333 to Art, P1,333 to Raymond, P1,334 to Darby.
C. P-0- to Art, P1,200 to Raymond, P2,800 to Darby.
D. P600 to Art, P1,200 to Raymond, P2,200 to Darby.

23. The partnership has the following capital balances: A (20% of profit and
losses = P100,000; B (30% of profits and losses) = P120,000; C (50% of profits
and losses) = P180,000. 23. If the partnership is to be liquidated and P30,000
becomes immediately available, How much will A receive?

A. P6,000 to A, P9,000 to B, P15,000 to C.

B. P22,000 to A, P3,000 to B, P5,000 to C.
C. P22,000 to A, P8,000 to B, P-0- to C.
D. P24,000

24. On January 1, 2011, Brendan, Inc. reports net assets of P760,000 although
(equipment with a four-year life) having a book value of P440,000 is worth
P500,000 and unrecorded patent is valued at P45,000. Brandon Corporation
pays P692,000 on that date for an 80 percent ownership in Brendan. If the
patent is to be written-off over a 10-year period, at what amount should it
be reported on consolidated statements at December 31, 2012?
A. P28,000 C. P36,000
B. P32,400 D. P40,500

25. On January 1, 2011, Harry, Inc. reports net assets of P880,000 although a
patent (with a 10-year life) having a book value of P330,000 is now worth
P400,000. Newt Corporation pays P840,000 on that date for an 80 percent
ownership in Newt. On December 31, 2012, Harry reports total expenses of
P621,000 while Newt reports expenses of P714,000. What is the consolidated
total expense balance on December 31, 2012?
A. P1,197,800 C. P1,342,000
B. P1,335,000 D. P1,349,000