Parthersiyp Operation [31]. Me. Zoom and hs very clase friend, Mr. Boom, formed a partnership on January 1, 2011, with Zoom contibuting P16,000 cash and Boom contributing equipment. with a book value of P6.400 and fair value of P4,800. and inventory items, with a book value of P2400 2nd fa vale of P3,200, During 2011, Boom made addonat vestments of P1500 on Ape 11and P1,600 on June 1, and withckew P4,000 on September 1. Zoom had no actions investments or withdrawals during the year. What was the average capital balance ot Mr. Boom curing 2011? 2. P9,600 b. P6.800 c. PB,000 6. P7,200 [32]. Dulce Martin. a partner in a partnership that carries the name of The Sweet Shop, thas a 20% participation in partnership profits. Her capital accourt has a net decrease of 48,000 during 2011. In the same yeer, she withdrew P104,000 (charged against her capital ‘Bccoun!) and contributed property vakied at P20,000 to the partnership. Tho net income of the partnership for 2011 was: 2. P 36,000 b. 120,000 c. P132,000 4. 440,000 [33]. _ Partners Jose, Luciano, and Placido have average capital balances of P240,000, 120,000, and 80,000, respectively, during 2011. Each partner receives 10% interest on Ha ieveroge Copia bolance, After dockuciiig naleries of PE0,000 fx Jose ond PA0,000 Fx Placido, the residual prot or oss is divided equaly. in 2011, the partnership sustained a 66,000 loss before parineis’interests and salaries. By how much would Placido's capital ‘account change? 2. P20,000 increase b. P22,000 6ecrease . P32,000 decrease 6. P48,000 increase (34). On January 1, 2011, Zep and Beep have capital baiznces of P20,000 and 16,000, respectively. On Juiy 1, 2011, Zeep invested an addtional P4,000 while Beep \witndrew 1,000. Profits and losses are divided as folows: Beep is the managing partner 2nd as such shall receive P16,000 as salary. with Zeep recelving P7.200; both partners should receive interest of 10% based on their beginning capital balances, to offset whatever Gifference in capital investments they have: and, any remainder shall be divided equally. The net income of the partnership for 2011 was P9,600. What was Zeep's share innel income for 2011? a. 9,200 b. 4,800 cP 880 6. P 600[35]. Rec and White formed a partnership in 2011. The partnership agreement provides for annual salary allowances of P55,000 for Red and P45,000 for White. The partners share profits equally and losses in 2 60:40 ratio. The partnership had eamings of P80,000 for 2011 before any allowance to partners. What amount of these eamings should be credited to each partner's capital account? Red White a, P40,000 —P40,000 b. P43,000 37,000 c. P44,000 36,000 d. P45,000 35,000 [36]. On January 2, 2011, Bueno and Perez formed a partnership with capital distributions of P175,000 and P25,000, respectively. They agreed to share profits and losses 80% and 20%, respectively. Perez is the general manager and works in the partnership full time. Perezis given salary of P5,000 a month; an interest of 5% on starting capital; and a bonus of 15% of net profit before the salary, interest, and bonus. The condensed profit and loss statement of the partnership, for the year ended December 31, 2011, |s as follows: Net sales 875,000 Cost of sales 700,000 Gross profit on sales 175,000 Expenses (including salary, interest and bonus) 143,000 Net profit P 32,000 The bonus in 2011 is a. P13,304.35 b, P18,000.00 cc. P15,300.00 d, P20,700.00‘Questions 37 & 38 are based on the following Information: ‘Heim, Marc. and Alex formed a partnership on January 1, 2011, and contributed P150.000, 200,000, anc P250,000, respectively. The articles of co-partnership provides that the ‘operating income be shared among the partners as folows: as salary, P24,000 for Herm, P18,000 for Mare. and P12,000 for Alex: Interest of 12% on the average capital during 2011 (of the three partners: and, the remainder in the ratio of 24:4, respectively. ‘The operating income forthe year ending December 31, 2011 amounted to P176,000, Herm contributed adktiona! capital of P30,000 on vty 1 and made a drawing of P10,000 on Cctober 1: Mare contributes additional espital of P20,000 on August 1 and made a crawing (0 P10,000 on October 1; and, Alex made a drawing of P30,000 on November 1. [57]. The division of the P176,000 operating incomes: 2, Horm, P53,760; Mare, P&2,520; and, Alex P59,720 Herm, P35,200; Mare, P70,400; and, Alex, P70,400 Horm, P48,400: Mare, P86,800; and, Alex PEO,800 44. Herm, P53,180; More, P&2,060: and, Alex, PE0,760 [38]. The pariners’ capital balances on December 31, 2011 are: a. Herm, P179,680; Marc, P229,360: and, Alex, P239,260 bb. Herm, P179,760; Marc, P229,520; and, Alex, P239,520 cc, Herm, P189,680; Marc, P239,360; and, Alex, P269,260 6. Herm, 223,180; Marc, P272,060: and, Alex, P280,760 [39]. The partnership agreement of Bing and Bong provides that Bing fs to receive a 20% bonus on profits before the bonus, Remaining profits and losses are dvided in the respective ratio of 2:3. Which partner has a greater advantage when the partnership realizes profit or vtien it sustains a loss? Profit Loss a. Bing Bong b Bing Bing ©. Bong Bing Bong Bong [40]. _Michete, an actve partner in he Michele-Esme Partnership, receives an annus! bbonus of 25% of the partnership income atter deducting the bonus. For the year ended December 31, 2011, the partnership income before bonus amounted to P240,000. The ‘bonus of Michete for the year 2011 Is. 45,000 48,000 60,000 0,000[31]. _—_—_ Letter "Bis tha correct answer, The average capital balance of Mr. Boom during 2011, is P8,800, computed as follows: January 1 Investment: P8,000 x 12/12 P8,000 April 1 Investment 1,600 x 9/12 1,200 June 1 Investment 1600x 712 933 Sept 1 Investment (4.000) x 4/12 (1.333) Mr. Booms average capital balance during 2011 P 6,800 [32]. Letter “Bis the correct answer. The net income of the partnership for 2011 was P120,000, computed as follows: Withdrawal P104,000 Additional investment ( 20,000) Net decrease in capital ( 48,000) Dulce’s share In net Income P 36,000 Divide by Dulce’s P&L ratio 30% Partnership's net income for the year 2011 P120,000Total Placido Interests: P440,000 x 10% ; PB0,000 x 10% 44,000 P 8,000 Salaries 100,000 40,000 Balance (deficiency), equally (210,000) (70,000) Net profit (loss) P(66,000) —P(22,000) [34]. Letter ‘Dis the correct answer. Zeep’s share In net Income for 2011 Is P600, computed as follows: Beep Zoop Total Salary P16,000 P7,200 P23,200 10% interest on beg. cap. 1,600 2,000 3,600 Remainder: equally (8,600) (8.600) (17,200) Net Income P 9,000 P 600[35]. Letter “B* Is the correct answer. ‘The amount of eamings that should be credited to each partner's account are P43,000 and P37,000, for Red and White, respectively, computed as follows: Red White Total Salary allowances P55,000 45,000 100,000 Loss after allowances (60:40) (12,000) (8,000) { 20,000) Eamings credited to partners P43,000 37,000 P 80,000 (36). Letter “B" Is the correct answer. The bonus to Perez in 2011 is P18,000, computed as follows: Net profit after salary, interest, and bonus P 32,000 Salary of Perez (P5,000 x 12) 60,000 Interest on starting capitals (P200,000 x 5%) 10,000 Net profit before salary and Interest, but before bonus P102,000 Divide by 85% Net profit before salary, interest, and bonus P120,000 Bonus of Perez in 2011 (P120,000x 15%) P 18,000[37]. Letter ‘D" is the correct answer. The P176,000 operating Income Is divided as Herm, P53,180; Marc, P62,060; and Alex, P60,760, respectively, computed as follows:Herm: PIS0,000x12/12 150,000 30,000 6n2 15,000 0,000) x 3712 2.500) ‘Average Capital 162,500 Mare:P200,000x 12712 P200,000 20,000 sn2 8333 (0,000) x a2 (2,500) ‘Average capital ———P205,833. ‘Alex: P250,000x12"12 260,000 (80,000) x 212 (6500) ‘Average capital ——P245,000 Herm Mare Alox Total Salary alowances 24,000 18,000 12,000 54,000 12%6 Interest on average capital 18,500 24,700 29.400 73.600 Remainder, 2:44 9,680 19,360 19,360 48,400 Division of ape. ne. 53,180 60,670 176,000[38]. Letter "D"is the correct answer. ‘The partners’ capital balances on December 31, 2011 are Herm, P223.180: Marc, P272,060; and Alex, P280,760, respectively, computed as follows: Herm Mare Ax Capital balances, Jan. 1 150,000 200,000 250,000 30,000 20,000 Drawings (10,000) (10,000) (80,000) ‘Share In operating Income (6) 53,180 62,060 60,760 Capital balances, Dec, 31, 2011 223,180 272,060 280,760 [39]. Lotter "Bis tho correct answer. In case of a proft, Bing’s share will be 20% plus 40% of the remaining 60%, or a total of ‘52%; In case of a loss, Bing's share wil only be 40%. [40]. Letter "B"is the correct answer. ‘The bonus of Micholl for the year 2011 is P48,000, computed 2s follows: Michelle's bonus (P240,000 , 125%) x25% 48,000