TEST 1: MULTIPLE CHOICE. Write The Letter of The Best Answer in The Answer

COLLEGE OF ACCOUNTANCY
FINANCIAL ACCOUNTING & REPORTING PART 2

FINAL EXAMINATION - QUESTIONNAIRE
Faculty: E. R. BUNYI
nd
2 Semester SY 2019-2020
TEST 1: MULTIPLE CHOICE. Write the letter of the best answer in the answer
sheet provided. Provide solutions. (2 POINTS EACH)
1. Bee and Cee share in the partnership’s profit in the ratio of 2:1, respectively. Bee
received P122,500 as his share. How much did Cee receive as his share?
A. P61,250
B. P183,500
C. P122,500
D. P61,000
ANSWER
SOLUTIONS
2. Bee, Cee and Dee share in the partnership’s profit and losses in the ratio of 3:4:5.
During the year, the partnership’s distributive income is P750,000. What is the
amount of Dee’s share from the partnership’s income?
A. P375,000
B. P250,000
C. P62,500
D. P312,500
ANSWER
SOLUTIONS
3. Bee, Cee and Dee share in the partnership’s profit and losses in the ratio of 3:4:5.
During the year, the partnership’s distributive income is P750,000. What is the
amount of Cee’s share from the partnership’s income?
A. P375,000
B. P250,000
C. . P312,500
D. P62,500
ANSWER
SOLUTIONS
4. Bee and Cee Partnership has a P450,000 net income during the year. Bee gets credit
for salary of P120,000. How much of the profit is credited to Cee if they share profits
in a ratio of 60:40, respectively?
A. P270,000
B. P132,000
C. P198,000
D. P180,000
ANSWER
SOLUTIONS
5. The BeeCeeDee Partnership shows a net profit of P300,000 during the year. If
partners Bee, Cee and Dee have income ratios of 50%, 30% and 20%, respectively,
how much is Cee,s share from the net income of the partnership?
A. P90,000
B. P300,000
C. P150,000
D. P60,000
ANSWER
SOLUTIONS
6. The capital balances of partners Bee and Cee are as follows:
Bee Cee
January 1, beginning 200,000 400,000
June 30, investment 100,000
-
September 30, withdrawal 200,000
Balance 300,000 200,000
Their agreement is to share profit and loss based on average capital balance. How
much is the share of Cee in the partnership’s income of P450,000?
A. P262,500
B. P600,000
C. P187,500
D. P350,000
ANSWER
SOLUTIONS
7. The capital balances of partners Bee and Cee are as follows:
Bee Cee
January 1, beginning 200,000 400,000
September 30, investment 100,000
September 30, withdrawal -200,000
Balance 300,000 200,000
Their agreement is to share profit and loss based on average capital balance. How
much is the share of Bee in the partnership’s income of P450,000?
A. P575,000
B. P273,913
C. P225,000
D. P176,087
ANSWER
SOLUTIONS
8. Bee and Cee agreed to share the partnership’s profit as follows:

To Bee: P15,000 per month. 5% bonus after salary and bonus
To Cee: The remaining balance
What is the amount of Cee’s share from the partnership’s income of P411,000?
A. P385,000
B. P219,000
C. P220,000
D. P200,000
ANSWER
SOLUTIONS
To Bee: P10,000 per month. 10% bonus after salary and bonus
What is the amount of Bee’s share from the partnership’s income of P500,000?
A. P345,455
B. P158,000
C. P154,545
D. P342,000
ANSWER
SOLUTIONS
To Bee: P12,000 per month. 10% bonus before salary and bonus
What is the amount of Bee’s share from the partnership’s income of P500,000?
A. P345,455
B. P158,000
C. P154,545
D. P342,000
ANSWER
SOLUTIONS
11. Bee, Cee and Dee are engineer-partners in a construction company with initial capital
of P150,000, P250,000 and P350,000, respectively. They agreed to distribute profit or
loss as follows: 5% interest on capital and the remainder to be divided equally.
At the end of the current year the business earned a net income of P312,000. What is
the amount of Bee’s share from the partnership’s income?
A. P99,000
B. P109,000
C. P104,000
D. P91,500
ANSWER
SOLUTIONS
12. On January 1, 2019; Bee, Cee and Dee as partners established a BCD Company. Bee
contributed cash of P300,000. Cee contributed a parcel of land that cost him
P100,000. At the time of investment, the land has fair value of P200,000. Dee having
the expertise needed in the business was admitted as an industrial partner.
It was agreed that Dee, being and industrial partner shall receive 10% of the partnership
profit. Bee and Cee shall divide the remainder of the profit & loss based on their
respective beginning capital balances.
On its initial year, the business earned a net loss of P600,000. Compute the amount that
will be received by each partner: Bee, Cee and Dee from the partnership loss.
A. P360,000; P240,000 and P0

B. P300,000; P300,000 and P0
C. P200,000; P200,000 and P200,000
D. P450,000; P150,000 and P0
ANSWER
SOLUTIONS
13. Bee invested P50,000 for a 1/3 interest in a partnership in which the other partners
have capital totaling P130,000 before admitting Bee. After distribution of bonus, what
is Bee’s capital?
A. P26,665
B. P60,000
C. P43,335
D. P50,000
ANSWER
SOLUTIONS
14. Bee and Cee partners who share profits and losses in the ratio of 2:1 and have capital
balances of P375,000 and P750,000, respectively. The partners agreed to admit Dee
to the partnership. Dee invested P375,000 for a 35% interest in the partnership. The
new total capital balances after admitting Dee is P1,500,000. Cee’s capital after Dee
is admitted is
A. P700,000
B. P800,000
C. P750,000
D. P675,000
ANSWER
SOLUTIONS
15. Bee and Cee contribute P100,000 cash each while C contributes his skill. The total
partnership capitalization is
A. P200,000
B. P300,000
C. P100,000
D. Answer not given
ANSWER
SOLUTIONS
16. Bee and CEE contributes P150,000 each and Dee will contribute P50,000 plus his
skill. They agreed to share profit at 2 : 3: 1, respectively. The correct amount of the
total partnership capitalization would be
A. P350,000
B. P187,500
C. P375,000
D. P250,000
ANSWER
SOLUTIONS
17. Bee, Cee and Dee formed a partnership in which Bee contributed a parcel of land with
an acquisition cost of P25,000. Cee contributed P50,000 cash, and Dee P75,000 cash.
The land has a fair value of P50,000 at the formation date. The total capital credit of
the partnership would be
A. P175,000
B. P150,000
C. P125,000
D. P145,000
ANSWER
SOLUTIONS
18. If the amount of liabilities is P165,000 and the percentage of partner’s claims in the
total partnership’s assets is 45%. The partnership’s total assets is 45%, the
partnership’s assets would be
A. P200,000
B. 366,667
C. P300,000
D. 255,750
ANSWER
SOLUTIONS
19. Bee and Cee partners who share profits and losses in the ratio equally and have capital
balances of P375,000 and P750,000, respectively. The partners agreed to admit Dee
to the partnership. Dee invested P375,000 for a 20% interest in the partnership.
Bee’s capital after Dee is admitted is
A. P300,000
B. P412,500
C. P375,000
D. P337,500
ANSWER
SOLUTIONS
DATA FOR THE NEXT 5 QUESTIONS

As of December 31, 2019, Bee, Cee and Dee Partnership has the following data before
affecting distribution of income summary with a debit balance of P60,000 from its
operations beginning Jan. 1, 2019.
Cash Non – Payable Bee Bee, Cee, Dee,

cash Loan Capital Capital Capital
Balances P80,000 ? P80,000 P20,000 P100,000 P100,000 P100,000
The partners have the following profit and loss agreement
a) All partners shall have a monthly salary of P2,000.

b) Bee, the managing partner shall have 10% bonus on the profit before salary, interest
on capital and bonus.
c) Interest on beginning capital would be 6% annually. (The have equal beginning
balances)
Upon distribution of P60,000 debit balance of income summary:
20. The capital balances of the partners will be
A. Increased by P20,000 each
B. Decreased by P20,000 each
C. Increased by P10,000 each
D. Neither of the above.
ANSWER
SOLUTIONS
21. The adjusted capital balance of each partner after affecting their respective share from
operations is
A. P120,000
B. P80,000
C. P100,000
D. Answer not given
ANSWER
SOLUTIONS
22. The adjusted total partnership assets would be

A. P340,000
B. P400,000
C. P300,000
D. P240,000
ANSWER
SOLUTIONS
23. Assuming that the partners liquidated the partnership and the non cash assets were
sold for P200,000, the correct amount of loss on realization would be
A. P80,000
B. P60,000
C. P180,000
D. P120,000
ANSWER
SOLUTIONS
24. Based on the assumption from the previous number (above), the cash received by Dee
for the final settlement of his capital balance amounts to
A. P80,000
B. P60,000
C. P180,000
D. P120,000
ANSWER
SOLUTIONS
25. Bee and Cee agreed to form a partnership with agreed capitalization of P300,000,
with Cee contributing 1/3 of the total agreed capitalization. How much should Bee
contribute?
A. P150,000
B. P200,000
C. P100,000
D. P50,000
ANSWER
SOLUTIONS
TEST 2. PROBLEM SOLVING.

DIRECTION: Write your answer in the space provided. Provide solutions with label.
(3 POINTS EACH)
26. The condensed statement of financial position of the partnership of Bee, Cee and Dee
as of December 31, 2019 showed the following:
Total assets P430,000; Total Liabilities P90,000; Bee, Capital- P120,000; Cee, Capital-
P140,000 and Dee, Capital-P80,000. There is no profit and loss agreement. The
partnership has average monthly sales of P150,000 and monthly expenses of P100,000.
1
On July 1, Dee died because of heart attack. The partnership paid the heirs of Dee.
What is the amount paid to the heirs of Dee?
ANSWER/S
SOLUTIONS
27. Bee & Cee have capital balances of P 300,000 and P200,000 respectively before the
admission of Dee. Dee invested P200,000 for a 20% interest in Bee & Cee
partnership. What is the capital balance of Cee after the distribution of bonus?
ANSWER/S
SOLUTIONS
28. Bee & Cee has capital balances of P195,000 and P585,000 respectively before
admitting Dee. Bee & Cee has a profit and loss ratio of 70:30. Dee invested P300,000
for a one-third interest in a Bee & Cee Partnership. After distribution of the bonus,
what is the capital balance of Bee?
ANSWER/S
SOLUTIONS
29. On January 1, Bee & Cee Partnership agreed to admit Dee into the partnership. Dee
purchases 1/2 interest from Bee and 1/4 of Cee’s interest. Dee pays the partners
P25,000 which they divided between themselves. Bee and Cee are sharing profits in
the ratio of 60% and 40%, respectively. Their capital balances are: Bee-P72,000 and
Cee-P36,000. What is the capital balance of Cee after the admission of Dee?
ANSWER/S
SOLUTIONS
30. On June 30, 2019, the statement of financial position for the partnership of Bee, Cee
& Dee, together with their respective profit and loss ratio, were as follows:
Assets at cost, P270,000; Bee, Capital (20%) P70,000; Cee, Capital (20%) P60,000
and Dee, Capital (60%) P90,000.
Bee had decided to retire from the partnership. By mutual agreement, the assets are to
be adjusted to their fair value of P300,000 at June 30, 3019.
It was agreed that the partnership will pay Bee P70,000 cash. No goodwill is to be
recorded.
After Bee’s retirement, how mush is the total partnership capital balance?
ANSWER/S
SOLUTIONS
Total assets P300,000; Total Liabilities P120,000; Bee, Capital- P80,000; Cee, Capital-
P60,000 and Dee, Capital-P40,000.
On this date, the partnership was dissolved and its net assets transferred to a newly
formed corporation. The fair value of the assets was P50,000 more than the carrying
value of the firm’s books. Each of the partners was issued 10,000 shares of the
corporation’s P2 par ordinary share.
How much is the ordinary share capital and share premium?
ANSWER/S
SOLUTIONS
Total assets P400,000; Bee, Capital- P120,000; Cee, Capital-P180,000 and Dee,
CapitalP100,000. The partnership has average monthly sales of P150,000 and monthly
expenses of P100,000. And the partners profit & loss ratio is 50:25:25.
On April 30, Dee died because of heart attack. Before the payment to the heirs of Dee,
the remaining partners agreed that the assets are undervalued by P100,000. The
partnership paid the heirs of Dee on Dec. 31. What is the amount paid to the heirs of
Dee?
ANSWER/S
SOLUTIONS
Total assets P400,000; Bee, Capital- P120,000; Cee, Capital-P180,000 and Dee,
CapitalP100,000. The partnership has average monthly sales of P100,000 and monthly
expenses of P125,000. And the partners profit equally & loss ratio is 40:30:30.
On October 31, Dee died because of heart attack. Before the payment to the heirs of
Dee, the remaining partners agreed that the assets are undervalued by P100,000. The
partnership paid the heirs of Dee on Dec. 31. What is the amount paid to the heirs of
Dee?
ANSWER/S
SOLUTIONS
recorded.
After Bee’s retirement, what is the balance of Cee’s capital account?
ANSWER/S
SOLUTIONS
recorded.
After Bee’s retirement, what is the balance of Dee’s capital account?
ANSWER/S
SOLUTIONS
36. Partnership BeeCeeDee is to be liquidated. After closing the books as of December
31, 2019, the following accounts remained open: Cash-P100,000, Non-cash assets-
P1,300,000, Liabilities – P200,000, Bee, Capital-P300,000; Cee, Capital-P400,000
and Dee, Capital – P500,000. The non-cash assets are sold for P1,450,000. Profits
and losses are shared equally. How should the cash be distributed to the partners Bee,
Cee and Dee?
ANSWER/S
SOLUTIONS
37. Partnership BCD is to be liquidated. After closing the books as of December 31,
2019, the following accounts remained open: Cash-P100,000, Non-cash assets-
P1,100,000, Liabilities – P450,000, Bee, Capital-P150,000; Cee, Capital-P250,000
and Dee, Capital – P350,000. The non-cash assets are sold for P1,400,000. The profit
& loss ratio is 60:20:20 How should the cash be distributed to the partners Bee, Cee
and Dee?
ANSWER/S
SOLUTIONS
38. Bee and Cee are partners, sharing profits and losses equally. They decide to terminate
their partnership. Prior to realization, their capital balances are P130,000 and
P70,000, respectively. After all the non-cash assets are sold and all liabilities are paid
there is a cash balance of P150,000. How much is the gain or loss on realization?
ANSWER/S
SOLUTIONS
P70,000, respectively. After all the non-cash assets are sold and all liabilities are paid
there is a cash balance of P200,000. How much is the gain or loss on realization?
ANSWER/S
SOLUTIONS
P70,000, respectively. After all the non-cash assets are sold and there are still unpaid
liabilities of P50,000. How much is the gain or loss on realization?
ANSWER/S
SOLUTIONS
TEST 3. TRUE OR FALSE. ( 1 POINT EACH)

DIRECTION: Write TRUE if the statement is correct and FALSE if the statement is
incorrect in the space provided / answer sheet provided
41. The income summary account is credited in the entry to record distribution of profits.
42. It is possible to allocate profit or loss to partners based solely on average capital
balances.
43. The retirement of a partner by payment from partnership assets may cause the other
partner’s capital accounts to decrease.
44. A person admitted as a partner into an existing partnership is liable for obligations of
the partnership contracted before his admission.
45. A partnership agreement most likely will stipulate that assets be reappraised when a
partner leaves the partnership.
End of Examination
Good Luck
God Bless

TEST 1: MULTIPLE CHOICE. Write The Letter of The Best Answer in The Answer

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TEST 1: MULTIPLE CHOICE. Write The Letter of The Best Answer in The Answer

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COLLEGE OF ACCOUNTANCY

FINANCIAL ACCOUNTING & REPORTING PART 2

6. The capital balances of partners Bee and Cee are as follows:

7. The capital balances of partners Bee and Cee are as follows:

8. Bee and Cee agreed to share the partnership’s profit as follows:

A. P360,000; P240,000 and P0

DATA FOR THE NEXT 5 QUESTIONS

Cash Non – Payable Bee Bee, Cee, Dee,

The partners have the following profit and loss agreement

a) All partners shall have a monthly salary of P2,000.

22. The adjusted total partnership assets would be

TEST 2. PROBLEM SOLVING.

How much is the ordinary share capital and share premium?

After Bee’s retirement, what is the balance of Cee’s capital account?

After Bee’s retirement, what is the balance of Dee’s capital account?

TEST 3. TRUE OR FALSE. ( 1 POINT EACH)

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