ee Partnership Partnership Formation: a On December 1, 2015, EE and FF formed a parinership, agreeing to share for profits and losses in the ratio of 2:3, respectively. EEinvested a parcel of land that cost him P25,000. FF invested P:0,000 cash. The land was sold for P50,000 on the same date, three hours after formation of the partnership. How much should be the capital balance of EE right after formation? + a. P25,000 c. — P60,000 50,000 b. HW, . oe S (AICPA) . On March 1, 2015, ll and JJ formed a partnership with each contributing | the following assets: u JJ P300,000° P 700,000 250,000 . _ 750,000 =” 2,250,000 S22 190,000 = The building i subject to mortgage loan of P800,000, whichis to be assumed by the partnership agreement provides that !l and_JJ share profits and losses 30% and 70%, respectively. On March 1, 2015 the balance in JJ's capital account should be: gi. P3,700,000 cc. P3,050,000 b. 3,140,000 ; d. 2,900,000 (AICPA) | . The same information in Number 2, except that the mortgage loan is not : assumed by the patineship. ‘OnMarch 1, 2015 the balance in JJ's capital account should be: a. P3,700,000 cc. . P3,050,000 b. 3,140,000 d. — 2,900,000 (Adapted) As of July 1, 2015, FF and GG decided to form a partnership. Their balance sheets on this date are: FF GG Cash P 15,000 P.:_ 37,500 Accounts receivable .. 540,000 225,000 Merchandise Inventory — 202,500 Machinery and equipment 150,000" 270,000 Total P705,000. P735,000rt 135,000 240,000 accounts Payable ital 570,000 Fr, cop = GG, copital Se AIS, 705,000. * P735,000 Total SS == , i i of FF i t the ‘machinery and equipmen' - the partners oars P1000 ‘and that of Se Oe Oror Alowenee er a is s ting to P1204 ' be set up amount 9 4 count SnD pastenins provides fora profit and loss ratio and te reiintere 40% to GG. How much cash must FF invest ital interest of 60% to FF and t 1 co tie partners’ capitol balances proportionate to their profit and loss ratio? 1. 142,500 c. _P172,500. B 52500 d, 102,500 (Adapted) | On August 1, AA and BB pooled their assets to form a partnership, with the fam to take over their business assets and assume the liabilities. Partners capitals are to be based on net ‘assets transferred after the following €djustments. (Profit and loss are allocated equally.) BB's. inventory is to be increased by P4,000; an allowance for doubtt accounis of P1,000 and P1 “500 are to be set up in the books of AA Shab tapectively: and accounis payable of P4,000 is to be recognized in AA's books. The individual trial balances on Augusi 1, before adjustments, follow: AA BB Assets Ta a Liabilities .. oe PI son What is the capital of AA and BB after the above adjustments? a. AA,P68,750; BB, P77,250 b. AA.P75,/000; BB, P8t.000 acne Pes Peo. BR, PaT.000 » CC admits a DD as ¢ partner i ‘ November 30, Partner in business. Acc: is lances, 32" 2015, just before the ‘acimision ef Bung ledger for EC on Y followinge-—‘—P-_ Partnership __- itis agreed that for purposes of establishing CC's interest, the following adjustments shall be made: (2) An allowance for doubttul- accounts of 3% of accounts receivable is to be established. (b) The merchandise inventory is to be valued at P23,000. [c) Prepaid salary expenses of P600 and accrued rent expense of P800 are to be recognized. DD is to invest sufficient cash to obtain a 1/3 interest in the partnership. Compute for: (1) CC's adjusted capital before the admission of DD: and (2) the amount of cash investment by DD: a. (1) P35,347; (2) P11,971 ec. (1) P35,374; (2) P17.687 b. (1) 36,374; (2) 18.487 d. (1) 28.174: (2) 14.087 (Adapted) 7. MM, NN, ond ©0 are partners with capital balances on December 31. 2015 of 300,000, 300,000 and P200,000, respectively. Profits are shared equally. OO wishes to withdraw andit is ogreed that OO is to take certain equipment with second-hand value of P50,000 and a note for the balance Gf OO's interest, The equipment are carried on the books at Pé5,000. Brand new equipment moy cost P80,000. Compute fer: (1] CO's acauisition of jhe seconé-hand equipment will result to reduction in capital; (2) the value of the note that will OO get from the partnership's liquidetion. a. (1) P15,000 each for MM and NN, (2) P150.000. b. (1) P5,000 each for MM, NN and OO, (2) P145,000. c. (1) P5,000 each for MM, NN and OO, (2) P195,000. d. (1) P7,500 each for MM and NN, (2) P145.000. (Adapted) 8, Jones and Smith formed a partnership with each pariner contributing the following items: lones ‘Smith P.80,000 P 40,000 Cash Building - cost to Jones 300,000 - fair valve .. . 400,000 Inventory - cost to Smith 200,000 - fair value on 280,000 Mortgage payable 60,000 Accounts payableChapter __ \d Smith agree to share equally in + fax purposes Jones and Smit h hea for immed by the Jones and Smith paftnerstip. What is the ig nesianer's capital account for financial accounting balance in each purposes? Jones’ Smith A. P350,000 270,000 B. 260,000 P180, C. + P360,000 260,000 D. _ P500,000 P300, a. OptionA © “ec. Option C b. OptionB d. Option D 9. The business assets of Ll and MM appear below: tL MM _t_ _=*_ P 11,000 P 22,354 1,536 567,890 120,035 260,102 603,000 = = 428,267 50,345 34,789 2,000 3,600 Other assets .. Total ... Accounts payable P 178,940 P 243,650 200,000 345,000 = _728382 P1,020,916 —P1,317,002 LL and MM agreed to form a partnership by contributing their respective assets and equities subject to the following adjustments: Accounts receivable of P20,000in L's books and P35,000 in MM's are uncollectible. " b. Inventories of P5,500 and P6,700 are worthless in LL's and MM's respective books. ¢. Other assets of P2,000 and P3,00 in LL's and MM's respective books are to be written off. a.Partnership un The capital.account of the partners after the adjustments will be: a. LL 615,94 M.P717,894 c. LL, P640,876; MM, P683,050 b. LL, P640,87. M,P712.345 d. LL, P614,476; MM, P683,052 (PhiICPA) 10, The sdme information ’in, Number 9, how much total assets does the i partnership have after formation? a. P2,337,918 cc. P2,265,118 b. 2,237,918 d. 2,365,218 (PhiICPA) On March 1, 2015; PP and @Q decide to combine their businesses and form a partnership. Their balange sheets on March 1, before adjustments, showed the-following: PP P 9,000 18,500 inventories . 30,000 Furniture and fixtures (net) 30,000 Office equipment (net) 11,500 Prepaid expenses 6375, Total .. P105,375 Accounts payable P 45,750 Capital 59,625 Total . P105,37: They agreed to have the following items tecorded in their books: 1. . Provide 2% allowance for doubtful accounts. 2) PP's furniture and fixtures should be P31,000, while QQ's office equipment is under-depreciated by P250. 3. Rent expense incurred previously by PP was not yet recorded amounting to P1,000, while salary expense incurred by QQ was not also recorded amounting to P800. 4. The fair market value of inventory amounted to: For PP... For QQ... 29,500 21,000i. . > Chapter Compute the net (debit) credit adjustment for PP and Qa: PP aa PP aa a. P2870 P2820 c. P(870) P 180 b. (2870) (2,820) d. 870 (180) . (Adapted) 12. The same information in Number 11, compute the total liabilities after formation: a. 61,950 c. P65,550 b. 63750 d. 63,950 13, The same information in Number 11,-compute the total assets after formation: a. P1S7.985 cc. P160,765 b. 156875 d. 152.985 14, On April-30, 2015, XX, YY and ZZ formed a partnership by combining their separate business proprietorships. XX contributed cash of P75,000. YY contributed property with a P54,000 carrying amount, a P60,000 original cost, and P120,000 fair value. The partnership accepted responsibility for the P52,500 mortgage attached to the property. ZZ contiibuted equipment with a P45,000 carrying amount, a P112,500 original cost, and P82,500 fair valve. The partnership agreement specifies that profits and losses are to be shored equally but is silent regarding capital contributions. Which partner has the largest April 30, 2015, capital balance? a x c 2 bY d. Allcapital account balances are equal (AICPA) Partnership Operations: 15, JJ and Kk are partners who share profits and losses in the ratio of 60%: 4 respectively. JJ's salary is P60,000 and P30,000 for KK. The partners ‘reas pail interest on theit average capital balances: in 2015, J. received P30,000 Stren seg ANd KK. P12,000. The profi! and loss allocation is determined fescoen re met forthe say ond Bless payments. If KK’s share in the i leducting salari ir 12015, what was the folal partnershipyncomee a ry erestl was P60.000 a. P192,000 eae es (Adapted)