1.

Which of the following best characterizes the bonus method of recording a new partner’s
investment in a partnership?
Assuming that recorded assets are properly valued, the book value of the new
partner is equal to the book value of the previous partnership and the investment
of the new partner.

2. B and N are partners sharing profits and losses in the ratio 7:3. On January 1,2013 their
credit balance capital accounts are P30,000 for B and P20,000 for N, W is to be admitted as
a partner by buying 50% of B’s interest for P20,000.
The capital balance of B after W’s admission is
P15,000

3. Mike and Tess are partners with capital balances of P70,000 and P50,000 respectively.
They share profits and losses in the ratio of 3:1, respectively. Voce is to be admitted in the
partnership for a cash contribution of P60,000 for a ½ interest in the partnership capital and
in future profits and losses.
If Voce would be given a capital credit of P90,000, how much would be charged to Mike’s
capital account?
P15,000

4. Partner’s Nitz, Pat and Candy share profits and losses 50:30:20 respectively. Capital
balances are P74,000 P130,000 and P96,000 respectively. The carrying values of assets
and liabilities are equal to their fair values. Emmie is to be admitted as a new partner with a
20% capital interest and a 20% share of profits and losses in exchange for a cash
contribution. No bonus is to be effected.
How much should Emmie contribute?
P75,000

5. J decided to withdraw from the JOY Partnership. A cash settlement was made by the
partnership this will
Decrease Assets

6. The partnership of Noynoy, Manny and Gibo have capital balances as follows: Noynoy -
P35,000, Manny - P50,000, Gibo - P40,000. Their profit and loss ratio are 30% 50% and
20% respectively, With the consent of Noynoy and Manny, Gibo sold one-half of his interest
to Erap for P30,000 , Gibo was paid in cash by Erap What is the Capital Balance of Manny
after the admission of Erap to the partnership?
P50,000

7. An adjustment of the assets and liabilities of the partnership to their fair market values
before dissolution is called
Asset revaluation