1.

When a newly admitted partner pays a bonus to the existing partners, the new partner's capital account
is debited to record bonus to old partners.
2. Partnership dissolution is synonymous with partnership liquidation.
3. Partner Lagrimas has a P15,000 credit balance in her capital account in the firm of Lagrimas and
Villon. If Ballado purchased Lagrimas' equity interest in the firm for P20,000, the entry on the partnership
books to record the transfer would credit Ballado's capital account for P20,000.
4. The dissolution of the partnership discharges the existing liability of any partner.
5. A new partner cannot be admitted into a partnership without the consent of all the partners.
6. When a new partner invests more than the proportionate share he receives in the partnership, a bonus is
recorded to his account.
7. There is no impact on the statement of comprehensive income of a partnership when a partner
withdraws from the business.
8. Total contributed capital is the sum of the capital balances of the old partners and the actual investment
of the new partner. It should always equal the new partnership capital.
9. The assets invested into the partnership and not given to the individual partners increase the total assets
of the partnership.
10. When a partner withdraws from a partnership, an audit might be performed and the assets reappraised.
11. The admission of a partner does not change the composition of partners' equity if the new partner
purchases the old partner's interest by paying the old partner directly.
12. Capital credit is the equity of a partner in the new partnership and is obtained by multiplying the total
agreed capital by the corresponding percentage interest of the partner.
13. A partnership may be dissolved without being liquidated.
1. When a partner leaves a partnership, it is possible that total assets will be unaffected.
2. When new partners invest more than the equity interest they are to receive in the net assets of an
existing partnership, part of the entry to record the new partners investments is an increase in the capital
accounts of the old partners.
3. When a new partner is given 30% interest in a partnership, he will receive 30% of all future profits and
losses.
4. In admission by purchase, payment is personally made to the partner from whom the interest is
obtained resulting to mere transfers among capital accounts.
5. The dissolution of a partnership is the same as the liquidation of a partnership.
6. Goodwill is the amount of capital or equity transferred by one partner to another partner.
7. When Yolanda Garcesa purchased Esperanza Nolasco's P200,000 capital interest for P200,000, the
ensuing entry on the books of the partnership would contain a debit to cash for P200,000.
8. It is possible to invest assets into a partnership and be given a zero capital balance.
9. A partnership may be dissolved at any time by any of the partners.
10. The withdrawal of a partner from a partnership is a type of dissolution.
11. A new partner must have the consent of all the partners before being admitted into the partnership.
12. When a partner withdraws assets greater than his capital balance, the excess is treated as a bonus to
the remaining partners.
13. When a partner withdraws from a partnership and the value of the assets paid to the partner by the
partnership is greater than the balance in his capital account, the partnership is, in effect, paying the
withdrawing partner a bonus.
14. When the existing partners pay a bonus to a newly admitted partner, the existing
partners' accounts are debited.
15. When a bonus is allowed to a new partner, part of the entry to record his admission to a business
reduces the capital accounts of the old partners.
16. A person admitted as a partner into an existing partnership is liable for obligations of the partnership
contracted before his admission.
17. Joel Wanagen purchased directly from Vangie Buenaventura her P30,000 partnership interest for
P50,000. The entry to record the transaction is for P30,000.
18. A partnership is dissolved when a new partner is admitted to the partnership.
19. The retirement of a partner by payment from partnership assets may cause the other partners' capital
accounts to decrease.
20. Edward Santos directly purchased Ferdinand Romero's P250,000 partnership interest for P300,000.
The entry to record the transaction is for P300,000.
21. It is possible to invest no tangible assets into a partnership, yet be given a positive opening capital
balance.
22. A partner who withdraws from a partnership is always entitled to the balance in his capital account.
23. In admission by investment, the bonus method is used when the total agreed capital is more than the
total contributed capital.
24. On dissolution, the partnership is not terminated but continues until winding up of partnership affairs
is completed.
25. If a partner withdraws by selling his equity interest to the partnership in exchange for an amount
greater than the balance in his capital account. the excess payment, will be treated as a bonus to the
continuing partners.
1. Perez and Daganta are partners who share profits and losses in a ratio of 2:1 and have capital balances
of P750,000 and P1,500,000, respectively. The partners agreed to admit Barros to the partnership. Barros
invested P750,000 for a 35% interest in the partnership. The new total capital balance after admitting
Barros is. P3,000,000. Daganta's capital balance after Barros is admitted is
a. P1,600,000.
b. P1,500,000.
c. P1,400,000
d. P1,350,000.
2. Tolentino invested P400,000 for a 20% interest in a partnership that has capital totaling P150,000 after
admitting Tolentino. Which of the following is true?
a. Tolentino's capital is P400,000.
b. Tolentino received a bonus of P100,000.
C. The original partners received a bonus of P100,000.
d. The original partners' capital in the business was P1,200,000 before admitting Tolentino.
3. If a bonus is traceable to the old partners rather than to a new partner, it is allocated among the partners
according to the
a. capital ratio of the old partners.
b. capital ratio of the new partnership.
C. profit and loss ratio of the old partnership.
d. profit and loss ratio of the new partnership.
4. Marasigan, Cabance, and Tan are in a partnership. Tan decides she wants to withdraw from the
partnership by selling her interest to Blanche. Marasigan and Cabance agree to this. Marasigan's and
Cabance's capital accounts
a. will not be affected when Blanche is admitted.
b. cannot be determined from the information given.
c. will increase when Blanche is admitted.
d. will decrease when Blanche is admitted.

5. Which of the following will not result in dissolution of a partnership?

a. Incapacity of a partner
b. Negative capital balance of a partner
c. Bankruptcy of a partner
d. Admission of a new partner
6. Garachico invested P100,000 for a one-third interest in a partnership in which the other partners have
capital totaling P260,000 before admitting Garachico. After distribution of the bonus, what is Garachico's
capital?
a. P53,330
b. P86,670
c. P100,000
d. P120,000
7. Which of the following results in the dissolution of a partnership?
a. The withdrawal of a partner from a partnership.
b. The receipt of share in profit by an existing partner.
c. The contribution of additional assets to the partnership by an existing partner.
d. The winding up of the partnership and the distribution of remaining assets to the partners.
8. The admission of a new partner under the bonus method will result in
a. bonus to the old partners only.
b. bonus to the new partner only.
C. bonus to either the new partner or the old partners, but not both.
d. none of the above.
9. A partnership agreement most likely will stipulate that assets be reappraised when
a. the partnership is liquidated.
b. a partner leaves the partnership.
C. profits and losses are being distributed.
d. new partner is admitted to the partnership.

10. Which of the following best characterizes the bonus method of recording a new partner's investment
in a partnership?
a. Net assets of the old partnership are not revalued.
b. The new partner's initial capital balance is equal to his investment.
C. The bonus always results in an increase to the old partners' capital balances.
d. Assuming that recorded assets are properly valued, the book value of the new partnership is equal to
the book value of the old partnership and the investment of the new partner.
11. Partners Chung, Detoya, and Digao share profits and losses in a 3:1:2 ratio, respectively. Detoya
wishes to leave the partnership, so the assets are revalued and are found to be overvalued by P300,000. If
each partner had a capital balance of P500,000 prior to Detoya's notification of withdrawal, what amount
should Detoya be allowed to withdraw from the partnership?
a. P400,000
b. P450,000
C. P500,000
d. P550,000
12. Villon invested P600,000 for a 30% interest in a partnership in which the other partners have capital
totaling P1,000,000 before admitting Villon. After distribution of the bonus, what is Villon's capital
balance?
a. P720,000
b. P600,000
c. P480,000
d. P300,000
13. Total partners' equity will not change when a withdrawing partner
a. withdraws assets equal to his capital balance.
b. sells his interest to a new or remaining partner.
c. withdraws assets amounting to less than his capital balance.
d. withdraws assets amounting to greater than his capital balance.

14. Narvaez invested P400,000 for a one-fourth interest in a partnership in which the other partners have
capital totaling P800,000 before admitting Narvaez. After distribution of the bonus, what is Narvaez's
capital balance?
a. P100,000
b. P200,000
C. P300,000
d. P400,000
15. Dellosa bought Longalong's interest in the Seechua and Longalong Partnership by a P600,000 direct
payment to Longalong. The capital balances before the sale were P240,000 and P360,000, respectively.
What will be the amount in Dellosa's Capital account?
a. P300,000
b. P360,000
C. P480,000
d. P600,000
16. Partners Yacapin, Babaran, and Cuenca share profits and losses in a 5:3:2 ratio, respectively. Yacapin
wishes to leave the partnership, so the assets are revalued and are found to be overvalued by P60,000. If
each partner had a capital balance of P200,000 prior to Yacapin's notification of withdrawal, what amount
should Yacapin be allowed to withdraw from the partnership?
a. P230,000
b. P180,000
C. P170,000
d. P140,000
17. When a partner withdraws from a partnership taking assets that represent less than his capital balance,
a. no bonus results.
b. the remaining partners receive a bonus.
c. the withdrawing partner receives a bonus.
d. the remaining partners owe the withdrawing partner the difference.

18. Perdio paid Tria P600,000 for her P400,000 interest in a partnership. On the partnership books,
a. Perdio will receive a bonus.
b. Perdio will give up a bonus.
C. Perdio will have a capital balance of P600,000.
d. Perdio will have a capital balance of P400,000.
19. Mulles invested P600,000 for a one-fifth interest in a partnership in which the other partners have
capital totaling P1,200,000 before admitting Mulles. After distribution of the bonus, Mulles' capital is
a. P240,000.
b. P360,000.
C. P480,000.
d. P600,000.
20. Pascual invested P400,000 for a 10% interest in a partnership that has total capital of P3,000,000 after
admitting Pascual. Which of the following is true?
a. Pascual's capital is P260,000.
b. Pascual received a bonus of P100,000.
C. The original partners received a bonus of P100,000.
d. The original partners' capital in the business was P2,700,000 before admitting
Pascual.

Bernal and Ruiz are partners who share profits and losses in a ratio of 3:2, respectively, and have the
following capital balances on Dec. 31, 2018: Bernal, Capital, P2,000,000 Cr. and Ruiz, Capital,
P1,500,000 Cr.
1. Assume that the partners agreed to let Gogola into the partnership by investing P1,000,000 for a one-
fifth interest. Gogola's capital balance will be
a. P700,000.
b. P1,000,000.
c. P900,000.
d. P800,000.
2. Assume that the partners agreed to let Gogola into the partnership by investing P1,000,000 for a one-
fourth interest. Gogola's capital balance will be
a. P750,000.
b. P875,000.
c. P1,000,000.
d. P1,125,000.
3. Assume that the partners agreed to let Gogola into the partnership by investingP1,000,000 for a one-
fourth interest. Bernal's capital balance will be
a. P2,075,000.
b. P2,062,500.
C. P1,937,500.
d. P1,925,000.
4. Assume that the partners agreed to let Gogola into the partnership by investing P2,000,000 for a one-
fourth interest. Gogola's capital balance will be
a. P1,375,000.
b. P2,000,000
C. P875,000.
d. P1,625,000.
5. Assume that the partners agreed to let Gogola into the partnership by investing P1,000,000 for a one-
fourth interest. Ruiz's capital balance will be
a. P1,562,500.
b. P1,550,000.
c. P1,437,500.
d. P1,450,000.

1. The following is the condensed statement of financial position of the partnership of Ricablanca, Tac-
an, and Andres who share profits and losses in the ratio of 4:3:3:
Assume that the assets and liabilities are fairly valued on the statement of financial position and the
partnership decides to admit Leon as a new partner, with a 20% interest. No goodwill or bonus is to be
recorded. How much cash must Leon contribute?
a. P280,000
b. P284,000
C. P350,000
d. P355,000
2. On June 30, 2018, the statement of financial position for the partnership of Villon, Obrero and Bernal,
together with their respective profit and loss ratio, were as follows:
Villon had decided to retire from the partnership. By mutual agreement, the assets are to be adjusted to
their fair value of P216,000 at June 30, 2018. It was agreed that the partnership would pay Villon P61,200
cash for Villon's partnership interest, including Villon's loan which is to be repaid in full. No goodwill is
to be recorded. After Villon's retirement, what is the balance of Obrero's capital account?
a. P36,450
b. P39,000
C. P45,450
d. P46,200

3. Ragasa and Mendoza are partners sharing profits in the ratio of 3:2, respectively Un Jan. 1, Ragasa and
Mendoza decided to admit Gangoso as a new partner upon her investment of P8,000. On this date, their
interests in the partnership are as follows: Ragasa, P11,500; Mendoza, P9,300.
Assuming that the new partner is given a 1/3 interest in the firm, with bonus being allowed to the new
partner, the new capital balances of Ragasa, Mendoza and Gangoso respectively, would be
a. P10,540, P8,660 and P9,600.
b. P11,500, P9,300 and P8,000.
c. P11,520, P7,680 and P9,600.
d. P12,480, P8,320 and P8,000.
4. In the Ravelo-Cabance partnership, Ravelo and Cabance had a capital ratio of 3:1 and a profit and loss
ratio of 2:1, respectively. The bonus method was used to record Futalan's admission as a new partner.
What ratio should be used to allocate, to Ravelo and Cabance, the excess of Futalan's contribution over
the amount credited to Futalan's capital account?
a. Ravelo and Cabance's old capital ratio.
b. Ravelo and Cabance's new relative capital ratio.
C. Ravelo and Cabance's old profit and loss ratio.
d. Ravelo and Cabance's new relative profit and loss ratio.
Sunglao and Gadia are partners who have agreed to admit Claudio-Ty, who will invest P150,000 for a
20% interest. The previous capital balances were P150,000 and P300,000 for Sunglao and Gadia,
respectively. Sunglao and Gadia shared profits and losses equally.
5. What amount will be recorded in Claudio-Ty's Capital account?
a. P60,000 credit
b. P90,000 credit
c. P120,000 credit
d. P150,000 credit
6. What is Sunglao's Capital account balance after admitting Claudio-Ty?
a. P180,000 credit balance
b. P165,000 credit balance
c. P135,000 credit balance
d. P120,000 credit balance
7. On June 30, 2018, the statement of financial position of Meycauayan Marketing, a partnership, is
summarized as follows:
Orosco and De Guzman share profit and losses at a 6:4 ratio, respectively. They agreed to take in Gener
Castillo as a new partner, who purchased 1/8 interest of Orosco and De Guzman for P100,000. What is
the amount of Gener Castillo's capital to be taken up in the partnership books if the book value method is
used?
a. P75,000
b. P50,000
C. P100,000
d. P125,000
8. The capital accounts of the partnership of Cebedo, Esparaguera, and Chanjueco on June 1, 2018 are
presented below with their respective profit and loss ratio:
On June 1, 2018, Dela Calzada is admitted to the partnership when he purchased, for P132,000, a
proportionate interest from Cebedo and Chanjueco in the net assets and profits of the partnership. As a
result, Dela Calzada acquired a one-fifth interest in the net assets and profits of the firm. Assuming that
implied goodwill is not to be recorded, what is the combined gain realized by Cebedo and Chanjueco
upon the sale of a portion of their interest in the partnership to Dela Calzada?
a. P 0
b. P43,200
C. P62,400
d. P82,000
1. Carlos and Dimatulac are partners who share profits and losses in the ratio of 7:3, respectively. On Oct.
5, 2018, their respective capital accounts were as follows:
On that date, they agreed to admit Lagdameo as a partner with a one-third interest in the capital and
profits and losses, and upon her investment of P25,000. The new partner will begin with a total capital of
P90,000. Immediately after Lagdameo's admission, what are the capital balances of Carlos, Dimatulac,
and Lagdameo, respectively?
a. P30,000; P30,000; P30,000
b. P31,667; P28,333; P30,000
C. P35,000; P30,000; P25,000
d. P31,500; P28,500; P30,000
2. Salvador and Cureg are partners with capital balances of P60,000 and P20,000, respectively. Profits
and losses are divided in the ratio of 60:40. Salvador and Cureg decided to form a new partnership with
Lusterio, who invested land valued at P15,000 for a 20% capital interest in the new partnership. Lusterio's
cost of the land was P12,000. The partnership used the bonus method to record the admission of Lusterio
into the partnership. Lusterio's capital account should be credited for
a. P12,000.
b. P15,000.
C. P16,000.
d. P19,000.
3. When Rivera retired from the partnership of Rivera, Nolasco, and Andres, the final settlement of
Rivera's interest exceeded Rivera's capital balance. They share profits and losses equally. Under the bonus
method, the excess
a. had no effect on the capital balances of Nolasco and Andres.
b. reduced the capital balances of Nolasco and Andres.
C. was recorded as goodwill.
d. was recorded as expense.
4. Partners Arias, Bobadilla and Briones share profits and losses 50:30:20, respectively. The statement of
financial position at April 30, 2018 follows:
The assets and liabilities are recorded and presented at their respective fair values. Banzon 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 goodwill or bonus is to be recorded. How much cash should Banzon
contribute?
a. P60,000
b. P72,000
C. P75,000
d. P80,000

5. The capital account for the partnership of Saliut and Molina at Oct. 31, 2018 follows:
The partners share profits and losses in the ratio of 6:4, respectively. The partnership is in desperate need
of cash, and the partners agreed to admit Buenaflor as a partner with one-third in the capital and profits
and losses upon her investment of P30,000. Immediately after Buenaflor's admission, what should be the
capital balances of Saliut, Molina and Buenaflor, respectively, assuming goodwill is not to be recognized?
a. P50,000; P50,000; P50,000
b. P68,000; P32,000; P50,000
C. P60,000; P60,000; P60,000
d. P66,667; P33,333; P50,000
6. When Cabulay retired from Cabulay, De Chavez and Kwong, he received cash in excess of his capital
account balance. Under the bonus method, the excess received by Cabulay
a. had no effect on the capital account balances of De Chavez and Kwong.
b. reduced the capital account balances of De Chavez and Kwong.
c. was recognized as goodwill of the partnership.
d. was recognized as an operating expense of the partnership.
7. Partners Salvador, Garcia and Mutuc divide profits and losses 5:3:2, respectively and their statement of
financial position on Sept. 30, 2018 follows:
The assets and liabilities are recorded at their approximate current fair values. Tuazon is to be admitted as
a new partner with a 20% interest in capital and earnings in exchange for a cash investment. Goodwill or
bonus will not be considered. How much cash should Tuazon contribute?
a. P150,000
b. P144,000
C. P120,000
d. P160,000
8. Partners Cammayo and Tac-an share profits and losses in the ratio 7:3, respectively. On Feb. 1, 2018,
their capital account balances were as follows:
Cammayo and Tac-an agreed to admit Hernandez as a partner with a one-third interest in the partnership
capital and profits or losses for an investment of P50,000. The new partnership will begin with total
capital of P180,000. Immediately after Hernandez's admission to the partnership, the capital account
balances of Cammayo, Tac-an, and Hernandez, respectively, are
a. P63,000, P57,000, P60,000.
b. P60,000, P60,000, P60,000.
C. P63,333, P56,667, P60,000.
d. P70,000, P60,000, P50,000.
e. Some other amount