1.

Cash 2,600
AR 12,000
Allow. for bad debts (240)
Mer. Inv 20,200
Prepaid exp. 350

Accrued expenses 400

AP 6,200
Melai Capital 28,310

Melai’s Capital 28,310

Nora capital (35,387.50 x 1/5) 7,077.50
Total (28,310 / 4/50 P35,387.50
Nora capital 7,077.50
Less equipment 4,500
Total capital P2,577.50
2. B

Joe Pete Total

Cash 620,000 800,000 1,420,000
Uncollectible accounts (20,000) (40,000) (60,000)
Inventories (6,000) (7,000) (13,000)
Other assets written off (2,000) (3,000) (5,000)
Capital balance 592,000 750,000 1,342,000

Joe (1,342,000 x 40%) 536,800

Pete (1,342,000 x 60%) 805,200

Bonus from joe (536,800 – 592,000) (P55,200)

3. A

Aldrin Benny Carlo

Cash 50,000 80,000 25,000
Computer 25,000 60,000
Total P75,000 P80,000 P85,000
4. C

Mark Dwayne
Net assets 59,625 33,500
Less:
Allow. for doubtful accounts (555) (405)
Furniture and fixtures (900)
Total capital P59,070 P32,195

5. B

Kathy Nathan
Cash 116,000 56,000
Office equipment 84,000
Land and building 250,000
Mortgage payable (232,000)
Total P200,000 P74,000
6. The answer is E because, under the bonus method capital or intangible assets is the only required to
be contributed. Unless the partners allow the other partner to contribute identifiable assets.

7. A

Gee Han Total

Salaries 120,000 120,000
Bonus (320K – 120K x 10%) 20,000 20,000
Interest (160k x 10%) 16,000
(80k x 10%) 8,000 24,000
Remaining balance (first year) 93,600 62,400 156,000
P249,600 P70,400 P320,000

Gee Han Total

Salaries 120,000 120,000
Bonus (200K – 120K x 10%) 8,000 8,000
Interest (160k + 249,600 x 10%) 40,960
(80k + 70.4k x 10%) 15,040 56,000
Remaining balance (second year) 8,000 8,000 16,000
P176,960 P23,040 P200,000

8. B
 Capital Months Total
January 1 38,000 3 114,000
April 1 33,000 4 132,000
July 31 43,000 2 86,000
September 30 48,000 2 96,000
December 01 52,000 1 52,000
December 31 52,000 0 -
Total 480,000

Capital Months Total

January 1 15,000 5 75,000
June 1 25,000 3 75,000
September 1 22,000 1 22,000
October 1 21,000 2 42,000
November 26,000 1 26,000
December 31 26,000 0
Total 240,000

Dada average capital (480,000/12) P40,000

Mama average capital (240,000/12) P20,000
Dada Mama Total
Salaries 12,000 24,000 36,000
Interest (40k x 5%) 2,000
(20k x 5%) 1,000 3,000
Bonus (61,000 x 20%) 12,200
Balance (40:20) 32,533.33 16,266.67 48,800
Net income P58,733.33 P41,266.67 P100,000

9. B

Batman Superman Total

Salaries 40,000 60,000 100,000
Interest (200k x 10%) 20,000
(240k x 10%) 24,000 44,000
Balance equally 48,000 48,000 96,000
Total P108,000 P132,000 P200,000

10. B
 Lim Isko Total
Salaries 30,000 60,000 90,000
Interest 60,000 90,000 150,000
(120,000) (180,000) (300,000)
P(30,000) P(30,000) (60,000)

11. A

Mark Luke John Total

Capital 840,000 1,260,000 1,890,000 3,990,000
Additional investment 210,000 210,000
Withdrawal (315,000) (315,000)
Net income 234,500 238,700 261,800 735,000
Regular drawings (105,000) (105,000) (105,000) (315,000)
Balances, dec 1,179,500 1,393,700 1,731,800 4,305,000

Mark Luke John Total

Salaries 126,000 105,000 84,000 315,000
Interest 75,600 100,800 144,900 321,300
Total 201,600 205,800 228,900 636,300
Balance divided equally 32,900 32,900 32,900 98,700
Total 234,500 238,700 261,800 735,000

Mark (840k x 8% x 6/12) + (1,050,000 x 8% x 6/12) 75,600

Luke (1,260,000 x 8%) 100,800
John (1,890,000 x 8% x 9/12) + (1,575,000 x 8% x 3/12) 144,900
Total P321,300

12. C

A B Total
Salaries 15,000 30,000 45,000
Interest 9,000 6,000 15,000
Bonus 5,000 5,000
Balance equally (7,500) (7,500) (15,000)
Total 21,500 28,500 50,000

13.
14.

15. A

Total agreed capital (480,000 + 520,000 / 2x3) 1,500,000

Bubble interest 30%
Total P450,000

16. C
Total agreed capital 2,500,000
Blaire interest 30%
Total P750,000
Balance equally
Ali (480,000+375,000) P855,000
Charish (520,000 + 375,000) P895,000

17. A

Capital Revaluation Agreed capital Princess Remaining

Aika 800,000 126,000 926,000 308,667 617,333
Nicole 480,000 54,000 534,000 178,000 356,000
1,280,000 180,000 1,460,000 486,667

18. C

Capital
Mark (420k x6/12) 448,000 238,000 (210,000)
Dave (420k x 4/12) 1560,000 1,420,000 (140,000)
Jim (420k x 2/12) 680,000 610,000 (70,000)
Jaime 420,000 (420,000)
Total 2,688,000 2,688,000

19. B

January June July Total

Capital balances 30,000 50,000 30,000 110,000
Loss on assets
(50k – 140+5k) (47,500) (28,500) (19,000) (95,000)
Loan 20,000 (10,000) (10,000)
 Total 2,500 21,500 1,000 25,000

Cash available

Balance 50,000

Add: sale of asset 50,000

Less: Liquidation expenses (5,000)

Less: Liabilities (70,000

)

Net cash available for distribution 25,000

20.

21. B

January
Outstanding recorded liabilities 40,000
Payment of liability (40K x 40%)  (16,000)
Unpaid recorded liability for the current month 24,000
Add: Cash withheld   2,500
Cash withheld for the current month 26,500

February
Outstanding recorded liabilities 24,000
Payment of liability       (10,000)
Unpaid recorder liability for the current month 14,000
Add: cash withheld   2,000
Add: cash withheld for the unrecorded liability   2,750
Cash withheld for the current month 18,750

March
Outstanding recorded liabilities 14,000
Payment of liability          (14,000)
Unpaid recorded liability for the current month   -

January February March

Cash Beginning 20,000 26,500 18,750
Proceeds 30,000 12,000 12,500
Liabilities Paid (16,000) (10,000) (16,000)
Liquidation Expenses (5,000) (2,750) (5,500)
Cash Withheld (26,500) (18,750)                
Cash Available 2,500   7,000 P9,750
22.

23. C

Gio Van Annie

Capital balances 98,000 175,000 1750,000
Loss on Inventory (40k) (16,000) (16,000) (8,000)
Plant assets (280k) (112,000) (112,000) (56,000)
Remaining balances (30,000) 47,000 51,000
Eliminate deficit balance 30,000 (20,000) (10,000)
Total balances P0 P27,000 P41,000

24. B

Lady Clarinel Jigs

Capital 168,000 270,000 62,000
Loss on other assets (225k) (45,000) (67,500) (112,500)
Contingent expense (12k) (2,400) (3,600) (6,000)
Total 120,600 198,900 (56,500)
Eliminate jigs balance (22,600) (33,900) (56,500)
Total P98,000 P165,000 P0

25. D
Capital balances 1,392,000
Liabilities 720,000
Total 2,112,000
Less: Cash (320,000)
Non cash asset 1,792,000
Less: loss on realization (248,000)
Total P1,544,000