C Limitedpartner

FINANCIALACCOUNTINGANDREPORTING-
PARTNERSHIP(QUESTIONNAIRE/REVIEWER)
CHAPTER1:PARTNERSHIPFORMATION
1.A partnerwhoseliabilityforpartnership debtsislimited to
hiscapitalcontribution to the
partnershipiscalleda_______
A.Generalpartner
B.Secretpartner
C.Limitedpartner
D.Dormantpartner
2.Apartnerwhocontributesmoneyorpropertytothecapitalofthepartnershipiscal
led_______
A.Industrialpartner
B.Capitalistpartner
C.Nominalpartner
D.Ostensiblepartner
3.Apartnerwhoseconnectionwiththepartnershipisopenandpublicsothathisna
meisincludedin
thefirm nameofthepartnershipiscalled______
A.Nominalpartner
B.Ostensiblepartner
C.Dormantpartner
D.Secretpartner
4.Apartnerwhocontributeshisworkorlabortothecommonfundofthepartnershipi
scalled
_________
A.Industrialpartner
B.Capitalistpartner
C.Managingpartner
D.Nominalpartner
5.Apartnerwhohasnovoiceorparticipationinthemanagementoftheaffairsofthe
partnershipis
called_________
A.Dormantpartner
B.Silentpartner
C.Secretpartner
D.Nominalpartner
6.Apartnerwhotakeschargeofthewindingupofthepartnershipaffairsupondissol
utioniscalled
_______
A.Ostensiblepartner
B.Silentpartner
C.Limitedpartner
D.Liquidatingpartner
7.Apartnerwhoisnotactuallyapartnerbutwhobyhisacts,ismadeliableasapartne
rtothethird
personsforthepartnershipobligationiscalled________
A.Nominalpartner
B.Dormantpartner
C.Secretpartner
D.Limitedpartner
8.Generalpartnersareliableforpartnershipdebtstotheextentoftheirseparatepr
opertyafterallthe
partnershipassetshavebeenexhausted.Akindofpartnershipwhereallthepartn
ersaregeneral
partnersiscalled_________
A.Universalpartnership
B.Limitedpartnership
C.Generalpartnership
D.Particularpartnership
9.Apartnershipcontractisperfectedbymereconsentwhichmakesit_______
A.Onerous
B.Nominate
C.Consensual
D.Bilateral
10.Apartnershipcontracthasaspecialdesignationinlaw,whichmakesit______
_
A.Onerous
B.Nominate
C.Bilateral
D.Preparatory
11.Theagreementofthepartnersembodiedinapublicinstrumentiscalled_____
___
A.Articlesofco-partnership
B.Articlesofincorporation
C.By-laws
D.Noneoftheabove
12.Tobeapartner,amemberhastocontributemoney,property,orindustrytothep
artnership.This
makesthepartnershipagreement_________
A.Bilateral
B.Nominate
C.Onerous
D.Preparatory
13.Whatistheappropriatemeasurementbasisforanon-cashassetcontributed
byapartnerina
partnership?
A.Assessedvaluationoftheassetforpropertytaxpurposes
B.Originalpurchasepriceoftheassetbasedontherecordofthecontributingpartn
er
C.Contributingpartner'staxbasisfortheasset
D.Fairvalueoftheassetatthedateofcontribution
14.Whichofthefollowingwouldnotbeconsideredacharacteristicofapartnership
?
A.Co-ownershipofproperty
B.Mutualagency
C.Unlimitedliability
D.Unlimitedlife
15.Whichofthefollowingwouldnotbeconsideredanadvantageofformingapartn
ership?
A.Apartnershiphasunlimitedliability
B.Apartnershipiseasilyformed
C.Apartnershipisrelativelyfreefrom governmentalregulationsandrestrictions
D.Skillsandresourcescanbecombined
16.Theassetscontributedbypartnersinthepartnershipbecomethecommonpro
pertyofall
partners.Thus,apartnershipischaracterizedby___________
A.Co-ownershipofproperty
B.Co-ownershipofprofit
C.Co-ownershipofallpresentproperty
D.Noneoftheabove
17.Thisisacharacteristicofapartnershipwhichmakesapartner'sactbindingforal
ltheother
partners,exceptincaseswhentheactisbeyondthescopeofpartnershipoperatio
ns.Whatisit?
A.Onerous
B.Consensual
C.Mutualagency
D.Bilateral
18.Partner'sinvestmentmayincludewhichofthefollowing?
A.Cash
B.Non-CashAssets
C.Non-CashAssetswithliabilitiestobeassumed
D.Alloftheabove
19.Whichofthefollowingcharacteristicsdoesnotapplytoageneralprofessionalp
artnership?
A.Unlimitedlife
B.Mutualagency
C.Unlimitedliability
D.Nobusinessincometax
20.Apartnershipagreementshouldincludewhichofthefollowing?
A.Eachpartner'sduties
B.Themethodofallocatingprofitsandlosses
C.Thepurposeofthebusiness
D.Alloftheabove
21.Apartnershipwhichcomprisesalltheprofitsthatthepartnersmayacquirebyth
eirworkor
industryduringtheexistenceofthepartnershipiscalled________
A.Dejurepartnership
B.Particularpartnership
C.Universalpartnershipofprofit
D.Universalpartnershipofallpresentproperty
22.Partner'scapitalaccountiscreditedinthefollowingcasesexceptwhenitinvolv
estherecording
ofthe________
A.Additionalinvestment
B.Originalinvestment
C.Shareintheprofit
D.Debitbalanceofthedrawingaccountattheendoftheperiod
23.Whichofthefollowingaccountshasanormalcreditbalance?
A.Loanstopartners
B.Partner'scapital
C.Partner'sdrawing
D.Duefrom partner
24.WhichofthefollowingitemsisNOTcollectiblefrom apartner?
A.Loansreceivablefrom partners
B.Loanstopartner
C.Loansfrom partner
D.Duefrom partner
25.Whatisthebasisofcapitalsharingifthepartnersdonothaveanagreementasto
theamountof
theirindividualcapitalcontribution?
A.Equalshare
B.Basedonprofitandlossagreement
C.Fairvalueofassetcontributed
D.Service
26.Atwhatvaluewillcashcontributionsofapartnerberecordedinthepartnershipb
ooks?
A.Futurevalueofcash
B.Purchasingvalueofcash
C.Actualamountofcash
D.Pastvalueofcash
27.Whatisthevaluationifapartnercontributesanon-
cashpropertytothepartnership?
A.Agreedvalueoftheproperty
B.Acquisitioncostoftheproperty
C.Actualamountoftheproperty
D.Fairvalueoftheproperty
28.Whatistheentryfortheacceptanceofanindustrialpartner'sskillashis/hercont
ribution?
A.Generaljournalthroughamemorandum entry
B.Generalledgerthroughdebit-creditentry
C.Generaljournalthroughdebit-creditentry
D.Generalledgerthroughamemorandum entry
29.Statement1:Thereisabonustoapartnerwhosecapitalcontributionislessthan
thecapital
creditedtohim.
Statement2:Ifoneofthepartners'capitalcreditisnotequaltotheamountofhisactu
alcapital
contribution,thereisabonustoberecognized,thatis,ifthetotalpartners'capitalco
ntributionis
equaltototalpartnershipcapital
A.Onlystatement1iscorrect
B.Onlystatement2iscorrect.
C.Bothstatementsarecorrect
D.Bothstatementsarenotcorrect
30.Forfairandhonestbusinessformationofapartnership,eachpartner'sinitialinv
estmentofnoncashassetsshouldberecordedattheir________
A.Bookvalues
B.Carryingvalues
C.Fairmarketvalues
D.Quotedvalues
31.Thedrawingaccountisdebited,exceptfor
A.Withdrawalofpartnership'sassetsbythepartner
B.Partnershipobligationsassumedorpaidbythepartnership
C.Partner'spersonalindebtednesspaidorassumedbythepartnership
D.Fundsorclaimsofpartnershipcollectedandretainedbythepartner
32.Whichofthefollowingisdebiteddirectlytocapital?
A.Permanentwithdrawal.
B.Partner'sshareinlosses
C.Partner'sshareinprofits
D.Withdrawalofassetsbythepartnerinanticipationofpartnershipprofit
33.Jackinvestedinapartnershipaparceloflandwhichcostshisfather₱200,000.T
helandhada
marketvalueof₱300,000whenJackinheriteditthreeyearsago.Currently,thelan
disindependently
appraisedat₱550,000eventhoughJackinsistedthathewouldn'ttake₱900,000f
orit.Theland
shouldberecordedintheaccountsofthepartnershipat______
A.₱300,000
B.₱900,000
C.₱550,000
D.₱200,000
34.Iftheamountofliabilitiesis₱165,000 and thepercentageofowner'sclaim in
thetotal
partnership'sassetsis45%,thepartnership'stotalassetswouldbe______
A.₱200,000
B.₱300,000
C.₱366,667
D.₱255,750
35.Ifthenetassetsofthepartnershipis250,000andthetotalpartnership'sliabilityi
s350,000,the
partnershiptotalcapitalwouldbe________
A.₱600,000
B.₱350,000
C.₱250,000
D.₱100,000
36.Ifthetotalpartnership'sassetsincreasedby12%andtotalpartners'equityincr
easedto₱260,000
andhasanoldbalanceof200,000.How muchisthechangeinliabilitiesifthenew
balanceis
₱440,000?
A.₱15,000increase
B.₱15,000decrease
C.₱20,000increase
D.₱25,000decrease
37.Angela,AngelicaandAndreaareformingapartnership.Theappraisedvalueo
fassetscontributed
is ₱60,000,₱80,000 and ₱100,000,respectively.In addition,Angela and
Andrea agreed that
Angelica'sexperienceisworth₱30,000.Thepartnersdesiretoapplythebonusm
ethodwhere
applicable.Whatisthetotalcapitalrecordedatthedatethepartnershipisformed?
A.₱270,000
B.₱240,000
C.₱230,000
D.₱250,000
38.DesireeandDeborahcontribute₱100,000casheachwhileDextercontributes
hisskill.Howmuch
isthetotalpartnershipcapital?
A.₱100,000
B.₱200,000
C.₱300,000
D.₱400,000
39.JenniferandJessicawillcontribute₱150,000casheachandJennicawillcontri
bute₱50,000plus
herskill.Theyagreedtoshareprofitat2:2:1,respectively.Thecorrectamountofth
etotalpartnership
capitalizationwouldbe_____
A.₱200,000
B.₱370,000
C.₱250,000
D.₱350,000
40.Wala,AkongandPakeformedapartnershiptowhichWalacontributedaparcel
oflandwithan
acquisitioncostof₱25,000;Akongcontributed₱50,000cashandPake₱75,000c
ash.Thelandhasa
fairvalueof₱50,000atthedateofformation.Thetotalcapitalcreditofthepartnershi
pshouldbe
________
A.₱150,000
B.₱125,000
C.₱175,000
D.₱145,000
41.Peter,PatterandPanareforminganewpartnership.Peteristoinvestcashof₱1
00,000andacar
repairequipmentoriginallycosting₱120,000buthasasecondhandmarketvalue
of₱50,000.Patter
ontheotherhandistoinvestcashof₱160,000.Panwhosefamilybusinessisdealin
gwithacar
repairequipmenttobeusedbythepartnershipwitharegularpriceof₱120,000but
whichcosttheir
family'sbusiness₱100,000.Partnersagreedtoshareprofitsandlossesequally.
Whatarethecapital
balancesofpartnersuponformation?
A.Peter,₱220,000;Patter,₱160,000;Pan,₱150,000
B.Peter,₱150,000;Patter,₱160,000;Pan,₱120,000
C.Peter,₱160,000;Patter,₱160,000;Pan,₱160,000
D.Peter,₱176,666;Patter,₱176,666;Pan,₱176,666
42.EstradaandMorenoformedapartnershiponMarch1,2016andcontributedth
efollowingassets:
Estrada Moreno
Cash ₱80,000
Equipment ₱50,000
Theequipmentwassubjectedtoachattelmortgageof10,000thatwasassumedb
ythepartnership.
Thepartnersagreedtoshareprofitsandlossesequally.Moreno'scapitalaccount
onMarch1,2016
shouldbe_______
A.₱45,000
B.₱50,000
C.₱55,000
D.₱40,000
43.OnMarch1,2019,JuanandPedroformedapartnershipwitheachcontributingt
hefollowing
assets:
Juan Pedro
Cash ₱30,000 ₱70,000
MachineriesandEquipment 25,000 75,000
Building 225,000
FurnitureandFixtures 10,000
Thebuildingissubjectofamortgageloanof₱80,000whichistobeassumedbythep
artnership.The
partnership agreementprovidesthatJuan and Pedro shareprofitsand
losses30% and 70%,
respectively.OnMarch1,2019,thebalanceinPedro'scapitalaccountshouldbe_
______
A.₱370,000
B.₱310,000
C.₱280,000
D.₱290,000
44.UsingthesameinformationinNo.43,exceptthatthemortgageloanisnotassu
medbythe
partnership.OnMarch1,2019,thebalanceinPedro'scapitalaccountshouldbe__
______
A.₱370,000
B.₱310,000
C.₱280,000
D.₱290,000
45.DesireeandDeborahstartedapartnership.Desireecontributedabuildingshe
purchased10years
agofor100,000.Theaccumulateddepreciationofthebuildingonthedateofformat
ionofthe
partnershipis25,000andthefairvalueis110,000.ForwhatamountwillDesiree'sc
apitalbecredited
onthebooksofthepartnership?
A.₱100,000
B.₱75,000
C.₱110,000
D.₱25,000
46.OnOctober1,2016,SteveadmitsMartinforaninterestinhisbusiness.Onthisd
ate,Steve's
capitalaccountshowsabalanceof₱180,000,subjecttothefollowingadjustments
:
•Prepaidexpensesof₱21,000andaccruedexpensesof₱14,500aretoberecogni
zed
•5% ofthe outstanding accounts receivable ofSteve amounting to ₱90,000
is to be
recognizedasuncollectible
•Martinistobecreditedwith1/3interestinthepartnershipandistoinvestcashinadd
itionto
the₱36,000worthofmerchandiseinventory.
HowmuchisthecashshouldMartininvest?
A.₱95,000
B.₱55,000
C.₱91,000
D.₱36,000
47.DingandDongagreedtoinvestequalamountsandshareprofitsandlossesequ
allyinthe
partnershipwithDinginvestingcashof44,000andmerchandisevaluedat56,000.
Dongwillalso
investatotalof100,000includingcashandtheagreedvaluesofvariousassetsasf
ollows:
CarryingValue FairMarketValue
AccountsReceivable ₱78,000 ₱70,000
AllowanceforBadDebts 3,500 5,000
Inventory 9,300 10,500
OfficeEquipment,net 12,000 8,000
AccountsPayable 30,000 30,000
WhatamountofcashshouldDonginvestuponformationofthepartnership?
A.₱53,000
B.₱55,000
C.₱46,500
D.₱66,500
48.UsingthesamedatainNo.47,withaccountspayablenottobeassumedbythep
artnership,how
muchcashwouldDonginvest?
A.₱83,500
B.₱80,500
C.₱16,500
D.₱26,500
Foritems49-51
KinginvitedInatojoinhim andform
apartnership.InaagreedtojoinKingprovidedthatthefollowing
adjustmentsaretakenupinthebooksofKing.
•Prepaidexpensesof₱25,000andaccruedexpensesof₱20,000aretobetakenu
pinthe
booksofKing
•FairvalueofKing'sequipmentis₱10,000higherthanitscarryingvalue
•MerchandiseInventoryistobereducedby₱12,000
King'sCapitalbeforeadjustmentfortheaboveitemswas₱450,000.Inawillinvest
enoughcashto
makeherinterestequalto40%.
49.HowmuchisKing'sadjustedcapital?
A.₱755,000
B.₱453,000
C.₱403,000
D.₱450,000
50.HowmuchwillInainvesttogivehera40%interestinthepartnership?
A.₱300,000
B.₱302,000
C.₱382,000
D.₱392,000
51.HowmuchisthetotalagreedcapitalwithKing'sadjustedcapitalasthebase?
A.₱750,000
B.₱755,000
C.₱780,000
D.₱785,000
Foritems52-54
JackandJillopenedapartnershiponMarch1,2016withJackinvestingcashof₱10
0,000andLot
inheritedfrom
hisparentscosting₱300,000.Uponformationofthepartnership,ithasanassesse
d
valueof₱500,000fortaxpurposeswhichis₱50,000higherthanthemarketvalue.
Jillagreedto
investcashtocomeupwitha50%interestandshareintheprofitsandlossesofthep
artnership.
52.Howmuchisthetotalagreedcapital?
A.₱550,000
B.₱1,100,000
C.₱1,000,000
D.₱1,150,000
53.AtwhatamountwillthelotberecordedinthebooksofthepartnershiponMarch1
,2016?
A.₱400,000
B.₱500,000
C.₱450,000
D.₱550,000
54.AssumingthattheLandhasanexistingmortgageloanof₱100,000thatistobea
ssumedbythe
partnership,howmuchcashwouldJillinvestenoughtomakehisinterestequalto4
0%?
A.₱300,000
B.₱400,000
C.₱450,000
D.₱500,000
55.A.Alcantara,B.BautistaandC.CastroarenewCPAsandaretoform
apartnership.A.Alcantarais
tocontributecashof₱50,000andhercomputeroriginallycosting₱60,000buthas
asecondhand
valueof₱25,000.B.Bautistaistocontributecashof₱80,000.C.Castro,whosefa
milyisselling
computers,istocontributecashof₱25,000andabrandnewcomputerplusprinter
witharegular
priceinthemarketat₱60,000butwhichcosttheirfamily'scomputerdealership₱5
0,000.Partners
agreedtoshareprofitsequally.
Whatwouldbethetotalinitialmeasurementbasisoftheassetscontributedtothep
artnership?
A.Alcantara,31%;Bautista,33%,Castro,35%
B.Alcantara,32%;Bautista,34%;Castro,34%
C.Alcantara,32%;Bautista,31%;Castro,37%
D.Alcantara,35%;Bautista,30%;Castro,35%
Foritems56-57
PoloandLocoenteredintoapartnershiponAugust1,2019byinvestingthefollowin
gassets:
Polo Loco
Cash ₱400,000
Inventories ₱500,000
Land 1,100,000
Building 750,000
Equipment 650,000
TheagreementbetweenPoloandLocoprovidesthatprofitsandlossesaretobedi
vided30%toPolo
and70%toLoco,andthatthepartnershipistoassumethe₱350,000mortgageloa
nonthebuilding
56.HowmuchcashmustLocoinvestifheistoreceiveacapitalcreditproportionatet
ohissharein
profitinthepartnership?
A.₱130,000
B.₱135,000
C.₱140,000
D.₱145,000
57.How
muchisthetotalpartners'equityifLocowouldinvestcashof600,000inadditiontoth
e
aboveassetsinvestedandliabilitiesassumed?
A.₱3,650,000
B.₱3,850,000
C.₱3,750,000
D.₱3,570,000
Foritems58-59
AsofFebruary1,2013,HeckelandJeckeldecidedtoform
apartnership.Theirstatementoffinancial
positiononthisdateisasfollows:
Heckel Jeckel
Cash ₱41,000 ₱53,500
AccountsReceivable 425,000 280,000
MerchandiseInventory 242,500
Property,PlantandEquipment 360,000 470,000
Total ₱826,000 ₱1,046,000
AccountsPayable ₱150,000 ₱320,000
Heckel,Capital 676,000
Jeckel,Capital 726,000
Total ₱826,000 ₱1,046,000
ThepartnersagreedthatthepropertyplantandequipmentofHeckelandJeckelwe
reovervaluedby
₱35,000and₱60,000respectively.Anallowanceforuncollectibleaccountsof₱1
50,000and₱80,000
shallberecognizedinthebooksofHeckelandJeckel,respectively.
Thecapitalcontributionofeachpartneristhenetamountoftheassetscontributedt
oandliabilities
takenoverbythepartnership
58.Whatwouldbethetotalpartners’equityimmediatelyaftertheformationofthep
artnership?
A.₱1,077,000
B.₱1,087,000
C.₱1,090,000
D.₱1,187,000
59.HowmuchcashshouldHeckelinvestifthepartnershipagreementprovidesfor
capitalbalances
proportionatetoprofitandlosssharingratioof3:2toHeckelandJeckel,respectivel
y,usingthe
adjustedcapitalofJeckelasthebase?
A.₱380,000
B.₱388,000
C.₱440,000
D.₱488,000
60.OnAugust1,ArchieandBertpooledtheresourcesoftheirbusinessestoform
apartnership.The
partnershipshalllikewiseassumetheliabilitiesoftheirindividualbusinesses.
Partner'scapitalsaretobebasedonnetassetstransferredafterthefollowingadjus
tments:
•Bert'sinventoryistobeincreasedby₱6,000
•Anallowanceforuncollectibleaccountsof₱2,000and₱3,000aretobesetupinth
ebooks
ofArchieandBert,respectively
•Accountspayableof₱8,000shouldberecognizedinArchie'sbooks
•Otherassetsof₱12,000and₱14,000inArchie'sandBert'sbooksaretobewritten
off.
TheirunadjustedtrialbalancesshowedthefollowingbalancesatAugust1:
Archie Bert
Assets ₱150,000 ₱226,000
Liabilities 10,000 69,000
WhatarethecapitalbalancesofArchieandBert,respectively,immediatelyafterth
eformationofthe
partnership?
A.₱118,000and₱146,000
B.₱118,000and₱140,000
C.₱120,000and₱146,000
D.₱129,000and₱120,000
Foritems61-64
OnJune30,2017,LaoandYaoformedapartnershipwitheachcontributingthefoll
owingassets:
Lao Yao
Cash ₱200,000
Inventories 120,000
Equipment 180,000
LandandBuilding ₱2,200,000
LandandBuildingiscurrentlymortgagedinthebankandhasanoutstandingbalan
ceof800,000.
(Eachquestionisindependentfrom eachother)
61.HowmuchadditionalcashshouldLaoinvesttogivehim
anequalshareinthepartnershipifYao
willpaytheloanfrom hispersonalassets?
A.₱850,000
B.₱920,000
C.₱1,700,000
D.₱2,200,000
62.HowmuchcashshouldLaoinvesttogivehim
anequalshareinthepartnershipifthepartnership
willassumetheoutstandingbankloan?InterestpaymentisupdateduptoJune30,
2017?
A.₱450,000
B.₱900,000
C.₱850,000
D.₱1,700,000
63.HowmuchcashshouldLaoinvesttogivehim
anequalshareinthepartnershipifthepartnership
willassumethebankloanwhichinterestof10%perannum
hadbeenpaiduptoSeptember30,2017?
A.₱920,000
B.₱850,000
C.₱1,700,000
D.₱1,900,000
64.ReferringtoNo.63above,howmuchshallbethetotalpartners'equityafterthef
ormationofthe
partnership?
A.₱2,840,000
B.₱2,400,000
C.₱2,250,000
D.₱2,350,000
Foritems65-66
SephorainvitesSandratobeapartnerinherbusiness.BeforeSandra'sadmission
,theyagreedthat
thefollowingadjustmentsaretobetakenupinthebooksofSephora
•10%ofoutstandingaccountsreceivableof250,000withrelatedallowanceof5,0
00istobe
recognizedasdoubtfulaccounts
•FairmarketvalueofSephora'sequipmentis80%
oftheoriginalcostof500,000.No
depreciationhasyettoberecognized
Sephora'scapitalbeforeadjustmentswas450,000.Sandrawillinvestcashtohav
ea1/3interestin
thepartnership.
65.HowmuchisSephora'sadjustedcapitalbalance?
A.₱320,000
B.₱330,000
C.₱340,000
D.₱350,000
66.HowmuchcashshouldSandrainvestinthepartnership?
A.₱160,000
B.₱163,000
C.₱165,000
D.₱170,000
Foritems67-70
OnAugust1,2019,RalphadmitsVilmaforaninterestinhisbusiness.Onthisdate,
Ralph'scapital
accountshowsabalanceof₱250,000.RalphagreedtotheconditionofVilmatoadj
ustthefollowing
accountsonhisbooksbeforetheformationofthepartnership:
•Ralph'soutstandingaccountsreceivablewere₱100,000withrelatedallowancef
orbaddebts
of₱10,000.20%ofthereceivablewasassessedtobeuncollectible.
•Inventoryof₱130,000wasovervaluedby₱10,000
•PrepaidRentexpenseof₱24,000inthebooksofRalphrepresentsrentalforthe3r
dquarter
of2019.
•Ofthe₱8,000suppliestaken-
upinthebooks,only₱3,000worthofsupplieswereactuallyon
hand.
•Equipmentwithnetcarryingvalueof₱180,000isunderdepreciatedby₱10,000
Asidefrom
theaboveaccounts,Ralphhas₱150,000cashinbank.RalphandVilmaagreedto
havea
totalpartners'equityof₱1,200,000andtheirprofitandlosssharingratio
of2:1.Bothwould
contributeadditionalcashtomaketheirinterestinthepartnershipproportionateto
theprofitandloss
sharingratio.
67.HowmuchisthetotalassetcontributedbyRalphafteradjustment?
A.₱530,000
B.₱535,000
C.₱539,000
D.₱545,000
68.HowmuchisthePrepaidRentafteradjustment?
A.₱8,000
B.₱16,000
C.₱24,000
D.₱32,000
69.HowmuchistheadjustedcapitalofRalph?
A.₱207,000
B.₱210,000
C.₱220,000
D.₱250,000
70.HowmuchisthecashcontributedbyVilma?
A.₱400,000
B.₱500,000
C.₱700,000
D.₱800,000
Foritems71-75
B.GowantstoexpandhisexistingbusinessBGCompany.Togenerateadditional
capital,heinvitedC.
Sytoform
apartnership.Mr.Syagreedtoinvestenoughcashinordertohavea40%interestin
the
partnership.Beforetheformationofthepartnership,BG
Companyhadthefollowingassetswith
200,000accountspayabletobeassumedbythepartnership.
Cash ₱100,000
AccountsReceivable 350,000
Inventories 480,000
Equipment 280,000
AccumulatedDepreciation-Equipment (40,000)
LandandBuilding 2,400,000
AccumulatedDepreciation-LandandBuilding (500,000)
TotalAssets ₱3,070,000
B.GoandC.SyagreedtothefollowingadjustmentsonBGCompany'saccounts:
•5% oftheaccountsreceivableisconsidered worthlessand to bewritten-offand
the
remainingaccountsisestimatedtobe90%collectible
•Inventoriesistobevaluedat₱380,000
•Afterappraisal,landandbuildingwasgivenanappraisedvalueof₱2,100,000
71.HowmuchistheadjustedallowanceforbaddebtsofB.Go?
A.₱30,500
B.₱33,250
C.₱34,350
D.₱35,150
72.HowmuchisthecapitalofB.Gobeforeadjustments?
A.₱2,135,000
B.₱2,385,000
C.₱2,450,000
D.₱2,870,000
73.HowmuchisthecapitalofB.Goafteradjustments?
A.₱2,919,250
B.₱2,912,570
C.₱2,925,560
D.₱2,990,000
74.HowmuchisthetotalassetsofB.Goafteradjustments?
A.₱3,200,000
B.₱3,119,250
C.₱3,220,500
D.₱3,450,000
75.HowmuchisthecashcontributedbyC.Sytothepartnership?
A.₱2,079,500
B.₱2,080,500
C.₱2,085,550
D.₱2,125,000
76.AbelandCainformedapartnershipandagreedtodivideinitialcapitalequally.A
belcontributed
₱200,000andCaincontributed₱180,000inidentifiableassets.Underbonusmet
hodtoadjustthe
capitalaccounts,Abel'scapitalaccountsshouldbedebitedfor_______
A.₱20,000
B.₱10,000
C.₱30,000
D.₱50,000
77.MatteoandSarahformedapartnershipandagreedtohaveanequalinterestint
hepartnership's
assets.Theyagreedtomakethefollowingcontributions:Matteocontributed₱100
,000andSarah
contributed₱84,000inidentifiableassets.Underbonusapproach,whatistheam
ountofbonusfrom
MatteotoSarahcapital?
A.₱46,000
B.₱16,000
C.₱8,000
D.₱23,000
78.RichardandRaymondagreedtoform
apartnershipwithagreedcapitalizationof₱300,000with
Raymondcontributing1/3ofthetotalagreedcapitalization.HowmuchshouldRic
hardcontribute?
A.₱200,000
B.₱150,000
C.₱100,000
D.₱50,000
79.Hannahistheownerofanexistingsingleproprietorshipwithnetassetsof₱50,0
00.Theyagreed
torecordtheassetsandliabilitiesofHannah'sbusinessatbookvalue.Thebookval
ueofHannah's
businessliabilityis₱60,000.HarryandHaroldwillcontributeequallyincash60%
ofthetotal
capitalizationbasedonthecapitalcontributionofHannah.Thecapitalcontributio
nofHarryshould
be________
A.₱37,500
B.₱35,000
C.₱82,500
D.₱90,000
80.Roxanneisanownerofasoleproprietorshipwithnetassetsatbookvalueof₱10
0,000.Rochelle
isalsoasoleproprietorwithnetassetsatbookvalueof₱200,000.Thenetassetsof
Roxanneand
Rochellearetobetakenbythepartnershipattheirrespectivebookvalue.Rachelle
istocontribute
cashequalto1/2ofthetotalagreedcapitalizationbasedonthecontributionofRoxa
nneand
Rochelle.
TheamountofRachelle'scashcontributionshouldbe_______
A.₱100,000
B.₱150,000
C.₱200,000
D.₱300,000
CHAPTER2:PARTNERSHIPOPERATION
1.Intheabsenceofanagreement,theshareofeachpartnerintheprofitsandlosses
shallbein
accordancewiththe_____
A.Equally
B.Originalcapitalcontribution
C.Averagecapitalbalance
D.Endingcapitalbalance
2.TheAandBpartnershipagreementprovidesforAtoreceivea20%onprofitsbefo
rethebonus.
RemainingprofitsandlossesaredividedbetweenAandBintheratioof1:3,respect
ively.Which
partnerhasagreateradvantagewhenthepartnershiphasaprofitorwhenithasalo
ss?
Profit Loss
A. A B
B. A A
C. B B
D. B A
3.Whatreferstotheregularadvancesmadebythepartnersinanticipationoftheirs
hareinprofit?
A.Temporarywithdrawals
B.Permanentwithdrawals
C.Owner'scapital
D.Owner'sdrawing
4.Whyisitgeneralprofessionalpartnershipexemptedfrom 30%incometax?
A.Becauseitismandatedbythelaw
B.BecauseindividualpartnersunderGPPshallbetheonewhoaresubjectedforin
cometaxin
theirseparateandindividualcapacities
C.BothAandB
D.NeitherAandB
5.Thearticlesofco-
partnershipshouldmakeclearallofthefollowingpoints,except________
A.Proceduresforadmittingnewpartners
B.Profit-sharingratio
C.Taxespaidbythepartnership
D.Withdrawalsallowedtopartners
6.Thefollowingareoptionsavailablefordeterminingthepartners'shareinprofitex
ceptwhichofthe
following?
A.Capitalcontribution
B.Capitalcontributionandservicetothepartnership
C.Loanstothepartnership
D.Statedfractionorratio
7.Partnershipfinancialstatementsaremuchlikethoseof_______
A.Personalfinancialstatements
B.Not-for-profitorganization
C.Proprietorship
D.Corporations
8.ThepartnershipagreementofSantosandCruzprovidesforsalaryallowanceso
f₱45,000to
Santosand₱35,000toCruz,withtheremainingprofitorlosstobedividedequally.
Duringtheyear,
SantosandCruzeachwithdrewcashequalto80%oftheirsalaryallowances.Ifpart
nershipprofitis
₱100,000,Santos'equityinthepartnershipwould_______
A.DecreasemorethanCruz
B.DecreasethesameasCruz
C.IncreasemorethanCruz
D.IncreasethesameasCruz
9.PartnersDesireeandDeborahshareprofitandlossequallyaftereachhasbeenc
reditedwith
annualsalaryallowancesof₱160,000and₱140,000,respectively.Underthisagr
eement,Desireewill
benefitby₱20,000morethanDeborahinwhichofthefollowingcircumstances?
A.Inallearningsorlosssituations
B.Onlyifthepartnershipdoesnotincuralossfortheyear
C.Onlyifthepartnershiphasearningsof300,000ormorefortheyear
D.Onlyifthepartnershiphasearningsofatleast20,000fortheyear
10.Inapartnership,partners'salariesareconsideredas_______
A.Aliability
B.Aloss
C.Anallocationofprofitsandlosses
D.Anexpenseofthebusiness
11.Whichofthefollowingprofitandlossallocationmethodsfullydisregardstheser
vicerenderedby
thepartnerinthepartnershipandthecapitalcontributionmadebyeachpartner?
A.Bonusallowancetopartners;balanceinagreedratio
B.Equally
C.Interestallowancetopartners;balanceinagreedratio
D.Salaryallowancetopartners;balanceinagreedratio
12.Closingentriesofapartnershipincludeentriesto________
A.Closetheincomesummaryanddividendsdeclaredaccountstoretainedearnin
gs
B.Closeincomeandexpenseaccountstotheincomesummaryaccountandthenc
losethe
incomesummaryaccountbalancetothepartners'drawingaccounts
C.Eliminatecapitalaccountsandrecordthedistributionofassetstopartnerstoeff
ectthe
partnershipterminationandliquidation
D.Recorddistributionofcashtopartners
13.Ifthepartnershipdoesnotspecifyhowprofitistobeallocatedtothepartners,pro
fitsandlosses
shouldbeallocated
A.Equally
B.Equitablysothatpartnersarewellcompensatedfortheirtimeandeffort
C.Inaccordancewiththeircapitalcontribution
D.Inproportiontotheaveragecapitalinvestedduringtheperiod
14.Whichofthefollowingbestdescribesthenatureofallowancesforsalariesandi
nterestina
partnershipprofitandlosssharingagreement?
A.Theyaremeansofdeterminingreasonablemonthlywithdrawalscbyeachpartn
er
B.Theyaremeansofdistributingprofitinrelationtoservicesrenderedandcapitalin
vested
bypartners
C.Theyaretreatedasexpensesofthebusinessthatshouldbedeductedfrom
revenuein
determiningprofit
D.Theyareamountsuponwhicheachpartnerwillhavetopaypersonalincometax
15.Inordertoarriveatanequitablemannerofdistributingprofitsandlosses,anyor
allofthe
followingfactorsmaybetakenintoconsideration,except_____
A.Amountofcapitalcontributedbythepartners
B.Numberofdependentchildrenofthepartners
C.Servicerenderedtothepartnershipbythepartners
D.Skillsofthepartnersthatareneededinrunningthepartnership
16.Statement1:Whenthepartnershipagreementspecificallyprovidesforsalarie
sandinterest,the
provisionmustbeappliedbeforetheremainderofprofitorlossisdivided
Statement2:Thepartnershipprofitisdividedinproportionineachpartner'scapital
equityinterest,
unlessthepartnershipcontractspecificallyindicatesthemannerofdividingthepr
ofit
B.Onlystatement2iscorrect
D.Bothstatementsareincorrect
17.Statement1:Anindustrialpartnerisexemptfrom sharinginpartnershiplosses
Statement2:Salariestopartnersandinterestonpartners'capitalsareaccountedf
orasexpenses
ofthepartnership
18.Statement1:Anysalaryallowancesstipulatedinthepartnershipagreementar
econsideredonlyif
profitissufficienttocoversuchallowance
Statement2:Itisnecessarytosetupadrawingaccountfortheindustrialpartnerfort
hepurpose
ofrecordinghis/hershareintheprofitsofthepartnership
19.Statement1:Apartnershipisnotsubjectforincometax
Statement2:Thereisabonusallowancetopartner/sifthepartnershipincurredlos
ses
20.Statement1:Whenbeginningcapitalbalancesareused,additionalinvestmen
tduringtheyearare
discouragedbecausemakingsuchinvestmentsarenotcompensatedinthedivisi
onofprofitsinthe
nextyear
Statement2:Whenaveragecapitalareused,investmentsandwithdrawalsmade
duringtheyear
areencouraged
Foritems21-22
ThefollowingaccountbalancesforthepartnershipofDesiree,DeborahandDexte
rweretakenfrom
thebooksonOctober1,2013.
Assets ₱500,000
Liabilities 200,000
Desiree,Capital 120,000
Deborah,Capital 95,000
Dexter,Capital 85,000
Thepartnersagreedtodistributeprofitsasfollows:
•AnnualsalariestoDesireeandDeborahof₱5,000each
•Annualinterestof5%onbeginningcapital
•Bonusof15%toDesireebasedonprofitaftersalaries,interestandbonus
•Remainingprofit:25%toDesiree,35%toDeborahand40%toDexter
ThepartnershipbeganitsoperationsonOctober1,2013andprofitforthethreemo
nthsended
December31,2013is₱69,500
21.WhichofthefollowingisTRUE?
A.ThebonustoDesireeis₱5,804
B.Profitaftersalaries,interestandbonusis₱38,696
C.Deborah'sshareinprofitis₱21,688
D.Dexter'sshareinprofitaftersalaries,interestandbonusis₱13,534
22.HowmuchisequitybalanceofDeborahonDecember31,2013?
A.₱116,688
B.₱123,455
C.₱132,450
D.₱147,235
23.LSandGM
arepartnersofBMGPartnership,whichbeganitsoperationsonJune1,2013witht
he
followingcapitalbalances:
LS,Capital ₱1,440,000
GM,Capital 720,000
Accordingtothepartnershipagreement,allprofitsandlosseswillbedistributedasf
ollows:
•LSwillbeallowanannualsalaryof₱960,000whileGM
willbeallowedamonthlysalaryof
₱112,000
•Thepartnerswillbeallowedinterestequalto15%ofthecapitalbalanceasofthefirs
tdayof
theyear.
•GMwillbeallowedabonusof12%ofprofitafterbonus
•Theremainderwillbedividedequally
•Eachpartnerisallowedtowithdrawupto₱72,000during2013andupto₱96,000p
eryear
foryears2014through2017
Thepartnershipoperationsresultedinprofitof₱560,000fortheremainderof2013
andlossof
₱280,000fortheyear2014.Eachpartnerwithdrew themaximum amountfrom
thebusinesseach
period.
Whichofthefollowingstatementsiscorrect?
A.ThecapitalbalanceofLSattheendof2014is₱1,242,925
B.TheshareofGMinthenetlossin2014isacredittocapitalaccountof₱14,575
C.Thereisanetincreaseof₱97,500inthecapitalaccountofLSfrom
beginningtoendof
2013
D.ThecapitalbalanceofGMattheendoffirstyearis₱1,038,500
24.ThepartnershipofD,TandIwasformedonJanuary1,2013.Theoriginalinvest
mentswereas
follows:D,₱240,000;T,₱360,000;I,₱540,000.Accordingtothepartnershipagre
ement,profitorloss
willbedividedamongtherespectivepartnersasfollows:
•Salariesof₱80,000forD,₱70,000forTand₱48,000forI
•Interestof9%ontheoriginalcapitalbalanceforeachpartner
•Remainderisdividedequally
HowmuchwasthepartnershiplossifI'sshareinlosswas₱39,600?
A.₱108,000
B.₱129,600
C.₱136,200
D.₱171,000
Foritems25-26
OnJanuary1,2013,Tommy,JasonandKimberlyformedapartnershipwithTomm
yasanindustrial
partner.JasonandKimberlycontributingcashof₱400,000and₱600,000,respec
tively.Theyagreeto
divideprofitsintheratioof2:4:3toTommy,JasonandKimberly,respectively
Theoperationsofthepartnershipfortheyear2013resultedinthelossof₱240,000.
25.HowmuchistheshareofJasonandKimberlyinthepartnershiploss?
A.₱137,143and₱102,857
B.₱80,000and₱160,000
C.₱96,000and₱144,000
D.₱120,000and₱120,000
26.WhatwouldbetheequitybalanceofJasonandKimberlyfortheyear2013?
A.₱304,000and₱456,000
B.₱262,857and₱497,143
C.₱280,000and₱480,000
D.₱340,000and₱440,000
Foritems27-28
AngelaandNicksformedapartnershiponJanuary1,2014.Theyagreedtodividet
heprofitorloss
accordingtothefollowingassumptions:
•Annualsalaryallowanceof₱100,000toAngelaand₱85,000toNicks
•Bonusof20% and30%
isgiventoAngelaandNicks,respectivelybasedonprofitafter
deductingallbonuses
•Remainderistobedividedequally
Thepartnershipoperationsfortheyear2014resultedinaprofitof₱300,000
27.HowmuchisthebonustoAngelaandNicks,respectively?
A.₱50,000and₱70,000
B.₱70,000and₱80,000
C.₱30,000and₱40,000
D.₱40,000and₱60,000
28.HowmuchistheshareofAngelainprofit?
A.₱152,500
B.₱147,500
C.₱134,500
D.₱142,000
29.Initsfirstyearofoperation,RandSCompany,apartnership,madeaprofitof₱27
0,000before
providingforsalariesof₱75,000and₱60,000perannum
forRichmondandSamuel,respectivelyas
stipulatedinthepartnershipagreement.Capitalcontributionsareasfollows:
Richmond ₱45,000
Samuel 30,000
Tyron 15,000
Total ₱90,000
Thereisnostipulationastothedivisionofprofitorlossandtherehasnochangeinthe
capital
contributionsduringtheyear
WhatwouldbetherespectivesharesofRichmond,SamuelandTyronintheprofit?
A.Richmond,₱142,500;Samuel,₱105,000andTyron,₱22,500
B.Richmond,₱135,000;Samuel,₱67,500andTyron₱67,500
C.Richmond,₱90,000;Samuel,₱90,000andTyron,₱90,000
D.Richmond,₱180,000;Samuel,₱45,000andTyron,₱45,000
30.Heidiand Ingrid are partners agreeing to allow monthlysalaries (₱15,000
and ₱10,000,
respectively),6%
interestonthecapitalinvestmentatthebeginningoftheyear(₱650,000and
₱350,000,respectively.Theremainingprofitistobesharedequally.Partnershipo
perationsduring
thefirstyearresultedinaprofitof₱350,000.
WhatwouldbetherespectivesharesofHeidiandIngridinthisprofit?
A.₱175,000and₱175,000
B.₱214,000and₱136,000
C.₱233,333and₱116,667
D.₱262,500and₱87,500
31.AngelaandBiancaformedapartnership.Thepartnershipagreementstipulate
sthefollowing:
•Annualsalaryallowanceof₱80,000forAngelaand₱40,000forBianca
•Thepartnersshareinprofitsandlossesequally
Thepartnershipearnedprofitof₱100,000.HowmuchistheshareofBianca?
A.₱70,000
B.₱30,000
C.₱48,000
D.₱52,000
32.CiaraandDianaformedapartnership.Thepartnershipagreementstipulatest
hefollowing:
•Annualsalaryallowancesof₱10,000forCiaraand₱40,000forDiana
•BonustoCiaraof10%oftheprofitaftersalariesbutbeforebonus
•Thepartnersshareprofitsona60:40ratio
Duringtheperiod,thepartnershipincurredalossof₱20,000beforedeductionfors
alaries.Bywhat
amountdidDiana'scapitalaccountchange?
A.Increasedby₱12,000
B.Decreasedby₱12,000
C.Increasedby₱32,000
D.Increasedby₱32,000
33.EliseandFrancineformedapartnership.Thepartnershipagreementstipulate
sthefollowing:
•Annualsalaryallowancesof₱10,000forEliseand₱40,000forFrancine
•BonustoEliseof10%oftheprofitaftersalariesbutbeforebonusandinterest
•Interestof12%onthebeginningcapitalbalanceofFrancine
•Thepartnersshareprofitsandlossesona60:40ratio
Duringtheperiod,thepartnershipearnedprofitof₱200,000beforedeductionfors
alaries.Francine's
beginningcapitalbalancewas₱60,000.HowmuchistheshareofEliseintheprofit
?
A.₱101,680
B.₱98,320
C.₱110,820
D.₱96,720
34.GilbertandHerbertformedapartnership.Thepartnershipagreementstipulat
esthefollowing:
•First,Gilbertshallreceive2%ofprofitupto₱200,000and5%over₱200,000
•Second,Herbertshallreceive1%oftheremainingprofitover₱200,000
•Anyremaindershallbesharedequally
Duringtheyear,thepartnershipearnedaprofitof₱500,000
HowmuchistheshareofGilbertintheprofit?
A.₱258,000
B.₱268,885
C.₱242,000
D.₱241,905
35.Isabelle,JechelleandKristelleformedapartnership.Thepartnershipagreem
entstipulatesthe
following:
•Annualsalaryallowancesof₱100,000forIsabelleand₱20,000forJechelle
•10%interestonthebeginningcapitalbalanceofKristelle
•Thepartnersshareinprofitsandlossesona40:40:20ratio.
Thepartnershipearnedaprofitof₱500,000.Kristelle'scapitalaccounthadabegin
ningbalanceof
₱300,000.ThedifferencebetweentheamountsreceivedbyIsabelleandJechelle
is________
A.₱160,000
B.₱240,000
C.₱80,000
D.₱60,000
36.LiezelandMichelleformedapartnership.Thepartnershipagreementstipulat
esthefollowing:
•Annualsalaryallowancesof₱80,000forLiezeland₱40,000forMichelle
Thepartnershipearnedprofitof₱100,000aftersalaries.Howmuchistheshareof
Michelle?
A.₱70,000
B.₱30,000
C.₱130,000
D.₱90,000
37.NandingandOnyokformedapartnership.Thepartnershipagreementstipulat
esthefollowing:
•Monthlysalaryallowancesof₱10,000forNandingand₱4,000forOnyok.Thesal
ariesare
recognizedasexpenses
•Thepartnersshareequallyinprofitsandlosses
Thepartnershipearnedprofitof₱360,000.HowmuchistheshareofNanding?
A.₱300,000
B.₱228,000
C.₱148,000
D.₱128,000
38.PedroandQuennieshareequallyinthepartnershipprofitsandlosses.Duringt
heyear,Pedro's
capitalaccounthasanetincreaseof₱50,000.Pedromadecontributionsof₱10,00
0andcapital
withdrawalsof₱60,000duringtheyear.Howmuchwasthepartnershipprofitforth
eyear?
A.₱180,000
B.₱200,000
C.₱210,000
D.₱480,000
39.RachelleandSunshineformedapartnership.Thepartnershipagreementstip
ulatesthefollowing:
•Annualsalaryallowanceof₱100,000forRachelle,themanagingpartner
•10%bonustoRachelleaftersalariesbutbeforedeductionforthebonus
TheshareofRachelleinthepartnershipprofitduringtheperiodwas₱595,000inclu
dingabonusof
90,000.HowmuchwastheshareofSunshine?
A.₱386,000
B.₱398,000
C.₱405,000
D.₱504,000
40.TrishaandVanessaformedapartnership.Thepartnershipagreementstipulat
esthefollowing:
•Annualsalaryallowancesof₱200,000forTrishaand₱300,000forVanessa
•Interestof10%basedonbeginningcapitalofVanessa
•BonustoTrishaof20%basedonprofitbeforedeductingsalariesandinterest
Duringtheyear,thepartnershipearnedprofitof₱600,000.Beginningcapitalbala
nceofVanessawas
90,000.HowmuchistheshareofTrisha?
A.₱323,500
B.₱294,500
C.₱334,500
D.₱305,500
Foritems41-43
ThepartnershipagreementofAiraandArisprovidesthatannualinterestat10%of
averagecapitals
shallbecreditedtoeachpartner;AiraandArisareprovidedmonthlysalariesof₱48
,000and₱72,000,
respectively;bonusat20%ofprofitsaftersalaries,interestandbonusshallbecredi
tedtoAira;and
residualprofitorlossisdivided,60%toAiraand40%toAris.
ThepartnershipstartedoperationsonJuly1,2014andusesthecalendaryearasits
reportingperiod.
TheprofitforthesixmonthsendedDecember31,2014,afterinterestandsalariesa
mountedto
₱96,000.
41.IfaveragecapitalbalancesofAiraandArisare₱240,000and₱360,000,respec
tively,howmuch
isthebonuscreditedtoAira?
A.₱15,000
B.₱16,000
C.₱20,000
D.₱24,000
42.IfaveragecapitalbalancesofAiraandArisare₱100,000and₱200,000respect
ively,howmuchis
thetotalshareofArisinthetotalprofit?
A.₱484,000
B.₱474,000
C.₱454,000
D.₱464,000
43.ReferringtoNo.42,whatwastheoriginalprofit?
A.₱831,000
B.₱834,000
C.₱920,000
D.₱940,000
Foritems44-45
Joy,amanagingpartnerofChickandJoyCompanywascreditedwithasalaryof₱1
20,000and
interestof₱60,000onhercapitalaccountandwaschargedwith₱20,000ashersh
areofthebalance
intheIncomeSummaryaccount,aftertakingpartners'salariesandinterestonpart
ners'capital
balancesintoaccount.Shewithdrew₱140,000duringtheyear.
44.WhatamountwillJoyreporttoBureauofInternalRevenueashershareinthepa
rtnershipprofit?
A.₱140,000
B.₱150,000
C.₱160,000
D.₱180,000
45.HowmuchshouldthepartnershipreportasJoy,equityinitsstatementoffinanci
alposition?
A.₱20,000
B.₱30,000
C.₱40,000
D.Cannotbedetermined
Foritems46-49
IrishandBenbeganoperationsonMarch1,2013.Onthatdate,Irishinvested₱1,5
00,000cashand
Beninvestedlandandbuildingwithfairvaluesof₱800,000and₱1,000,000,respe
ctively.Benalso
invested ₱600,000 cash on November1,2013 to provide additionalworking
capitalforthe
partnership.Thepartnershipcontractincludesthefollowingprofit-sharingplan.
•Annualsalaries:₱180,000(Irish);₱240,000(Ben)
•Annualinterestonaveragecapitalbalance:10%(Irish);10%(Ben)
•Remainder:60%(Irish);40%(Ben)
Theannualsalarywastobewithdrawnbyeachpartnerin12equalmonthlyinstallm
ents.
DuringthefiscalyearendedFebruary28,2014,IrishandBenhadnetsalesof₱5,00
0,000,costof
goodssoldof₱2,800,000andtotalsellingandadministrativeexpensesof₱1,000,
000.Thepartners'
salarieshadbeenrecordedaspartofoperatingexpenses,andeachpartnermade
monthlycash
drawingsinaccordancewiththepartnershipcontract.(Ignoreincometaxeffects)
46.HowmuchisthecorrectprofitofthepartnershipforthefiscalyearFebruary28,2
014?
A.₱1,200,000
B.₱1,620,000
C.₱1,250,000
D.₱1,630,000
47.WhatistheaveragemonthlycapitalbalanceofBen?
A.₱800,000
B.₱1,000,000
C.₱1,400,000
D.₱2,000,000
48.HowmuchistotalshareofIrishintheprofitfortheperiod?
A.₱780,000
B.₱840,000
C.₱510,000
D.₱620,000
49.HowmuchistheequityofBenasofFebruary28,2014?
A.₱3,100,000
B.₱2,940,000
C.₱2,100,000
D.₱1,970,000
50.SoledadandStevenformedapartnershiponJanuary1,2015withSoledadcon
tributing₱180,000
cashandStevencontributingequipmentwithabookvalueof₱76,000andafairval
ueof₱32,000.
During2015,Stevenmadeadditionalinvestmentsof₱16,000onMarch31and₱1
6,000onJune1,
and on August31,he withdrew ₱40,000.Soledad made
neitheradditionalinvestments nor
withdrawalsduringtheyear.
WhatistheaveragemonthlycapitalofStevenfortheyear2015?
A.₱30,000
B.₱38,000
C.₱40,000
D.₱45,000
Foritems51-54
Lawrenceand Angela Joyformed a partnership on January1,2014.On
thisdate,Lawrence
contributedcapitalof₱600,000.Ontheotherhand,AngelaJoycontributednocapi
talbecauseshe
willmanagethefirm
onfulltimebasis.Thepartnershipagreementprovidesforthefollowing:
•Capitalaccountsaretobecreditedannuallywithinterestat5%ofthebeginningca
pital
•AngelaJoyistobepaidasalaryof₱20,000permonth
•AngelaJoyistoreceiveabonusof20%
ofprofitcomputedbeforeinterest,salariesand
bonusarededucted.
•ProfitsaretobedividedbetweenLawrenceandAngelaJoyintheratioof7:3
Therearenowithdrawalsbyeitherpartnerduringtheyear.Thepartnershipincom
estatement
containsthefollowing:
Revenues ₱1,720,000
Expenses(includingsalary,interestandbonus) 840,000
NetProfit ₱880,000
51.HowmuchisthebonustoAngelaJoy?
A.₱287,500
B.₱275,250
C.₱250,500
D.₱295,000
52.Assumethatthebonusisbasedonprofitcomputedafterbonusbutbeforeintere
standsalaries
arededucted,howmuchisthebonustoAngelaJoy?
A.₱191,667
B.₱230,000
C.₱287,500
D.₱240,500
53.WhatwouldbetheequitybalanceofLawrenceatyear-end?
A.₱1,246,000
B.₱1,791,500
C.₱1,975,000
D.₱2,105,000
54.Whatwastheadjustedprofit?
A.₱1,437,500
B.₱1,434,750
C.₱1,457,000
D.₱1,575,000
55.Arman,BernardandCyrilarepartnerswithaveragecapitalbalancesin2013of
₱240,000,
₱120,000and₱80,000,respectively.Partnersreceive10%interestontheiravera
gecapitalbalances.
SalariesallowedtoArmanandCyrilis₱60,000and₱40,000,respectively;thebala
nceoftheprofitis
tobedividedequally.In2013,thepartnershipsustainedalossof₱66,000beforeint
erestand
salariestopartners.
HowmuchistheshareofCyrilintheloss.
A.(₱20,000)
B.(₱22,000)
C.(₱25,000)
D.(₱30,000)
56.ThecapitalaccountsofDomenicandAceattheendoftheyearfollow:
Domenic Ace
Debit Credit Debit Credit
January1 ₱160,000 ₱240,000
March28 180,000
August1 ₱20,000
September4 ₱40,000
October25 80,000
Thepartnershiphadaprofitof₱120,000fortheyear.Thepartnershipagreementp
rovidesthatthe
profitistobedividedaccordingtoaveragecapitalratio.
HowmuchistheshareofDomenicintheprofitfortheyear?
A.₱64,177
B.₱63,174
C.₱62,147
D.₱61,176
57.PartnersOliver,PatrickandRonaldhadaveragecapitalbalancesduringtheye
arof₱400,000,
₱500,000and₱100,000,respectively.Thepartnershipagreementprovidesforth
efollowingdivision
ofprofitsandlosses
•Interest:6%onaveragecapitalbalancesofeachpartner
•Salaries:Oliver,₱100,000;Patrick,₱150,000andRonald,none
•Remainder:Oliver,20%;Patrick,30%andRonald,50%
IfthetotalshareofOliverintheprofitis₱112,000,howmuchshouldhavebeenthep
artnershipprofit?
A.₱230,000
B.₱240,000
C.₱250,000
D.₱260,000
58.Desiree,apartnerinDDSpartnershiphasa30%participationinpartnershippr
ofitsandlosses.
Desiree'scapitalaccountdecreasedbyanetamountof₱240,000duringthecalen
daryear2013.
During 2013,Desireewithdrew ₱520,000 which wascharged
againsthercapitalaccountand
contributedpropertytothepartnershipwithafairvalueof₱100,000butwithacarryi
ngvalueof
₱80,000.
WhatwastheprofitoftheDDSpartnershipfor2013?
A.₱500,000
B.₱600,000
C.₱700,000
D.₱800,000
Foritems59-60
MicaandRainarepartnersofMRCompany.Thepartnershipagreementstipulate
sthefollowing:
•Annualsalaryallowancesof₱300,000toMicaand₱400,000toRain
•Annualinterestof8%basedonbeginningcapitalbalancesofMicaandRain
•Remainingprofitsorlossesistobesharedequally
Thepartnershipoperationsresultedinaprofitof₱750,000.Beginningcapitalbala
ncesofMicaand
Rainare₱350,000and₱450,000,respectively.
59.HowmuchistheshareofMicaintheprofit?
A.₱321,000
B.₱429,000
C.₱520,000
D.₱710,000
60.Assumefurtherthatthepartnershipagreementstipulatesthatthepartners'sal
ariesandinterest
shallbemadeonlytotheextentthattheprofitcanprovide,whatwouldbetherespect
ivesharesof
MicaandRainintheprofit?
A.₱321,000and₱429,000
B.₱321,875and₱428,125
C.₱187,500and₱562,500
D.₱250,000and₱500,000
61.ThepartnershipagreementofKierandEmilprovidesthatinterestat10%
perannum istobe
creditedtoeachpartneronthebasisofweightedaveragecapitalbalances.Asum
maryofEmil's
capitalaccountfortheyearendedDecember31,2018isasfollows:
Balance,January1 ₱280,000
AdditionalInvestment,June30 160,000
Withdrawal,July31 90,000
Balance,December31 ₱350,000
WhatamountofinterestshouldbecreditedtoEmilfortheyear2018?
A.₱32,000
B.₱32,250
C.₱33,200
D.₱33,500
62.AshleyandHilariearepartnersinamerchandisingbusiness.During2014,they
withdrew their
salaryallowancesof₱280,000and₱420,000,respectively.Profitsandlossesare
sharedintheratio
of3:2.TheIncomeSummaryaccountbeforeanyprofitallocationhasacreditbalan
ceof₱900,000.
Thepartner'scapitalaccountsshowthefollowing:
Ashley Hilarie
Beginning,balances ₱700,000 ₱500,000
Additionalinvestments 300,000 400,000
Withdrawalsotherthansalaryallowances (150,000) (100,000)
Endingbalance ₱850,000 ₱800,000
Whatwouldbetheequitybalancesofthepartners'AshleyandHilarie,respectively
onDecember31,
2014afterdividingtheprofit?
A.₱970,000and₱880,000
B.₱820,000and₱780,000
C.₱920,000and₱870,000
D.₱770,000and₱820,000
63.OnJanuary2,2019,VinceandLeilaformedapartnership.Vincecontributedca
pitalof₱175,000
andLeilacontributed₱25,000.Theyagreedtoshareprofitsandlosses80%and20
%,respectively.
Vinceisageneralmanagerandworksinthepartnershipfulltimeandisgivenamont
hlysalaryof
₱5,000;aninterestof5%ofthebeginningcapitalofbothpartners;andbonusof15
%toVincebased
onprofitbeforesalaries,interestandbonusarededucted.
TheincomestatementofthepartnershipfortheyearendedDecember31,2019asf
ollows:
NetSales ₱875,000
CostofGoodsSold 700,000
GrossMargin 175,000
Expenses(includingsalary,interestandbonus) 143,000
NetProfit ₱32,000
HowmuchisthebonustoVince?
A.₱13,304
B.₱14,440
C.₱18,000
D.₱20,170
64.Whatwillbethebasisofdividingpartnershiplossesifthepartnershipagreemen
tstipulatesonly
thedivisionforprofit?
A.Profit-sharingratio
B.Originalcapitalcontribution
C.Equally
D.AverageCapitalbalance
65.Whatwillbethebasisofdividingthepartnershipprofitsiftheagreementstipulat
esonlythe
divisionforlosses?
A.Basedontheendingcapitalbalancesofcapitalistpartners
B.Basedontheoriginalcontributionofcapitalistpartnerbutjustandequitableshar
efor
industrialpartner
C.Basedonthetimedevotedinmanagingthebusiness
D.Basedonaveragecapitalbalancesofpartners
66.Bonusallowancetopartner/sisallowedonlywhenthepartnershipgenerates_
___________
A.Profit
B.Loss
C.ProfitandLoss
D.Dependsontheagreement
67.Whyisanindustrialexemptedfrom absorptionofpartnershiplosses?
A.Becauseindustrialpartnercannotwithdrawtheservicesrenderedintheoperati
onofthe
partnership
B.Becausethelawofpartnershipsaysso
C.Becauseindustrialpartnercannotwithdrawanypropertiesofthepartnership
D.Becauseindustrialpartnerisonlytaskedtomanagethebusiness
68.ThecreditbalanceintheIncomeSummaryaccountrepresents________
A.Profit
B.Loss
C.Capital
D.ProfitandLoss
69.ThebalanceofIncomeSummaryaccountistransferredtothedrawingaccount
softhepartners.
Thisispossible_______
A.Ifthe partners'intention is to keep the
capitalaccountintactforinvestmentand
permanentwithdrawalsofcapital
B.Ifthepartners'intentionistomakeprofitsandlossesaspartofpermanentcapital
C.Ifthepartners'intentionistokeepprofitsandlossaspartoftemporarywithdrawal
s
D.Allofthese
70.ThebalanceofIncomeSummaryaccountistransferreddirectlytothe
capitalaccountsofthe
partners.Thisispossible________
A.Ifthepartners'intentionistokeepthecapitalaccountintactforinvestmentandpe
rmanent
withdrawalsofcapital
B.Ifthepartners'intentionistomakeprofitsandlossesaspartofpermanentcapital
C.Ifthepartners'intentionistokeepprofitsandlossaspartoftemporarywithdrawal
s
D.Allofthese
71.Ifthepartnersdevoteequaltimeintheoperationofthepartnership,whatisthem
ostequitable
wayofdividingpartnershipprofit?
A.Equally
B.Arbitraryratio
C.Capitalratio
D.Interestoncapitalandbalanceontheagreedratio
72.Whichofthefollowingmethodsareprovidedinfullwhethertheprofitisinsufficie
ntorsufficient
orwhenthereisaloss?
A.Interestoncapitalandthebalanceontheagreedratio
B.Bonustomanagingpartnerandthebalanceontheagreedratio
C.Salaryallowancestopartnersandthebalanceontheagreedratio
D.AandC
73.Thefollowingmethodsofdividingprofitsandlossesdoesnotrecognizethetim
eandeffortmay
devotebypartnersinrunningtheoperationofthepartnershipexceptwhichone?
A.Arbitraryratio
B.Salaryallowancestopartnersandthebalanceontheagreedratio
C.Interestoncapitalandthebalanceontheagreedratio
D.Capitalratio
74.Thefollowingmethodsofdividingprofitsandlossesrecognizethedifferencesi
nthecapital
contributionsmadebypartnersexceptwhichone?
A.Averagecapitalratio
B.Interestoncapitalandthebalanceontheagreedratio
C.Bonustomanagingpartnerandthebalanceontheagreedratio
D.Endingcapitalratio
75.InCPABoardExam,thephrase"salaries,interestandbonusarerecognizedas
expenses".This
meansthat_______
A.Theprofitgeneratedbythefirm
isalreadythenetofthepartners'salaries,interestand
bonus
B.Thesalaries,interestandbonusaretreatedaspartoftheoperatingexpensesoft
hefirm
C.Thesalaries,interestandbonuswillnotbecomemethodsofallocatingprofits
D.Thesalaries,interestandbonusareconsideredastemporarywithdrawalswhic
hwillbe
deductedtopartners'equityatyear-end
Foritems76-80
GlasieandGloriearepartnersengagedinanexport-
importbusiness.Severaltransactionsduring
2013affectedthepartner'scapitalaccounts,whicharesummarizedasfollows:
Glasie Glorie
Debit Credit Debit Credit
Balance,January1 ₱600,000 ₱800,000
March1. ₱100,000
April1 200,000
May1 100,000
June30 ₱150,000
August31 100,000
October1 150,000
October31 125,000 50,000
TheIncomeSummaryaccounthasacreditbalanceof₱180,000
76.Ifprofitsandlossesaredividedusingtheaveragecapitalratio,howmuchisthes
hareofGlasiein
theprofit?
A.₱74,483
B.₱74,546
C.₱82,450
D.₱85,120
77.Ifprofitsandlossesaredividedusingtheendingcapitalratio,howmuchisthesh
areofGloriein
theprofit?
A.₱78,947
B.₱80,000
C.₱100,000
D.₱101,053
78.Ifprofitsandlossesaredividedusingthesimpleaverage,whatwouldbetheres
pectivesharesof
GlasieandGlorieintheprofit?(AssumethattheendingcapitalbalanceofGloriewa
s₱850,000)
A.₱74,483and₱105,517
B.₱77,143and₱102,857
C.₱76,696and₱103,304
D.₱80,000and₱100,000
79.Assumethatthepartnersagreedonthefollowing:interestonaveragecapitalat
8%;salariesof
24,000and48,000toGlasieandGlorie,respectively;bonustoGlasieat20%ofprof
itafterdeducting
interest,salariesbutbeforedeductingbonus;andanyremainingamountofthepro
fitistobedivided
equally.HowmuchistheshareofGlorieintheprofit?
A.₱68,000
B.₱74,483
C.₱90,000
D.₱112,000
80.Assumetheagreementsofthepartnersarethesameasin(79),exceptthatinter
estisequalto
12%oftheamountbywhichtheendingcapitalbalanceexceedsthebeginningbala
nce.Howmuchis
theshareofGlasieintheprofit?
A.₱68,000
B.₱74,483
C.₱90,000
D.₱112,000
CHAPTER3:PARTNERSHIPDISSOLUTION(CHANGESINTHEOWNERSHI
P)
1.Whatreferstothechangeintherelationcausedbyanypartnerceasingtobeasso
ciatedinthe
carryingonasdistinguishedfrom
thewindingupofthebusinessofthepartnership?
A.Formation
B.Operation
C.Dissolution
D.Liquidation
2.Whichofthefollowingresultsinthedissolutionofthepartnership?
A.Admissionofnewpartner
B.WithdrawalorDeathofapartner
C.Incorporationofpartnership
D.Allofthese
3.Whatreferstotheamountofcapitaltransferredbyonepartnertoanotherpartner/
s?
A.CapitalCredit
B.Bonus
C.Goodwill
D.AgreedCapital
4.Itreferstoanassetwithoutphysicalsubstancerecognizedonlywhenanenterpri
sebuysan
existingentityatpricehigherthanthefairvalueofthenetassetsoftheacquiredentit
y.Whatisit?
A.Goodwill
B.Bonus
C.CapitalCredit
D.AgreedCapital
5.Itreferstotheequityofthepartnersinthepartnershipobtainedbymultiplyingthet
otalpartnership
capitalbytheapplicablepercentageofinterestofthepartner.Whatisit?
A.Goodwill
B.Bonus
C.CapitalCredit
D.AgreedCapital
6.Apartnermaybeadmittedinthepartnershipbywhichofthefollowingways?
A.PurchaseofInterestfrom theexistingpartners
B.InvestmentofAssetsinthepartnership
C.PurchaseofInterestfrom theoutsidecreditorsofthepartnership
D.AandB
7.Thisprincipledictatesthatnoonebecomesapartnerwithouttheconsentofallpa
rtners.Whatisit?
A.DelectusPersonae
B.Egocentrism
C.Double-EntrySystem
D.Debit-creditformat
8.Thepaymentofnewpartnerinpurchasingofinteresttotheexistingpartnersofth
epartnershipis
__________
A.Madepersonallyanditisnotrecordedinthebooksofthepartnership
B.Madepersonallyanditisrecordedinthebooksofthepartnership
C.Madefortheintentionofincreasingthetotalpartners'equity
D.Madefortheintentionofdecreasingthetotalpartners‘equity
9.Whichofthefollowingiscorrectregardingadmissionofnew
partnerbyinvestingassetsinthe
partnership?
A.Investmentofassetsofnewpartnerwillincreasetotalassetsandtotalpartners’e
quity
B.Investmentofassetsofnewpartnerwilldecreasethetotalassetsandtotalpartn
ers'equity
C.Investmentofassetsofnewpartnerwillnotaffectthetotalassetsandtotalpartne
rs'equity
D.Investmentofassetsofnew
partnerwillresultintheincreaseintheobligationsofthe
partnership
10.Ifactualcontributionisgreaterthanthecapitalcreditofthenewpartner,then__
_______
A.Thereisabonustooldpartners
B.Thereisnobonustobegiven
C.Thereisabonustonewpartner
D.Thereisgoodwilltoberecognized
11.Ifactualcontributionislessthanthecapitalcreditofthenewpartner,then_____
__
12.Ifactualcontributionisthesameasthecapitalcreditofthenewpartner,then___
______
13.Thefollowingaresomereasonsforgrantingabonustonewpartnerexceptwhic
hone?
A.Extensivebusinessnetworkofthenewpartner
B.Earningrecordsofanentitythatwantstoadmitthenewpartner
C.Technicalskillsofthenewpartner
D.Vastfinancialresourcesofthenewpartner
14.Whichofthefollowingwillbeusediftheadmissionofnewpartnerbyinvestingas
setsdoesnot
haveaprovisiononwhichmethodshouldbeusedorwhentheproblem issilent?
A.Bonusmethod
B.Goodwillmethod
C.Nomethodtobeused
D.EitherAorB
15.Whichofthefollowingmethodscanbeusedtoaccomplishthewithdrawalorreti
rementofa
partner?
A.Bysellingtheinterestoftheretiringpartnertotheexistingpartners
B.Bysellingtheinterestoftheretiringpartnertothepartnership
C.Bysellingtheinterestoftheretiringpartnertotheoutsider
D.Allofthese
16.Ifthecashtobesettledtoretiringpartnerisgreaterthantohis/heractualinteresti
nthe
partnership,then_______
A.Theexcessamountwillbetreatedasbonustoremainingpartners
B.Theexcessamountwillbetreatedasbonustoretiringpartner
C.Theexcessamountwillberecognizedasgoodwillofanentity
D.Theexcessamountwillbeusedtosettletheliabilitiesofthepartnership
17.Ifthecashtobesettledtoretiringpartnerislessthantohis/heractualinterestinth
epartnership,
then________
A.Theexcessamountwillbetreatedasbonustoremainingpartners
B.Theexcessamountwillbetreatedasbonustoretiringpartner
C.Thedifferencewillberecognizedasgoodwilltotheretiringpartner
D.Theexcessamountwillbeusedtosettletheliabilitiesofthepartnership
18.Recognizingthegoodwilltotheretiringpartnerwillresultinthe________
A.Increaseintotalassetsandtotalpartners'equityofthepartnership
B.Increaseinequityoftheretiringpartnersothatthecashtobesettledtohim
willbecome
equaltohis/heractualinterestinthepartnership
C.Nochangesinthetotalassetsandpartner'sequity
D.Allofthese
19.Accountingproceduresforsettlingtheinterestofthedeceasedpartnertohis/h
erestateare
similarto________
A.Accountingproceduresforthewithdrawalofthepartner
B.Accountingproceduresfortheadmissionbyinvestmentofassets
C.Accountingproceduresfortheincorporationofpartnership
D.Accountingproceduresfortheadmissionbypurchaseofinterest
20.Whenthepartnershipdecidedtoincorporate,itsassetsandliabilities______
A.Aretransferredintocorporationinexchangeofstocks
B.Aresoldtothestakeholdersofthecorporation
C.Aresoldtotheoutsidecreditorsofthecorporation
D.Aretransferredtotheshareholdersofthecorporation
21.Whatreferstotheexcessofcarryingamountoftheassetovertherecoverablea
mount?
A.Impairmentofassets
B.Revaluationofassets
C.Purchaseofinterest
D.Capitalcredit
22.Whatreferstotheadjustmentofassetcarryingamountstofairvalueswhichma
yresultinan
increaseordecreaseoftheassetvalue?
A.Impairmentofassets
B.Revaluationofassets
C.Purchaseofinterest
D.Capitalcredit
23.Anydifferencebetweenthecarryingamountofcapitalofthedeceasedorretirin
gpartnerandthe
amounttobepaidtosettlehis/herequity_________
A.mayindicate thatsome assets orliabilities ofthe partnership were
overvalued or
undervalued
B.mayindicatethatthereisabonustoberecognizedtotheeitherretiringorremaini
ng
partners
C.mayindicatethatthereisgoodwilltoberecognizedtoretiringpartner
D.Allofthese
Foritems24-25
Sophiapurchasedone-
halfofJay'sinterestandshareinprofitintheJayandChrispartnershipby
payingJay180,000.BeforeSophia'sadmission,capitalbalancesofJayandChris
were240,000and
400,000,respectively.JayandChrisweresharingprofitsandlossesintheratioof2
:3,respectively.
24.WhatwouldbethecapitalbalanceofSophiaimmediatelyafterheradmission?
A.₱80,000
B.₱100,000
C.₱120,000
D.₱150,000
25.WhatwouldbethenewprofitandlossratiobetweenJay,ChrisandSophia,resp
ectively?
A.Jay,20%;Chris,30%;Sophia,50%
B.Jay,30%;Chris,30%;Sophia,40%
C.Jay,20%;Chris,40%;Sophia,40%
D.Jay,30%;Chris,60%;Sophia,10%
26.ThepartnershipagreementofDesireeandAdrianprovidesforequalsharingof
profitsandlosses.
PriortotheadmissionofNicks,thecapitalaccountsareDesiree,150,000andAdri
an,210,000.Nicks
invests180,000fora150,000interest.
HowmuchistheAdrian,CapitalimmediatelyaftertheadmissionofNicks?
A.₱210,000
B.₱220,000
C.₱225,000
D.₱275,000
Foritems27-28
LucasandMarcos,whoshareprofitsandlossesequally,agreetotakeJuanintothe
partnershipfora
40%shareincapitalandprofits.LucasandMarcosretain30%each.LucasandMa
rcoshavecapital
balancesof100,000and140,000,respectivelybeforetheadmissionofJuan.Jua
npays120,000
directlytoLucasandMarcosforhis40%interest.Allassetsofthepartnership,exce
ptlandarefairly
valued.
27.Byhowmuchwaslandundervalued?
A.₱50,000
B.₱60,000
C.₱70,000
D.₱90,000
28.WhatwouldbethecapitalbalanceofMarcosimmediatelyaftertheadmissionof
Juan?
A.₱100,000
B.₱102,000
C.₱110,000
D.₱125,000
Foritems29-30
Agnes,AngelaandAngelicaarepartnerssharingprofitsintheratioof3:3:2,respec
tively.OnJuly31,
theircapitalbalancesareasfollows:Agnes,₱280,000;Angela,₱200,000;andAn
gelica,₱160,000.
TheyagreetoadmitAndreaonthefollowingconditions:
•AndreaistopayAgnes₱200,000for1/2ofAgnes'interest
•Andreaistoinvest₱160,000inthepartnership
•Someassetsofthepartnershipareundervaluedby₱160,000
•Andrea'sinterestistobe25%
29.WhatwouldbethetotalpartnershipcapitalimmediatelyaftertheadmissionofA
ndrea?
A.₱880,000
B.₱920,000
C.₱960,000
D.₱1,100,000
30.WhatwouldbethecapitalbalanceofAgnesimmediatelyaftertheadmissionof
Andrea?
A.₱222,500
B.₱282,500
C.₱312,050
D.₱323,450
Foritems31-33
PartnersEllie,OllieandMillieagreedtoselltoTillieone-
fourthoftheirrespectivecapitalandprofit
andlossinterestforatotalcashpaymentof₱160,000.Thecapitalbalancesandthe
respective
percentageinterestintheprofitsandlossesimmediatelybeforethesaletoTillieare
asfollows:
Profit/loss-sharingratio Capitalbalance
Ellie 50% 320,000
Ollie 30% 180,000
Millie 20% 60,000
31.WhatwouldbethenewprofitandlossratioEllie,Ollie,MillieandTillie,respectiv
ely?
A.Ellie,37.5%;Ollie,22.5%;Millie,15%;Tillie,25%
B.Ellie,30%;Ollie,25%;Millie,20%;Tillie,25%
C.Ellie,25%;Ollie,25%;Millie,25%;Tillie,25%
D.Ellie,20%;Ollie,30%;Millie,25%;Tillie,25%
32.WhatwouldbethecapitalbalanceofOllieimmediatelyafterTillie'sadmission?
A.₱120,000
B.₱135,000
C.₱142,500
D.₱152,000
33.HowmuchwouldbereceivedbyElliefrom
thesaleofportionhisinteresttoTillie?
A.₱50,000
B.₱60,000
C.₱75,000
D.₱80,000
34.EgayandEgoewhoshareprofitsandlossesequallyhavecapitalbalancesof₱
200,000and
240,000,respectively.TheyadmitEngylfor1/3interestinthepartnershipcapitala
ndprofitsforan
investmentof₱260,000.
Byhowmuchwerethenetassetsundervalued?(Engyliscreditedforhiscapitalcon
tribution)
A.₱80,000
B.₱90,000
C.₱110,000
D.₱120,000
35.TessandShirleywhoshareprofitsandlossesequally,havecapitalbalancesof
₱170,000and
₱200,000,respectively.TheyagreedtoadmitGenfora1/3interestincapitalandpr
ofitsforher
investmentof₱200,000.Partnershipassetsarenotberevalued.
Howmuchofthe200,000wouldbecreditedtoTessandShirley,respectively?
A.Tess,₱5,000;Shirley,₱5,000
B.Tess,₱6,000;Shirley,₱4,000
C.Tess,₱8,000;Shirley,₱2,000
D.Tess,₱7,000;Shirley,₱3,000
Foritems36-38
Angela,BiancaandCiaraarepartnerswhoshareprofitsandlossesin3:2:1ratio.O
nDecember31,
2013,Angeladecidedtoretire.Atthattime,thepartners'capitalaccountbalances
were₱96,000,
₱84,000and₱144,000respectively.(Eachquestionisindependentfrom
eachother)
36.Thepartnersagreethattheinventorieshavecurrentfairvalueinexcessofcarry
ingvalueof
₱36,000.Afterthebookswereadjustedandreflectfairvaluesofassets,Angelarec
eivedcashequal
tothebalanceofhercapitalaccountatwhatamount?
A.₱114,000
B.₱112,000
C.₱120,000
D.₱135,000
37.Thepartnersagreedthatsomeassetswereundervaluedby₱36,000butdecid
ednottoadjustthe
bookstoreflectfairvalues.Theundervaluationofassets,however,isconsideredi
ncalculatingthe
amounttobepaidtoAngelainsettlementofherequity.Whatwouldbethecapitalbal
ancesof
BiancaandCiara,respectivelyaftertheretirementofAngela?
A.₱60,000and₱132,000
B.₱55,000and₱136,000
C.₱75,000and₱137,000
D.₱80,000and₱140,000
38.Thepartnersagreedthattheamountshownforinventorywas₱24,000moreth
anitscurrentfair
marketvalue.Afterreflectinginthebookstheadjustmentinthefairvalueofinventor
y,Angelawas
paidincashequaltothebalanceofhercapitalaccountatwhatamount?
A.₱84,000
B.₱96,000
C.₱100,000
D.₱125,000
Foritems39-40
MikeandTessarepartnerswithcapitalbalancesof₱70,000and₱50,000,respect
ively.Theyshare
profitsandlossesintheratioof3:1,respectively.Voceistobeadmittedintothepart
nershipfora
cashcontributionof₱60,000for1/2interestinthepartnershipcapitalandinthefutu
reprofitsand
losses.
39.IfVocewillbegivenacapitalcreditof₱90,000,howmuchwaschargedinthecap
italaccountof
Mike?
A.₱22,500
B.₱25,000
C.₱26,400
D.₱28,700
40.IfVocewillbegivenacapitalcreditof₱50,000,whatwouldbethecapitalbalanc
eofTessafter
Voce'sadmission?
A.₱62,500
B.₱80,000
C.₱90,000
D.₱100,000
41.MannyandJinkyarepartnerswithcapitalbalancesof₱30,000and₱40,000an
dsharingprofits
andlosses40%
and60%,respectively.Kristaistobeadmittedasapartnerbypaying₱20,000in
exchangefor50%ofManny'sequity.
HowmuchisthetotalinterestofMannyandJinky,respectively,afteradmissionofK
rista?
A.₱20,000and₱40,000
B.₱20,000and₱20,000
C.₱15,000and₱40,000
D.₱15,000and₱20,000
42.RhovilandMarkarepartnerswithprofitandlossratioof75:25andcapitalbalanc
esof₱100,000
and₱50,000,respectively.Gem
istobeadmittedtothepartnershipbypurchasinga20%interestin
thecapital,profitsandlossesfor60,000.
Assuming thatno assetrevaluation isto
bemade,thecapitalbalancesofRhoviland Mark,
respectively,aftertheadmissionofGem are:
A.₱80,000and₱40,000
B.₱100,000and₱50,000
C.₱112,000and₱38,000
D.₱120,000and₱60,000
43.Assumingthattheequipmentofthepartnershipisundervalued,thecapitalbala
ncesofRhovil,
MarkandGem,respectively,aftertheadmissionare:
A.₱100,000;₱50,000;₱60,000
B.₱170,000;₱70,000;₱60,000
C.₱192,500;₱77,500;₱30,000
D.₱800,000;₱40,000;₱30,000
44.Patriciacontributed₱24,000andCiaracontributed₱48,000toform
apartnershipandthey
agreedtoshareprofitsintheratiooftheiroriginalcapitalcontribution.Duringthefirs
tyearof
operations,theymadeaprofitof₱16,290;Patriciawithdrew₱5,050andCiarawith
drew₱8,000.At
thestartofthefollowingyear,theyagreedtoadmitGizelleintothepartnership.Gize
llewastoreceive
aone-
fourthofinterestincapitalandprofitsuponpaymentof₱30,000toPatriciaandCiar
awhose
capitalaccountsweretobereducedbytransfersofGizelle'scapitalaccountofamo
untssufficientto
bringthem backtotheiroriginalcapitalratio.
Howshouldthe₱30,000paidbyGizellebedividedbetweenPatriciaandCiara,res
pectively?
A.₱9,825and₱20,175
B.₱9,300and₱20,700
C.₱10,000and₱20,000
D.₱15,000and₱15,000
45.Siya,AkoandTayoarepartnerswithcapitalbalancesof₱224,000,₱780,000a
nd₱340,000,
respectively,sharingprofitsandlossesintheratioof3:2:1.Kamiisadmittedasane
w partner
bringingwithhim
expertiseandistoinvestcashfora25%interestinthepartnership,whichincludes
acreditof₱210,000bonusuponhisadmission.
HowmuchcashshouldKamicontribute?
A.₱168,000
B.₱390,000
C.₱450,000
D.₱600,000
Foritems46-47
Desiree,DeborahandDexterarepartnerssharingprofitsandlossesintheratioof5
:3:2,respectively.
AsofDecember31,2014,theircapitalbalanceswere₱285,000,₱240,000and₱1
80,000,respectively.
OnJanuary1,2015,thepartnersadmittedDonnalynasanew
partnerandaccordingtotheir
agreement,Donnalynwillcontribute₱240,000incashtothepartnershipandalso
pay₱30,000for
15%ofDeborah'sshare.Donnalynwillbegivena20%shareinprofitwhiletheorigi
nalpartners'share
willbeproportionatelythesameasbefore.AfteradmissionofDonnalyn,thetotalca
pitalwillbe
₱990,000andDonnalyn'scapitalwillbe₱210,000
46.Theamountofassetrevaluationis
A.₱21,000
B.₱45,000
C.₱66,000
D.₱111,000
47.TheamountofbonusintheadmissionofDonnalynwouldbe_______
A.₱66,000
B.₱33,000
C.₱36,000
D.₱19,800
Foritems48-49
One,TwoandThreeshareprofitsintheratioof2:3:5.OnJanuary20,Threeoptedto
retirefrom the
partnership.Thecapitalbalancesonthisdatefollow:
One ₱25,000
Two 40,000
Three 35,000
48.HowmuchwillbethecapitalofTwo,assumingThreesoldhisinteresttoTwofor1
0,000?
A.₱25,000
B.₱40,000
C.₱50,000
D.₱75,000
49.ByhowmuchshouldOne,Capitaldecrease,assumingThreeispaid39,000inf
ullsettlementof
hisinterest?
A.₱1,600
B.₱2,400
C.₱3,000
D.₱4,000
50.OnDecember30,2013,thestatementoffinancialpositionofDangerCompany
hadthefollowing
balances:Totalassets₱450,000;Willie,loan
₱25,000,Willie,capital₱103,750;Manny,capital
₱96,250andLoren,capital₱225,000.Thepartnersshareprofitsandlossesinther
atioof25%to
Willie,25%toMannyand50%toLoren.Willieretiresfrom
thepartnershipandthepartnershipassets
shallbeadjustedtotheirfairvaluesof₱510,000asofDecember31,2013.Thepart
nershipalso
sufferednetlossof₱150,000fortheyear2013.ThepartnershipwouldpayWillie₱
108,500cashfor
histotalinterestinthepartnership
WhatisthetotalcapitalofMannyafterretirementofWillieassumingtheuseofbonu
smethod?
A.₱73,000
B.₱73,750
C.₱76,000
D.₱76,750
Foritems51-55
Sy,TanandGoKongarepartnerswithcapitalbalancesof₱500,000,₱400,000an
d₱300,000,
respectively.Profitsandlosseshavebeensharedequally.GoKongwishestoretir
efrom thefirm.
(Eachitem isbeingtakenindependently)
51.GoKong'sinterestissoldtoConsunji,anew partnerfor₱360,000.How
muchisthetotal
partnershipcapitalafterGoKong'sretirementfrom thefirm?
A.₱900,000
B.₱1,160,000
C.₱1,200,000
D.₱1,500,000
52.GoKong'sinterestissoldtotheremainingpartners,eachpartnerpaying₱180,
000.Howmuchis
thecapitalofTanafterGoKong'sretirementfrom thefirm?
A.₱525,000
B.₱550,000
C.₱560,050
D.₱620,000
53.GoKong receives ₱340,000 ofpartnership funds forhis interest.The
excess paymentis
attributabletoanundervaluationofthefirm'sland.Allotherassetsarefairlyvalued.
Howmuchis
Sy'scapitalaftertheretirementofGoKong?
A.₱480,000
B.₱510,500
C.₱540,000
D.₱590,090
54.GoKongreceives₱380,000ofpartnershipfunds.Theremainingpartnersagre
etoabsorbthe
excesspaymenttoGoKong.Howmuchisthefirm'stotalcapitalaftertheretirement
ofGoKong?
A.₱790,000
B.₱820,000
C.₱870,000
D.₱920,000
55.GoKongreceives₱240,000ofpartnershipfundsforhisinterest,bonusbeingcr
editedtothe
remainingpartners'account.HowmuchisthecapitalofSyaftertheretirementofG
oKong?
A.₱505,000
B.₱512,000
C.₱520,000
D.₱530,000
Foritems56-60
AcondensedstatementoffinancialpositionpreparedfortheAAPartnership,own
edbyAlmaandAJ
atOctober31,2013isshownbelow.AlmaandAJinvitedAlonatotheirpartnership.
AlmaandAJ
havebeendividingprofitsandlossesintheratioof3:2,respectively,andthisratiowi
llcontinue
betweenthetwoaftertheadmissionofAlona.Thenthenewpartnershipwillhavea
profitandloss
ratioofAlona,50%;Alma,30%andAJ,20%.
AAPartnership
StatementofFinancialPosition
October31,2013
CurrentAssets ₱360,000 Liabilities ₱320,000
Property,PlantandEquipment 840,000 Alma,Capital 560,000
AJ,Capital 320,000
TotalAssets ₱1,200,000 TotalEquity ₱1,200,000
BelowarefiveconditionsunderwhichAlonamaybeadmittedintothepartnership.
56.Alonapurchasesone-halfequityinthepartnershipfrom
AlmaandAJfor₱550,000.Paymentisto
bemadedirectlytoAlmaandAJ.AlmaandAJeachwillretainone-
halfoftheirrespectiveequities
andtransfertheotherhalvestoAlona.How
muchwouldbethecapitalbalancesofAlmaandAJ,
respectivelyafterAlona'sadmission?
A.₱280,000and₱160,000
B.₱230,000and₱170,000
C.₱250,000and₱180,000
D.₱245,000and₱195,000
57.Alonainvests₱1,000,000tothepartnershipreceiving50%
interestinthepartnership.Byhow
muchwasthecapitalofAlmaincreased?
A.₱36,000
B.₱38,000
C.₱42,000
D.₱45,000
58.Alonainvests₱1,000,000tothepartnershipreceiving50%
interest.TheamountofAlona's
investmentimpliesthattheproperty,plantandequipmentwerecarriedatamountl
essthantheirfair
values.HowmuchwouldbethecapitalofAJaftertherevaluationofPPE?
A.₱312,000
B.₱320,000
C.₱368,000
D.₱390,000
59.Alonainvests₱600,000inthepartnershipreceiving50%
interestincapitalandincome.All
partnershipassetsandliabilitiesarefairlyvalued.How
muchistotalpartnershipcapitalafterthe
admissionofAlona?
A.₱1,050,100
B.₱1,325,000
C.₱1,420,050
D.₱1,480,000
60.Alonainvests₱720,000inthepartnershipandreceives50%
interestincapitalandprofit.The
bonustoAlonawillbechargedagainstAlmaandAJintheratioof3:2,respectively.
Howmuchwould
bethecapitalbalanceofAlmaaftertheadmissionofAlona?
A.₱512,000
B.₱525,000
C.₱615,000
D.₱640,000
61.RedandWhitearepartnerswhoshareprofitsandlossesintheratioof7:3,respe
ctively.OnJune
30,2013,theircapitalaccountswereasfollows:Red,₱700,000;White,₱600,000.
Onthatday,they
agreedtoadmitBlueasapartnerwithone-
thirdinterestinthecapitalandprofitsuponhisinvestment
of₱500,000.Allpartnershipassetsarefairlyvalued
ImmediatelyafterBlue'sadmission,whatarethecapitalbalancesofRed,Whitean
dBlue,respectively?
A.₱630,000;₱570,000;₱600,000
B.₱670,000;₱520,000;₱650,000
C.₱720,000;₱610,000;₱520,000
D.₱700,000;₱600,000;₱500,000
Foritems62-63
Daisywishestopurchaseone-
fourthinterestinthecapitalandprofitsinthepartnershipofMickey,
MinnieandDonald.Thethreepartnersagreedtosellone-
fourthoftheirrespectivecapitalandprofit
and lossinterestsforatotalpaymentof₱400,000.Thecapitalaccountsand
therespective
percentageinterestsintheprofitsandlossesimmediatelybeforethesaletoDaisyf
ollow:
CapitalBalance Profit/LossRatio
Mickey ₱800,000 40%
Minnie 400,000 30%
Donald 200,000 30%
Allassetsandliabilitiesofthepartnershiparefairlyvalued.
62.WhatshouldbethecapitalbalancesofMickey,Minnie,DonaldandDaisy,imm
ediatelyafter
Daisy'sadmission?
A.₱660,000;₱295,000;₱95,000;and₱350,000,respectively
B.₱600,000;₱300,000;₱150,000;and₱350,000,respectively
C.₱620,000;₱315,000;₱175,000;and₱300,000,respectively
D.₱690,000;₱310,000;₱125,000;and₱350,000,respectively
63.WhatisthenewprofitandlossratiobetweenMickey,Minnie,DonaldandDaisy,
respectively?
A.Mickey(25%);Minnie(25%);Donald(25%);Daisy(25%)
B.Mickey(40%);Minnie(30%);Donald(10%);Daisy(20%)
C.Mickey(30%);Minnie(30%);Donald(20%);Daisy(20%)
D.Mickey(30%);Minnie(22.5%);Donald(22.5%);Daisy(25%)
64.Bobotisadmittedtoapartnershipwith25%interestbyacashinvestmentof₱40
0,000.Ifthetotal
partnershipcapitalis₱1,400,000beforeadmittingBobot,howmuchisthebonust
oBobot?
A.₱40,000
B.₱45,000
C.₱50,000
D.₱65,000
65.ReyesandSantiagoarepartnerswhoshareprofitsandlossesintheratioof7:3,
respectively.On
January2,2014,theircapitalaccountsare:
Reyes ₱1,200,000
Santiago 800,000
Total ₱2,000,000
Duringthefirstthreemonthsof2014,thepartnershipearnedprofitof₱500,000.On
April1,2014,
Torresistobeadmittedfora30%interestinthepartnershipbydirectpurchasefrom
thepartnersfor
800,000.
Howshouldthe₱800,000cashbedividedbetweenReyesandSantiago?
A.₱400,000and₱400,000
B.₱500,000and₱300,000
C.₱600,000and₱200,000
D.₱700,000and₱100,000
Foritems66-67
JackandPoyarepartnerswhoprofitsandlossesintheratioof60:40,respectively.
OnDecember31,
2013,thecapitalbalancesofJackandPoywere₱800,000and₱700,000,respecti
vely.Onthatdate,
theyagreetoadmitHoyapartnerwitha30%capitalinterest.
66.IfHoyinvests₱500,000inthepartnership,whatisJack'scapitalbalanceimme
diatelyafterthe
admissionofHoy?
A.₱740,000
B.₱765,000
C.₱820,000
D.₱890,000
67.IfHoyinvests₱800,000inthepartnership,howmuchisPoy'scapitalbalancei
mmediatelyafter
Hoy'sadmission?
A.₱722,000
B.₱744,000
C.₱866,000
D.₱875,000
Foritems68-69
Bianca,CelineandDianaarepartnerssharingprofitsandlossesintheratioof3:2:1
,respectively.On
December31,Biancadecidestowithdraw from
thepartnership.Thecapitalbalancesonthisdate
afterdividingprofitfortheyearareBianca,₱346,000;Celine,₱213,000;andDiana
,₱133,000.Itis
agreedthatBiancashouldbepaid400,000forherinterest.
68.AssumethattheexcessamountpaidshallbetreatedasbonustoBianca,what
wouldbethe
capitalbalancesofCelineandDianaafterBianca'sretirement?
A.₱170,000and₱105,000
B.₱175,000and₱110,000
C.₱177,000and₱115,000
D.₱182,000and₱122,000
69.AssumeinsteadthatBiancaistobepaid₱310,000andthatassetsarefairlyvalu
ed.Whatwould
bethecapitalbalancesofCelineandDianaimmediatelyafterBianca'sretirement
?
A.₱237,000and₱145,000
B.₱254,000and₱135,000
C.₱345,000and₱162,000
D.₱370,000and₱172,000
70.R.Romero and S.Sandovalare partnerswho share profitsand lossesin
the ratio of7:3,
respectively.OnMay1,2013,theirrespectivecapitalbalanceswereasfollows:
R.Romero ₱900,000
S.Sandoval 800,000
Total ₱1,700,000
Onthatdate,theyagreedtoadmitQ.Quizonaspartnerfora40%interestinthecapit
alandprofits
uponhisinvestmentof₱800,000.Allassetsandliabilitiesofthepartnershiparefair
lyvalued.
ImmediatelyafterQ.Quizon'sadmission,whatwouldbethecapitalbalancesofR,
Romero,S.Sandoval
andQ.Quizon,respectively?
A.₱760,000;₱740,000;and₱1,000,000
B.₱780,000;₱760,000and₱800,000
C.₱790,000;₱780,000and₱1,000,000
D.₱820,000;₱790,000and₱1,100,000
71.CristineandCecillearepartnerswhoshareprofitsandlossesequally.Thecapit
alaccountsof
CristineandCecillehavedoubledinthreeyearsandatpresenthavethefollowingb
alances:
Cristine ₱1,100,000
Cecille 700,000
Ciaradesirestojointhefirm andofferedtoinvest₱600,000forone-
thirdinterest.CristineandCecille
declinedhisofferbuttheyextendedacounter-
offerwithCiarainvesting₱800,000forone-fourth
interestinthecapitalandprofitsandlossesofthefirm.
IfCiaraacceptedtheiroffer,whatshouldbethecapitalbalancesofCristineandCec
illeafterCiara's
admission?
A.₱1,125,000and₱735,000
B.₱1,330,000and₱740,000
C.₱1,175,000and₱775,000
D.₱1,440,000and₱780,000
72.Arthur,Bernieand Carlo arepartnerswho shareprofitsand lossesin
theratio of5:3:2,
respectively.Theyagreetosell25%oftheirrespectivecapitalandprofitandlossrat
iotoDwightfora
totalpaymentdirectlytothepartnersintheamountof₱130,000.Thecondensedst
atementof
financialpositionoftheABCPartnershipisasfollows:
Cash ₱60,000 Liabilities ₱100,000
Non-Cashassets 540,000 Arthur,Capital 250,000
Bernie,Capital 150,000
Carlo,Capital 100,000
Total ₱600,000 Total ₱600,000
WhatwouldbethecapitalbalancesofArthur,BernieandCarloaftertheadmission
ofDwight?
A.₱175,500;₱110,000;and₱70,000
B.₱185,550;₱105,000;and₱75,000
C.₱187,500;₱112,500;and₱75,000
D.₱190,500;₱124,000;and₱85,000
73.HowardandIvanarepartnerswithcapitalbalancesof₱300,000and₱250,000
sharingprofits
andlosses3:1,respectively.TheyagreedtoadmitJasperaspartner.Jasperinves
ts₱150,000fora
40%interestinthefirm.HowardandIvantransferpartoftheircapitaltoJasperasbo
nus.
WhatwouldbethecapitalbalancesofthepartnersafterJasper'sadmission?
A.₱202,500;₱217,500;and₱280,000,respectively
B.₱210,500;₱220,000;and₱280,000,respectively
C.₱225,500;₱225,550;and₱260,000,respectively
D.₱230,000;₱230,000;and₱270,000,respectively
74.OliverandPatrickarepartnerswithaprofitandlossratioof3:1andcapitalbalan
cesof
₱1,000,000and₱500,000,respectively.Nicksistobeadmittedintothepartnershi
pbypurchasinga
20%interestinthecapital,profitsandlossesfor₱500,000.
WhatwouldbethecapitalbalancesofOliverandPatrickaftertheadmissionofNick
s?
A.₱800,000and₱400,000,respectively
B.₱700,000and₱300,000,respectively
C.₱950,000and₱350,000,respectively
D.₱980,000and₱450,000,respectively
75.ThecapitalaccountsforthepartnershipofUlyssesandVoltaireonSeptember
1,2013areas
follows:
Ulysses,Capital ₱800,000
Voltaire,Capital 400,000
Thepartnersshareprofitsandlossesintheratioof6:4,respectively.Thepartnersh
ipisindesperate
needofcash,andthepartnersagreetoadmitWalterasapartnerwitha1/3interesti
nthecapitaland
profitsandlossesuponhisinvestmentof₱300,000.
ImmediatelyaftertheadmissionofWalter,whatwouldbethecapitalbalancesofUl
ysses,Voltaire
andWalter?
A.₱670,000;₱340,000;and₱500,000,respectively
B.₱675,000;₱335,000;and₱300,000,respectively
C.₱680,000;₱320,000;and₱500,000,respectively
D.₱720,000;₱350,000;and₱300,000,respectively
76.CordovaandDecenaarepartnerswhoshareprofitsandlossesequally.Theca
pitalaccountsof
CordovaandDecenaare₱90,000and₱60,000,respectively.Eleriadesirestojoi
nthefirm and
invested₱70,000fora1/4interestinthecapitalofthefirm.
WhatwouldbethebalancesinthecapitalaccountsofCordovaandDecenaafterEl
eria'sadmission?
77.OnJuly1,2015,thestatementoffinancialpositionforthepartnershipofKarl,Le
sterandMiles
withtheirrespectiveprofitandlossratiowasasfollows:
Assets,atcost ₱1,800,000
Karl,Loan ₱90,000
Karl,Capital 420,000
Lester,Capital 390,000
Miles,Capital 900,000
Karldied.Thepartnershipwouldsettlehisinterestwithhisheirs.Bymutualagreem
ent,theassets
aretobeadjustedtotheirfairmarketvalueof₱2,160,000atJuly1,2013.Itwasagre
edthatthe
partnershipwouldpayKarl'sheirs₱650,000cashforhisinterestincludingKarl'slo
anwhichistobe
repaidinfull.
AftersettlementwithKarl'sheirs,whatwouldbetherespectivecapitalbalancesof
LesterandMiles?
A.₱440,000and₱1,055,000,respectively
B.₱445,000and₱1,065,000,respectively
C.₱550,000and₱1,100,000,respectively
D.₱575,000and₱1,125,000,respectively
78.Angela,apartneroftheaccountingfirm ABC
andCompanydecidedtowithdraw from the
partnership.Angelahad30%shareintheprofitsandlosses.InfinalsettlementofA
ngela'sinterest,
thepartnershippaidher₱86,000althoughhercapitalbalancebeforeherretireme
ntwasonly
₱80,000.The₱6,000differenceimpliedthatanequipmentwasundervaluedforw
hichanappropriate
adjustmentwastakenupinthebooksofthepartnership.Thetotalofthepartners'ca
pitalbefore
Angela'swithdrawalandbeforetheadjustmentofequipmenttofairvaluewas₱27
0,000.
Whatwouldbethepartnership'snetassetsafterthewithdrawalofAngela?
A.₱200,500
B.₱202,550
C.₱204,000
D.₱210,000
79.Aseng,LarengandLelangarepartnerssharingprofitsintheratioof3:2:1,respe
ctively.Capital
accountsare₱500,000;₱300,000;and₱200,000onDecember31,2015,whenL
elangdecidesto
withdraw.Itisagreedtopay₱300,000forLelang'sinterest.Profitsaftertheretirem
entofLelangare
tobesharedequally.
WhatarethecapitalbalancesofAsengandLarengaftertheretirementofLelang?
A.₱330,000and₱236,000
B.₱375,000and₱240,000
C.₱425,000and₱250,000
D.₱440,000and₱260,000
80.PartnersSantos,Salongaand Salazarshareprofitsand
losses50:30:20,respectively.The
statementoffinancialpositionofthepartnershipatJuly31,2016follows:
Cash ₱40,000 AccountsPayable ₱100,000
Otherassets 360,000 Santos,Capital 74,000
Salonga,Capital 130,000
Salazar,Capital 96,000
Total ₱400,000 Total ₱400,000
Theassetsandliabilitiesarerecordedandpresentedattheirrespectivefairvalues
.Santanaistobe
admittedasanew partnerwitha20% capitalinterestanda20%
shareofprofitsandlossesin
exchangeforacashcontribution.
HowmuchshouldSantanacontribute?
A.₱70,000
B.₱72,000
C.₱75,000
D.₱78,000
CHAPTER4:PARTNERSHIPLIQUIDATION
1.Whatreferstothewindingupofpartnershipbusinesscharacterizedbysaleofno
n-cashassets,
settlementofliabilitiesanddistributionofcashtopartners?
A.Formation
B.Operation
C.Dissolution
D.Liquidation
2.Ifthepartnershipliquidationiscompletedwithinareasonablyshortperiodoftime
suchthatthe
non-
cashassetsareimmediatelyrealizedandcashisimmediatelydistributedtocredit
orsand
partners,_________takesplace.
A.Lump-sum liquidation
B.Installmentliquidation
C.Partnershipliquidation
D.Corporateliquidation
3.Ifthepartnershipliquidationextendsoveraconsiderableperiodoftimebecause
ofthedifficultyof
convertingallnon-cashassetsintocash,________takesplace.
B.Installmentliquidation
C.Partnershipliquidation
D.Corporationliquidation
4.Whichofthefollowingmightbeareason/sofliquidatingapartnership?
A.Apartnershipwasorganizedwithafixedterm
B.Anagreementofallpartnerstovoluntarilyterminatetheiroperation
C.Apartnershiporganizedforaspecificundertakingorpurpose
D.Allofthese
5.Whatreferstotheprocessofconvertingofnon-cashassetsintocash?
A.Liquidation
B.Realization
C.Dissolution
D.Conversion
6.Whatcharacteristicsofapartnershipjustifytheabsorptionofbyotherpartnersof
thedeficiency
thatcannotbemadegoodbyaninsolventpartner?
A.Limitedlifeandmutualagency
B.Limitedlifeandco-ownershipofproperty
C.Mutualagencyandpartnershipnon-taxability
D.Mutualagencyandunlimitedliability
7.Inthefinalliquidationtransaction,theremainingcashisdistributedtothepartner
s.Thepartners'
shareinthecashdistributionisaccordingtotheir_________
A.Capitalbalances
B.Cashbalances
C.Profit-sharingratios
D.Withdrawals
8.Whichofthefollowingtransactionswouldnottakeplaceinthepartnershipliquid
ation?
A.Apartnersettleshisdeficiencybycontributingcash
B.Apartnersettleshisdeficiencybycontributingnon-cash
C.Apartnersettleshisdeficiencybydeclaringbankruptcy
D.Theotherpartnersabsorbsapartnerdeficiency
9.Adeficiencyinthecapitaloftheinsolventpartneris_______
A.Alosstotheotherpartners
B.Againtotheotherpartners
C.Theresultofthelossofoperations
D.Theresultofthesaleofnon-cashassetsatagain
10.Theprocessofliquidationofapartnershipincludesallthefollowingsteps,exce
ptwhichone?
A.Distributingtheremainingcash
B.Obtainingcourtapproval
C.Payingthepartnershipliabilities
D.Sellingtheassets
11.Theorderofthepartnershipliquidationprocessis_________
A.distributecashtopartners,payliabilities,sellassets
B.payliabilities,sellassets,distributecashtopartners
C.sellassets,distributecashtopartners,payliabilities
D.sellassets,payliabilities,distributecashtopartners
12.Inapartnershipliquidation,againfrom
thesaleofassetsiscreditedtothe________
A.partnerswiththelowestcapitalbalance
B.partnersbasedontheprofit-sharingratio
C.partnersbasedontheircapitalbalances
D.partnershipliabilities
13.Inthefinalpartnershipliquidationtransaction,remainingcashisdistributedto_
_______
A.partnersbasedonthecapitalbalances
B.partnersbasedontheprofit-sharingratios
C.thepartnerswiththegreatestcapitalbalance
D.thepartnerswiththelowestcapitalbalance
14.TheABCPartnershipisterminatedwhentheclaimsofcompanycreditorsexce
edpartnership
assetsby50,000.ThecapitalbalancesofA,BandCare35,000;5,000;and(90,000
),respectively.Who
amongthepartnersis/arepersonallyandindividuallyliableforallpartnershipliabili
ties?
A.A
B.B
C.AandB
D.A,BandC
15.Intheliquidationofthepartnership,thegainsandlossesfrom
assetssoldare________
A.dividedequallyamongthepartners
B.dividedamongthepartnersinthestatedincomeratio
C.dividedamongthepartnersinproportiontotheircapitalequityinterests
D.ignored
16.Whatreferstotheexcessofapartner'sshareoflossesoverhiscapitalcreditbal
ance?
A.Capitaldeficiency
B.Insolvency
C.Deficitbalance
D.Solvency
17.Apartnerwhosepersonalassetsaremorethanhispersonalliabilitiesiscalled_
__________
A.Solventpartner
B.Insolventpartner
C.Liquidatingpartner
D.Secretpartner
18.Apartnerwhosepersonalassetsislessthanhispersonalliabilitiesiscalled___
_____
A.Solventpartner
B.Insolventpartner
C.Liquidatingpartner
D.Secretpartner
19.Itistherightofthepartnershiptodeductimmediatelythepartner'scapitaldefici
encyfrom the
partner'sloantothepartnership,sothatonlythenetamountwouldbepaidtothepar
tnerin
settlementofhisinterest.Whatisit?
A.Rightofoffset
B.Rightofthepartners
C.Rightofthesolventpartner
D.Rightofthepartnership
20.Itisastatementpreparedtosummarizetheprocessofliquidatingthepartnershi
p.Whatisit?
A.StatementofChangesinEquity
B.StatementofLiquidation
C.StatementofFinancialPosition
D.StatementofComprehensiveIncome
21.Ifapartnerisinsolvent,hispersonalpropertiesshallbefirstdistributed______
_
A.topartnershipcreditors
B.tothepartnersbywayofadditionalcontributionswhentheassetsofthepartners
hipwere
insufficienttosettleallobligations
C.topartnershipandseparatecreditorsintheratiooftheirloanexposures
D.toseparatecreditors
22.Inapartnershipliquidation,theassetsofthepartnershipshallbeappliedlastlyt
o________
A.thoseowingtheoutsidecreditors
B.thoseowingtothepartnerswithrespecttotheirshareintheprofits
C.thoseowingtothepartnerswithrespecttotheircapitalcontribution
D.thoseowingtoinsidecreditorsintheform
ofloansoradvancesforbusinessexpensesby
thepartners
23.Whichofthefollowingstatementsiscorrectregardingapartner'scapitaldeficie
ncy?
A.Partnerswhoabsorbanother'scapitaldeficiencyhavealegalclaim
againstthedeficient
partner
B.Thepartnershouldcontributetoreducethedebitbalancetotheextentpossible
C.Ifcontributionsarenotpossible;theotherpartnerswithcreditcapitalbalanceswi
llbe
allocatedaportionofdebitbalance
D.Allofthesestatementsarecorrect
24.Thefollowingistheprioritysequenceinwhichliquidationproceedswillbedistri
butedfora
partnership
A.Partnershipliabilities,partnershiploansandpartnershipcapitalbalances
B.Partnership drawings,partnership liabilities,partnership loansand
partnership capital
balances
C.Partnership liabilities,partnership loans,partnership drawingsand
partnership capital
balances
D.Partnershipliabilities,partnershipcapitalbalancesandpartnershiploans
25.Claimsagainstpartner'spersonalassetsbycreditorsifthepartnershipcan'tpa
ydebtsrefersto
_______
A.Liquidation
B.Dissolution
C.Mutualagency
D.Unlimitedliability
26.Statement1:Aresultingcapitaldeficiencyafterrealizationindicatesthatthepa
rtner'scapital
beforeliquidationisnotsufficienttocoverhisshareinthelossonrealization
Statement2:Inpartnershipliquidation,anygainsorlossesonthesaleofnon-
cashassetsmust
bedividedequallyamongthepartners.
26.Statement1:Inliquidation,cashshouldbedistributedtopartnersonthebasisof
partners'profit
andlossratio
Statement2:Onlycashcanbedistributedtothepartnersupontheliquidationofthe
partnership
28.Statement1:Theprocessofliquidatingthepartnershipissummarizeinthestat
ementof
partnershipliquidation
Statement2:Afterthedistributionofcashtothe partnersinalump-sum
liquidation,the
businesshasnoassets,liabilitiesorowner'sequity.
29.Statement1:Thegeneralpartnersshallabsorbthecapitaldeficiencythatcann
otmadegoodby
aninsolventpartner
Statement2:Partnershipdissolutionalwaysleadstopartnershipliquidation
30.Statement1:Instatementofpartnershipliquidation,assetsaregenerallyclass
ifiedascashand
non-cashassets
Statement2:Whenadeficientpartnerhasaloanbalancetothepartnership,thedef
iciencyshall
besetoffagainsttheloanatthehigherbetweentheloanbalanceandthecapitaldefi
ciency.
31.Aliquidationdiffersfrom dissolutioninthattheliquidation
A.assetsmayberevalued
B.thebusinesswillnotcontinue
C.theremaybeanadjustmentofpartners'capitalaccounts
D.gainsandlossesaretodistributedaccordingtothepartnershipagreement
32.Apartner'slossabsorptionbalanceiscalculatedby_______
A.dividingthepartner'scapitalbalancebythepercentageinterestincapital
B.multiplyingdistributableassetsbythepartner'sprofitsharingpercentage
C.dividingthepartner'stotalinterestsbyhisprofitandlosssharingpercentage
D.multiplyingthepartner'stotalinterestsbyhisprofitandlosssharingpercentage
33.Inaccountingforliquidationofpartnership,cashpaymenttopartnersafterallou
tsidecreditors'
claimshavebeensatisfiedbutbeforefinalcashdistribution,shouldbeaccordingto
A.Relativeprofitandlosssharingratio
B.Safepaymentscomputation
C.Thefinalbalancesinpartners'capitalaccounts
D.Therelativeshareingainorlossinliquidation
34.Whichofthefollowingisnotcorrectregardingwithrespecttoaninstalmentliqui
dationofa
partnership?
A.Allremainingliquidationexpensesareanticipated
B.Allnon-cashassetsareassumedtobeworthless
C.Distributiontopartnersarealwaysmadeaccordingtotheirprofitsharingpercen
tage
D.Partnerswiththegreatestabilitytoabsorblossesandexpensesarethefirsttore
ceive
instalmentdistribution
35.Inapartnership liquidation,thefinalcashdistributionto thepartnersshould
bemadein
accordancewiththeir______
A.Safepaymentscomputation
B.Partner'sprofitandlosssharingratio
C.Balancesofpartners'capitalaccounts
D.Ratioofthecapitalcontributionsbypartners
36.Inaliquidation,theliabilitiesofthepartnershipshouldbepaid_______
A.Beforeanysaleofassets
B.Beforethedistributionofcashtopartners
C.Beforethedistributionofgainsandlossesonthedisposalofassets
D.Afterarevaluationofassets
37.Whichofthefollowingassumptionsis/areconsideredinpreparingascheduleo
fsafepayments?
A.Inabilitytodisposetheremainingnon-cashassets
B.Insolvencyofthepartnership
C.Failuretomakeadditionalcashcontributionofpartnerswithcapitaldeficiency
D.AandC
38.Whichofthemethodswillbemostlikelyusefulinensuringtheequitabledistribut
ionofcashto
partnersassumingthattherealizationofnon-
cashassetsmighttakeforalongperiodoftime?
B.Scheduleofsafepayments
C.Cashpriorityprogram
D.Saleofnon-cashassets
39.Itreferstothemaximum
lossthatthepartnercanabsorbwithoutreducingtheequitybelowzero.
Whatisit?
A.Lossabsorptionbalance
B.Scheduleofsafepayments
C.Cashpriorityprogram
D.Lump-sum liquidation
40.Thesaleofnon-cashassetsmayresultin_____
A.gains
B.losses
C.eithergainsorlosses
D.neithergainsorlosses
Foritems41-42
CelineandDionarepartnerswithcapitalbalancesof24,500and15,500,respectiv
ely.Theyshare
profitsandlossesintheratioof3:2,respectively.Thepartnersdecidedtoliquidatet
heirpartnership.
Thefirm'sliabilitiesamountto₱36,000including₱4,000owingtoCelineand₱3,5
00owingtoDion
Aftertherealizationofassets,thecashonhandamountedto₱37,500
41.Howmuchwasthelossonrealization?
A.₱38,500
B.₱37,500
C.₱36,500
D.₱34,450
42.HowmuchshouldCelineandDionreceiveinfinalsettlementoftheirrespectivei
nterest?
A.Celine,₱5,600;Dion,₱3,800
B.Celine,₱5,400;Dion,₱3,600
C.Celine,₱1,400;Dion,₱100
D.Celine,₱1,440;Dion,₱110
Foritems43-45
Diana,EllaandFrancinearepartnerswithaprofitandlossratioof5:4:1,respectivel
y.Thepartnership
istobeliquidated.Priortotheliquidation,thestatementoffinancialpositionshowst
hefollowing
balances
OtherAssets 180,000 Diana,Capital 80,000
Ella,Capital 60,000
Francine,Capital 40,000
Total ₱200,000 Total ₱200,000
Afterrealization,Ellareceived₱30,000assettlementofherinterest.
43.Howmuchwasthelossonthesaleofassets?
A.₱73,000
B.₱74,000
C.₱75,000
D.₱77,000
44.HowmuchdidFrancinereceiveinfinalsettlementofherinterest?
A.₱32,500
B.₱30,000
C.₱40,000
D.₱42,500
45.Whatamountoftotalcashwasdistributedtothepartners?
A.₱125,000
B.₱105,000
C.₱120,000
D.₱110,000
Foritems46-47
ThestatementoffinancialpositionofLeslie,MilesandNicolejustbeforetheliquida
tionshowsthe
following
Cash ₱5,000 AccountsPayable ₱10,000
Non-Cashassets 60,000 Nicole,Loan 10,000
Leslie,Capital 15,500
Miles,Capital 22,000
Nicole,Capital 7,500
Total ₱65,000 Total ₱65,000
Leslie,MilesandNicoleshareprofitsandlossesintheratioof3:2:5,respectively.T
henon-cash
assetsweresoldfor₱40,000
46.Howmuchcashisavailablefordistributiontopartnersinsettlementoftheircapit
albalances?
A.₱33,450
B.₱34,000
C.₱35,000
D.₱37,500
47.HowmuchcashisreceivedbyNicoleinfullsettlementofhertotalinterestsinthe
partnership,
includingloan?
A.₱7,500
B.₱9,500
C.₱10,500
D.₱18,000
Foritems48-50
PartnersDesiree,AngelaandIrishwhoshareprofitsandlossesintheratioof2:2:1,
respectively
decided to liquidate.The condensed statementoffinancialposition
immediatelypriorto the
liquidationshowsthefollowing:
Non-cashassets 400,000 Desiree,Loan 10,000
Desiree,Capital 45,000
Angela,Capital 105,000
Irish,Capital 200,000
Total ₱500,000 Total ₱500,000
Afterpayingliabilitiestopartnershipcreditors,cashof₱207,500isavailablefordist
ributionto
partners.Anycapitaldeficiencyismadegoodbythedeficientpartner,sinceallthre
epartnersare
personallysolvent.
A.₱140,000
B.₱145,550
C.₱150,500
D.₱152,500
49.HowmuchwouldAngelareceiveinfinalsettlementofherinterest?
A.₱44,000
B.₱48,000
C.₱52,000
D.₱61,000
50.HowmuchwouldIrishreceiveinfinalsettlementofherinterest?
A.₱168,000
B.₱169,500
C.₱171,050
D.₱173,000
Foritems51-52
BrunoandMarsarepartners.Theyshareprofitsandlossesintheratioof3:7,respe
ctively.The
businesshasbeenencounteringfinancialdifficultieslately.Thepartnerstherefor
e,mutuallyagreed
toliquidatethebusiness.ImmediatelybeforeliquidationproceedingsstartedonM
arch31,2013,the
ledgeraccountsofthepartnersshowedthefollowingbalances:
Debit Credit
Bruno,Drawing ₱30,000
Bruno,Capital ₱280,000
Mars,Drawing 40,000
Mars,Capital 400,000
Atthistime,therecordsshowthatthetotalpartnershipassetsare₱910,000,ofwhic
h₱60,000is
cash.Afterthenon-
cashassetsweresoldandthecashsettlementwascompleted,Marswastrying
tofigureoutwhyhereceivedonly₱66,000.
51.Howmuchwasthegainorlossonrealization?
A.₱420,000,gain
B.₱420,000,loss
C.₱430,000,gain
D.₱430,000,loss
52.HowmuchwasthecashsettlementtoBruno?
A.₱123,000
B.₱124,000
C.₱125,000
D.₱127,000
Foritems53-55
Nicole,Rio,AililandKarenarepartnerssharingprofitsintheratio3/21,4/21,6/21a
nd8/21,
respectively.Theircapitalbalancesareasfollows:
Nicole ₱10,000 Ailil ₱250,000
Rio 250,000 Karen 90,000
Thepartnersdecidetoliquidate.Theyconvertedthenon-
cashassetsinto₱233,000cash.After
payingtheliabilitiesamountingto₱30,000,theyhave₱222,000todivide.Assume
thatadebit
balanceofanypartner'scapitalaccountisuncollectible.
53.Howmuchwastheamountofcashbeforetheconversionofnon-cashassets?
A.₱19,000
B.₱22,000
C.₱25,000
D.₱32,000
54.Howmuchwasthebookvalueofthenon-cashassets?
A.₱611,000
B.₱623,000
C.₱712,000
D.₱733,000
55.HowmuchwasreceivedbyRioinfinalsettlement?
A.₱138,800
B.₱168,220
C.₱127,330
D.₱178,000
Foritems56-57
Ryan,IvanandMarkarepartnerssharingprofitsandlossesintheratioof1:1:2,resp
ectively.They
decidedtoliquidatethebusiness.Theassetsweresoldandliabilitiesamountingto
₱20,000were
paid.Atthispoint,thecapitalbalancesofthepartnersareasfollows:
Debit Credit
Ryan ₱20,000
Ivan ₱15,000
Mark 30,000
Ivanispersonallyinsolvent
56.Howmuchisthecashavailablefordistributiontopartners?
A.₱15,000
B.₱35,000
C.₱55,000
D.₱65,000
57.HowmuchcashwouldreceivebyRyanandMark?
58.ConnieandMiriam
arepartnerssharingprofitsandlossesintheratioof7:3,respectively.On
October1,2013,theydecidedtoliquidatethebusinesswhentheaccountbalance
sare:
Non-Cashassets 150,000 Connie,Capital 90,000
Miriam,Capital 60,000
Total ₱200,000 Total ₱200,000
Duringthesamemonth,thenon-cashassetsweresoldfor₱100,000.
Afterpayingtheliabilities,ConnieandMiriam,infinalsettlementoftheirinterestwo
uldreceivecash
of
59.Lito,RayandRonniedecidedtoliquidatetheirpartnership.Non-
cashassetsweresoldfor
₱128,000andallcreditorswerepaid.Profitsharingratioswere:20%,30%
and50%,respectively.
Balancesineachcapitalaccountbeforeandafterthesalefollow:
Lito Rey Ronnie
Beforethesale ₱48,000 ₱12,000 ₱62,000
Afterthesale 32,800 10,800 24,000
Thecarryingamountoftheassetssoldis_______
A.₱60,400
B.₱182,400
C.₱195,600
D.₱204,000
Foritems60-61
PartnersArnieandJovywhohavebeendividingprofitsandlossesintheratioof3:2,
respectively
decidedtoliquidatetheirpartnership.Capitalbalancesbeforeliquidationwas:An
nie,₱40,000;and
Jovy,₱30,000.Afterpayinginfullliabilitiesof₱30,000,theyhave₱49,000cashtod
ivide.
A.₱9,000
B.₱21,000
C.₱51,000
D.₱89,000
61.Infullsettlementoftheirequities,AnnieandJovymustreceivecashof_______
Foritems62-63
Inapartnershipliquidation,balancespriortothedistributionofcashtothepartners
are:Cash,
₱240,000;Mikee,Capital,₱112,000;Teeny,Capital,₱104,000;andJenny,Capit
al,₱24,000.The
incomeratiois6:2:2,respectively.
62.HowmuchcashshouldbedistributedtoMikee?
A.₱100,000
B.₱109,000
C.₱112,000
D.₱120,000
63.Assumethatthereisonly₱204,000incashandJennyhasacapitaldeficiencyof
₱12,000.How
muchcashshouldbedistributedtoTeeny?
A.₱98,000
B.₱101,000
C.₱95,000
D.₱104,000
Foritems64-65
Lorna,AidaandFedecidedtodissolvetheirpartnershiponAugust31,2013.They
havebeendividing
profitsandlossesintheratioof40%;30%;30%,respectivelyandtheircapitalbalan
cesasofJanuary
1,2013wereasfollows:
Lorna ₱75,000
Aida 90,000
Fe 30,000
TheoperationsofthepartnershipfortheperiodJanuary1-
August31resultedtoaprofitof₱66,000.
AsofAugust31,2013,cashbalanceis₱60,000andtheliabilitiesare₱135,000.
64.ThetotalpartnershipassetsasofAugust31,2013are________
A.₱396,000
B.₱336,000
C.₱330,000
D.₱261,000
65.ForLornatoreceive₱60,000infinalsettlementofherequity,thenon-
cashassetsmustbesold
for________
A.₱157,500
B.₱232,500
C.₱255,000
D.₱358,500
66.D,TandM
PartnershipbecameinsolventonDecember31,2013andistobeliquidated.D,Ta
nd
M
havethefollowingcapitalbalancesrespectively,₱65,000;(₱30,000);(₱4,000).A
fterpayingtheir
personalliabilities,Dhad₱10,000whileThad₱15,000oftheirpersonalassets.Ho
wever,M hadstill
unpaidpersonalliabilitiesamountingto₱40,000andhispersonalassetsamounte
donlyto₱30,000.
Thepartnersshareprofitsandlossesequally.
Howmuchisthemaximum amountthatDcanexpecttoreceivefrom
thepartnership?
A.₱31,000
B.₱35,000
C.₱46,000
D.₱61,000
67.DD,EEandFFdecidedtodissolvethepartnershiponJuly31,2013.Theircapita
lbalancesand
profitratioonthisdatefollow:DD,₱33,600(45%);EE,₱43,200(25%);FF,₱19,20
0(30%).Thenet
incomefrom
January1toJuly31,2013was₱7,200.Also,onthisdate,cashandliabilitieswere
₱25,200and₱34,800,respectively.FFreceived₱24,960infullsettlementofhisin
terest.
Whichofthefollowingstatementsistrue?
A.₱115,200wasrealizedfrom thesaleofnon-cashassets
B.DDreceived42,240infullsettlementofhisinterest
C.₱124,800wasthetotaldistributiontotheoutsidersandtothepartners
D.EE'sshareinthelossonrealizationwas₱3,000
68.TheaccountsofthepartnershipofReyes,SantiagoandTorresattheendofitsfi
scalyearon
November30,2013areasfollows:
Othernon-cashassets 707,500 Loanfrom Santiago 20,000
LoantoReyes 15,000 Reyes,Capital(30%) 266,250
Santiago,Capital(50%) 136,250
Torres,Capital(20%) 141,250
TotalAssets ₱826,250 TotalAssets ₱826,250
Santiagoreceived₱50,000insettlementofhisequity.
Whichofthefollowingstatementsisincorrect?
A.Totalamountdistributedtopartnersis₱336,250
B.Totalamountpaidtocreditorsis₱262,500
C.Totalamountrealizedfrom thenon-cashassetsis₱598,750
D.Reyesreceivedanamountequalto₱187,500
69.OnJanuary31,2013,ACJPartnershipenteredintoliquidation.Thepartners'p
rofitsharingand
capitalbalancesonthisdatewereasfollows:Alicia(25%),₱2,500,000;Celine(35
%),₱5,400,000;
Jessica(40%),₱3,700,000.Thepartnershiphasliabilitiesamountingto₱4,400,0
00,includingaloan
from Celine₱600,000.Cashonhandpriortotheliquidationprocessis₱800,000.
Non-
cashassetsamountingto₱7,400,000weresoldattheircarryingamountandthere
stofthenoncashassetsweresoldatalossof₱
4,200,000.
29.Howmuchcashwillbedistributedtothepartners?
A.₱4,400,000
B.₱7,400,000
C.₱8,000,000
D.₱11,800,000
70.OnJanuary1,2013,ACJPartnershipenteredintotheliquidation.Thepartners
hipcapitalbalances
onthisdatewereasfollows:Angela(25%),₱2,500,000;Cristine(35%),₱5,400,0
00;Jechelle(40%),
₱3,700,000.Thepartnershiphasliabilitiesamountingto₱4,400,000,includingal
oanfrom Cristine
₱600,000.Cashonhandbeforethestartofliquidationis₱800,000
Cristinereceived₱2,255,000infullsettlementofherinterest.
Howmuchwasthelossfrom therealizationofthenon-cashassets?
A.₱5,255,000
B.₱9,945,000
C.₱10,525,000
D.₱10,700,000
71.ThecondensedstatementoffinancialpositionofRivera,ReyesandRosalesp
artnershipasof
March31,2013follows:
Non-cashassets 265,000 Rivera,Capital 95,000
Reyes,Capital 80,000
Rosales,Capital 70,000
TotalAssets ₱293,000 TotalEquity ₱293,000
Profitandlossratiois50:25:25,respectively.Thepartnersvotedtodissolvethepar
tnershipand
liquidatebysellingtheassetsininstalments.₱70,000wererealizedonthefirstcas
hsaleofnon-cash
assetswhichhasabookvalueof₱150,000.Aftersettlementwithcreditors,allcash
availablewas
distributedtopartners.HowmuchcashdidRosalesreceive?
A.₱10,500
B.₱20,000
C.₱32,500
D.₱21,250
72.ThestatementoffinancialpositionofthepartnershipofDesiree,Deborahand
Dexterwhoshare
intheprofitsandlossesintheratioof5:3:2,respectivelyisasfollow:
Otherassets 320,000 Desiree,Capital 80,000
Deborah,Capital 115,000
Dexter,Capital 105,000
Thepartnersagreedtoliquidatethepartnershipbyinstalment.Immediately,there
wasarealizationof
₱100,000cashinsellingotherassetswithbookvalueof₱150,000.Onthecashava
ilable,priorityis
thepaymentofliabilitiesandthebalanceistobedistributedtopartners.Howthere
mainingcash
shouldistobedistributed?
A.Desiree,₱50,000;Deborah,₱30,000;Dexter,₱20,000
B.Desiree,₱40,000;Deborah,₱24,000;Dexter,₱16,000
C.Desiree,₱0;Deborah,₱48,000;Dexter,₱32,000
D.Desiree,₱0,Deborah,₱31,000;Dexter,₱49,000
Foritems73-75
TheassetsandequitiesofSabido,SantosandSomidopartnershipattheendofitsfi
scalyearended
October31,2019areasfollows:
Receivable-net 20,000 Loanfrom Somido 10,000
Inventory 40,000 Sabido,Capital(30%) 45,000
Property,PlantandEquipment 70,000 Santos,Capital(50%) 30,000
LoantoSantos 5,000 Somido,Capital(20%) 15,000
Total ₱150,000 Total ₱150,000
Thepartnersdecidedtoliquidatethepartnership.Theyestimatedthatthenon-
cashassetsotherthan
theloantoSantoscanbeconvertedto₱100,000cashoverthetwo-
monthperiodendingDecember
31,2019.Cashistobedistributedtotheappropriatepartiesasitbecomesavailable
duringthe
liquidationprocess.
73.Whoamongthepartnersis/aremostvulnerabletopartnershiplossesonliquid
ation?
A.Sabido
B.Santos
C.Somido
D.SabidoandSantosequally
74.If65,000areavailableforthefirstdistribution,itshouldbepaidto________
A.Creditors,₱60,000;Sabido,₱5,000;Santos,₱0;Somido,₱0
B.Creditors,₱50,000;Sabido,₱12,000;Santos,₱0;Somido,₱3,000
C.Creditors,₱60,000;Sabido,₱1,500;Santos,₱2,500;Somido,₱1,000
D.Creditors,₱50,000;Sabido,₱5,000;Santos,₱0;Somido,₱10,000
75.Ifatotalamountof₱7,500isavailablefordistributiontopartnersafteralloutsidel
iabilitiesare
paid,itshouldbepaidasfollows:
A.Sabido,₱7,500;Santos;₱0;Somido,₱0
B.Sabido,₱0;Santos,₱3,750;Somido,₱3,750
C.Sabido,₱2,250;Santos,₱3,750;Somido,₱1,500
D.Sabido,₱2,500;Santos,₱2,500;Somido,₱2,500
76.Pepito,PatrickandTommyhavecapitalbalancesof₱40,000,₱50,000and₱1
8,000,respectively
andaprofitsharingratioof4:2:1,respectively.IfPepitoreceived₱8,000uponliqui
dation,thetotal
amountreceivedbyallpartnerswas_________
A.₱108,000
B.₱56,000
C.₱24,000
D.₱52,000
77.AssumethesamefactsinNo.76exceptthatPepitoreceived₱26,000asaresult
oftheliquidation.
HowmuchwastheamountreceivedbyTommyaspartoftheliquidation?
A.₱26,000
B.₱18,000
C.₱14,500
D.₱14,000
78.Celine,SarahandBiancaarepartnerssharingprofitsandlossesintheratioof4:
3:3,respectively.
ThecondensedstatementoffinancialpositionofCSBPartnershipasofDecembe
r1,2019is
Otherassets 130,000 Celine,Capital 60,000
Sarah,Capital 40,000
Bianca,Capital 40,000
TheCSBPartnershipwasdissolvedandliquidatedbyinstalments.Thefirstrealiz
ationof₱40,000
cashwasonthesaleofotherassetswithbookvalueof₱80,000.Afterthepaymento
fliabilities,the
cashavailableisdistributedtoCeline,SarahandBianca,respectivelyasfollows:
A.₱36,000;₱27,000;₱27,000
B.₱16,000;₱12,000;₱12,000
C.₱44,000;₱28,000;₱28,000
D.₱24,000;₱13,000;₱13,000
79.Afterallnon-
cashassetshavebeenconvertedintocashintheliquidationofthePatriciaand
Mariepartnership,theledgercontainsthefollowingaccountbalances:
Debit Credit
Cash ₱47,000
AccountsPayable ₱32,000
LoanPayabletoPatricia 15,000
Patricia,Capital 7,000
Marie,Capital 7,000
Availablecashshouldbedistributedwith₱32,000goingtoaccountspayableand
A.₱7,000toPatriciaand₱8,000toMarie
B.₱7,500eachtoPatriciaandMarie
C.₱8,000toPatriciaand₱7,000toMarie
D.₱15,000totheloanpayabletoPatricia
80.MamaandPapaformedapartnershiponJuly1,2019.Theyinvested₱30,000a
nd₱40,000and
agreedtoshareprofitsandlosses60%and40%,respectively.Alltheirtransaction
swereforcashand
alltheirsubsequenttransactionswerehandledthroughtheirrespectivebankacco
untssummarized
asfollows:
Mama Papa
Cashreceipts ₱79,100 ₱65,245
Cashdisbursements 62,275 70,695
OnOctober31,2019,thepartnershipwasdissolvedandalltheremainingnon-
cashassetsweresold
forcashof₱60,000andcashsettlementwaseffected.Howmuchwasthecashrec
eivedbyMama?
A.₱24,000
B.₱26,000
C.₱34,000
D.₱36,000
DISCLAIMER:SOMEQUESTIONSPROVIDEDINTHISMATERIALWEREAD
APTEDFROM DIFFERENT
AUTHORS AND PROFESSORS OF BASIC ACCOUNTING.THIS
DOCUMENT SHALLSERVE AS A
REVIEW
MATERIALONLYANDDONOTUSETHISFORANYUNNECESSARYACTSS
UCHSENDING
THISTOOTHERSINEXCHANGEOFPAYMENT.THEAUTHOROFTHISMAT
ERIALWANTSTOHELP
THOSESTUDENTSWHO HAVEDIFFICULTIESIN UNDERSTANDING
ACCOUNTING TOPICS.ALSO,
THISMATERIALWILLSOMEHOW HELP STUDENTSIN IMPROVING
THEIRKNOWLEDGEIN THE
WORLDOFACCOUNTING.GOODLUCKANDGODBLESS
Preparedby:
NIXOND.TORRESJR.
BachelorofScienceinAccountancy(BSA)student
SanMateoMunicipalCollege
TESDANCIIIBookkeepingPasser

C Limitedpartner

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