The increase in capital of Kendall: a. None c. by P 160,000 b.

by P 100,000

d. by P 220,000 Answer: (b) Cash 100,000 Merchandise 25,000 Building

150,000 Equipment 85,000 Mortgage Payable 40,000 Capital, Jackson

100,000 Capital, Kendall 220,000 16. The partners have an equal interest

in the initial total partnership capital and the bonus method is used, the

increase in capital of Jackson: a. None c. by P160,000 b. by P100,000 d. by

P220,000 Answer: (c) 17. The partners have an equal interest in the initial

total partnership capital, and the goodwill method is used, the increase in

capital of Jackson: a. None c. by P160,000 b. by P100,000 d. by P220,000

Answer: (d) Cash 100,000 Merchandise Inventory 25,000 Building 150,000

Equipment 85,000 Goodwill 120,000

7. HH, MM. and AA formed a partnership on January

1, 20x5 and contributed P150,000, P200,000. and

P250,000, respectively. Their articles of copartnership

provide that the operating income be shared among

the partners as follows: as salary, P24,000 for HH,

P18,000 for MM, and P12,000 for AA interest of 12%

on the average capital during 20x5 of the three

partners and the remainder in the ratio of 2:4:4.

respectively. The operating income for the year

ending December 31, 20x5 amounted to P176,000.

HA contributed additional capital of P30,000 on July 1

and made a drawing of P10.000 on October 1: MM

contributed additional capital of P20,000 on August l

and made a drawing of P10,000 on October 1: and,

AA made a drawing of P30,000 on November 1 The

partners' capital balances on December 31, 20x5 are:

a. HH, P179,680: MM, P229,360; and AA, P239,360 b.

HH, P179,760: MM, P229,520; and, AA, P239,520 c.

HH, P189,680; MM, P239,360; and, AA, P269,360 d.

HH, P223,180: MM, P272,060: and, AA, P280,760