Par

tner
shi
pExer
cises

Par
tner
shi
pFor
mat
ion

[1]
. EmilandPear lform anewpar t
ner
ship.Emi l
investsP300,000incashf or
her60per centi
nterestinthecapit
alandprofi
tsoft hebusiness.Pearlcont
ri
but es
l
andt hathasanor i
ginalcostofP40,000andaf airmarketvalueofP70,000,anda
buil
dingt hathasataxbasi sofP50,000andaf ai rval
ueofP90, 000.Thebui l
dingis
subjecttoaP40, 000mor tgagethatt
hepartnershipwillassume.Whatamountof
cashs houldPearlcont r
ibute?

a.P40,
000

b.P80,
000

c.P1
10,
000

d.P1
5,0000

[2]. TheGr eenandRedpar tnershi

pwasf ormedonJanuar y2,201 1.Underthe
part
ner shipagreement ,eachpartnerhasanequal i
niti
alcapital
balanceaccount ed
forundert hegoodwi l
lmethod.Par t
nershipneti ncomeorl ossisallocated60% to
Greenand40% t oRed.Tof or
mt hepar tnershi
p,Gr eenoriginal
lycontri
butedassets
costi
ngP30, 000wi thafairval
ueofP60, 000onJanuar y2,201 1,andRed
contri
butedP20, 000incash.Dr awingsbyt hepar t
nersduring201 1totaledP3,000
byGr eenandP9, 000byRed.Thepar t
ner shi
p’s201 1neti
ncomewasP25, 000.
Red’siniti
alcapitalbal
anceinthepar tnershipis:

a.P20,
000.

b.P25,
000.

c.P40,
000.

d.P60,
000.
[3]. Pi
ranteandWil
sondraf
tedapart
ner
shipagr
eementt
hatl
i
stst
hef
oll
owi
ng
assetscont
ribut
edatt
hepartner
shi
p’sf
ormat
ion:

Cont
ri
but
edby

Pi
rant
e Wi
l
son

Cash P40,
000 P60,
000

I
nvent
ory - 30,
000

Bui
l
ding - 80,
000

Fur
nit
ureandequi
pment 30,
000 -

Thebuil
dingissubj
ectt
oamor t
gageofP20,000,whichthepartner
shi
p
assumed.Thepar t
nershi
pagreementalsospeci
fi
esthatpr
ofi
tsandlossesar
etobe
di
stri
butedevenly.Whatamount sshoul
dber ecor
dedascapitalf
orPir
anteand
Wilsonattheformati
onofthepartner
ship?

a. P70,
000andP1
70,
000,r
espect
ivel
y.

b. P70,
000andP1
50,
000,r
espect
ivel
y.

c. P1
10,
000f
oreachpar
tner
.

d. P1
20,
000f
oreachpar
tner
.

[4]. AAandBel enformedapar tnershi

pandtheyagreedtosharei
nit
ialcapi
tal
equall
y,althoughAAcont r
ibut
edP1 50,000andBelencontri
butedP126,
000i n
i
dentif
iableassets.Undert
hebonusappr oacht
oadjustt
hecapital
accounts,Bel
en
recei
ved( gave)abonusequal to:

a. P24,
000

b. P1
2,000

c. (
P24,
000)

d. (
P12,
000)
[5]
. AA,BB,andCCar etof orm apart
nershi
p.AAist
ocont r
ibut
ecashof
P100,000;BB,P1 0,000;and,CC,P1 00,
000.AAandCCar enottoacti
vel
y
part
ici
pateinthebusi nessbutwi l
lref
ercust
omers,whi
leBBwi l
lmanaget hefi
rm.BB
hastogiveuphispr esentjobwhi chgivesheranannuali
ncomeofP1 20,000.The
part
nersdecidedt hatprofi
tsandlossesshall
besharedequall
y.Uponf or
mati
on,
part
ners’capi
talbalanceswoul dbe:

a. P 70,
000,P 70,
000,andP 70,
000,r
espect
ivel
y.

b. P1
00,
000,P1
0,000,andP1
00,
000,r
espect
ivel
y.

c. P1
00,
000,P1
30,
000,andP1
00,
000,r
espect
ivel
y.

d. P1
10,
000,P1
10,
000,andP1
10,
000,r
espect
ivel
y.

[6]
. BrendaandCathyformedapar t
nershipandagreedtodivi
deini
tial
capital
equall
y,eventhoughBrendacontri
butedP200,000andCat hycontr
ibut
edP1 68,000
i
nidentif
iabl
eassets.Underthebonusapproacht or
ecordthecontr
ibuti
onsofthe
part
ners,Cathy’
scapit
alaccountshoul
dbecr edit
edfor

a. P200,
000. c.P1
84,
000

b. P1
68,
000. d.P1
00,
000

[7]
. OnMay,31 ,201 1 ,All
en,Belen,andCenenf ormedapar t
nershipby
combi ningthei
rbusinesses.Al l
engi vecashofP50, 000.Belengaveapr oper
tywitha
carr
yingamountofP30, 000,anor i
ginalcostofP40,000,andaf ai
rmar ketval
ueof
P80,000.Bel en’
sproper ty,however ,hasaP35, 000mor tgagef orwhicht henew
part
ner shi
pacceptedl egal responsibil
i
ty.Cenengaveadel iveryequipmentwi tha
bookval ueofP30,000,anacqui si
ti
oncostofP75, 000,andanappr aisedvalueof
P55,000.I twasagreedt hatpr ofi
tsandl ossesar
etobeshar edequally.Thepartner
wit
ht hebiggestcapitalaccountbal anceasofMay31 ,2011,is

a. Al
l
en

b. Bel
en

c. Cenen

d. Al
l
enhaveequal
capi
tal
bal
ance.
[8]
. AbelandCarrfor
medapar t
nershi
pandagr
eedtodivi
deinit
ial
capit
alout
lay
equal
l
y,event houghAbelcontr
ibut
edP1 00,
000andCarrcont
ri
butedP84,000in
i
denti
fi
ableassets.Underthebonusapproacht
oadjustt
hecapit
alaccount
s,Carr
’s
uni
denti
fi
ableassetshoul
dbedebi t
edfor

a. P46,
000

b. P8,
0000

c. P1
6,000

d. P-
0-

[9]. OnOct ober1,2011,Carl

aandCl arajoi
nedinapartnership.Carl
a
contri
butedcashwhi leClar
acontri
but edmerchandisewort
hP25, 000andasecond-
handdel i
verytruckcurr
entl
yvaluedatP50, 000butencumber edbyaone- year
chatt
el mortgagenoteforP1 5,
000.Ifini
ti
alcapi
tal
balancesaretoconf or
mt othe
profi
t-shar
ingratioof2:
3,respecti
vely,t
heamountofcashcont r
ibutedbyCar l
awas:

a. P24,
000

b. P30,
000

c.P40,
000

d.P50,
000

[1
0]. AA,BB,andCCar etof or
m apart
nershi
p.AAi st
ocont ri
but
ecashof
P100,
000;BB,P1 0,000,andCC,anequi pmentvaluedatP1 00,000.AAandCCar e
nott
oactivel
ypar ti
cipatei
nthebusinessbutwil
lrefercust
omer s,whi
leBBwi l
l
managethefirm.BBhast ogiveupherpresentj
obwhi chgivesheranannual
i
ncomeofP1 20, 000.Thepar tnersdeci
dedthatprofi
tsandlossesshallbeshared
equal
ly.Uponf ormat i
on,assumingachatt
elmor t
gageofP1 0,
000ont heequipment
i
sassumedbyt
hepar
tner
shi
p,t
henetasset
soft
hepar
tner
shi
pisequal
to:

a.P21
0,000

b.P200,
000

c.P220,
000

d. P330,
000

[11]. OnOct ober1 ,201

1,Mel andGarripooledthei
rassetsandf or
ma
partnership,wi t
ht hefirmtotakeoverthei
rbusinessassetsandassumet heir
l
iabil
iti
es.Thepar t
ner’scapit
alsaretobebasedonnetasset str
ansferr
edaf tert
he
fol
lowingadj ust
ment s:Garri
’si
nventoryi
stobei ncr
easedbyP3, 000;anallowance
forbaddebt sofP1 ,
000andP1 ,
500ar etobesetupi nthebooksofMel andGar ri
,
respectively;andP4, 000ofaccount spayablearetober ecognizedinMel ’
sbooks.
Thei ndivi
dual tr
ialbalancesonOct ober1showt hefoll
owing:

Mel Gar
ri

Asset
s P1
13,
000 P75,
000

Li
abi
l
it
ies 34,
500 5,
000

Capi
tal 78,
500 70,
000

Whatist
hecapi
tal
bal
anceofMel
andGar
riassumi
ngt
heyagr
eet
oshar
ecapi
tal
equal
l
y?

a. P65,
000

b. P72,
500

c. P74,
250

d. P80,
000
[12]
. ChonaandChar oformedapar tnershi
ponMay31 ,2011.Chona’scontri
buti
on
consist
edofherpropri
etorshi
p’snetassetswithcurr
entfai
rvalueofP60,000.Char o
contr
ibutedenoughcashtosecur eaone- fourt
hint
eresti
nthepar t
nershi
p.IfChonais
al
lowedgoodwi l
lcr
editequalto20% ofheri ni
ti
alcapi
tal
,Charo’scashcontr
ibut
ionwas:

a. P1
5,000

b. P20,
000

c.P25,
000

d. P30,
000

[13]. Fl ores,Per al
ta,andJosear efor
minganewpar tnershi
p.Fl oreswil
li
nvestcashof
P120,000andhi soffi
ceequipmentcost i
ngP144,000buthasamar ketvalueofP60,000.
Peralt
aistoinvestcashofP1 92, 000andJosei stocontr
ibuteP60,000cashandabr and
newdel i
verytruckwi t
hamar ketvalueofP144,000alt
houghheboughti tforonl
yP1 20,000.
Thepar t
nerswi l
lshareprofi
tsandl ossesintherat
ioof25:25:50forFlores
,Peral
taandJose,
respecti
vel
y.

Thecapi
tal
bal
ancesoft
hepar
tner
suponf
ormat
ionar
e:

Fl
ores Per
alt
a Jose

a. P264,
000 P1
92,
000 P1
80,
000

b. P1
80,
000 P1
92,
000 P204,
000

c. P1
92,
000 P1
92,
000 P1
92,
000

d. P21
2,000 P21
2,000 P21
1,200

[14]. DJandEJ,onMay31 ,2011,pooledthei

rnetassetstoform apartnershi
p,wit
hthe
newf i
rmt akingoverthebusinessasset sandassumingtheirl
iabi
li
ti
es.Thepartner’
scapit
als
aretobebasedonnetas set
str ansf
erredaft
erthefoll
owingadjustments:al
lowancefor
doubtfulaccountsofP1,000andP1 ,500aretobes etupont hebooksofDJandEJ,
respecti
vely;EJ’
sinvent
oryistobei ncreasedbyP3, 000;and,accountspayabl eofP4,
000
i
stober
ecor
dedonDJ’
sbooks
.Thei
ndi
vi
dual
tri
albal
ancesont
hisdat
eshow:

DJ EJ

Ass
ets P1
05,
000 P1
13,
000

Li
abi
l
it
ies 35,
000 34,
500

Capi
tal 70,
000 78,
500

Whati
sEJ’
sadj
ust
edcapi
tal
bal
ance?

a. P77,
000

b. P80,
000

c.P81
,500

d.P85,
500

[
15]
. Whenpr opert
yot
hert
hancashi
sinvestedinapart
nershi
p,atwhatamountshoul
d
t
henon-
cashpr
opertybecr
edi
tedt
othecontr
ibuti
ngpart
ner’
scapital
account
?

a. Fai
rval
ueatt
hedat
eofcont
ri
but
ion.

b. Cont
ri
but
ingpar
tner
’sor
igi
nal
cost
.

c. Assessedval
uat
ionf
orpr
oper
tyt
axpur
poses
.

d. Cont
ri
but
ingpar
tner
’st
axbasi
s.

[16]. Pulainvi
tesPutitoj
oi nhisbusinessasapartner.Thecapital
accountofPul
ahasa
credi
tbal
anceofP300,000.Put iwil
li
nvestcashofP1 20,
000andhewi l
lbegivenacapi
tal
credi
tof30% oft
het ot
alcapital
aftermakingthefol
lowingadjustmentsi
nthebooksofPula:
(a)Theaccumulateddepreciati
onoft heequipmentistobeincreasedbyP7,500;(
b)
Prepai
dexpensesaretober educedbyP2, 400.

Thecapi
tal
accountofPul
aandPut
iimmedi
atel
yaf
tert
hef
ormat
ionoft
hepar
tner
shi
p
ar
e:

a. P300,
000andP1
20,
000,r
espect
ivel
y;
b. P290,
100andP1
20,
000,r
espect
ivel
y;

c. P287,
070andP1
23,
030,r
espect
ivel
y;

d. P287,
070andP 40,
000,r
espect
ivel
y.

[
17]. OnMar ch1
,201
1,JhanandFebf
ormedapar
tner
shi
pwi
theachcont
ri
but
ingt
he
f
oll
owi
ngasset
s:

Jhan

Feb

Cash

P30,
000

P70,
000

Machi
ner
yandEqui
pment

25,
000

75,
000

Bui
l
ding

225,
000

Fur
nit
ureandFi
xtur
es

1
0,000

Thebui
ldi
ngi
ssubjecttoamor t
gageloanofP90,000,whichi
stobeassumedbythe
par
tner
shi
p.Thepartnershi
pagreementprovi
desthatJhanandFebsharepr
ofi
tsand
l
osses30per
centand70per cent,r
espect
ivel
y.

Assumingthatthepar
tner
sagr eedt
obringt
heirr
especti
vecapit
alinpr
opor
ti
ontothei
r
respect
iveprof
itandl
ossrat
io,andusi
ngFeb’scapi
talasthebase,howmuchcashistobe
i
nvestedbyJhan?
a.P1
9,000

b.P30,
000

c.P40,
000

d.P55,
000

[18]
. Bel
,Joy,andFr anco,newCPAs,ar etof or
m apar tnership.Belwil
lcontr
ibutecash
ofP50,000andhi scomput ert
hatori
ginal
lycostP60,000butwi thasecond- handvalueof
P25,000.Joywi l
lcontr
ibut
eP80,000incash.Fr anco,whosef ami l
ysel l
scomputers,will
contr
ibuteP25, 000incashandabr andnewcomput erwit
hpr interthatcosthi
sfami l
y’
s
comput erdealershi
pP50, 000butwit
har egularsell
i
ngpr i
ceofP60, 000.Thet hr
eeagr eeto
shareprofit
sandl ossesequall
y.Uponf or
mation,capit
albalancesar e:

a. Bel
,P 75,
000;Joy,P80,
000;and,Fr
anco,P85,
000

b. Bel
,P 80,
000;Joy,P80,
000;and,Fr
anco,P80,
000

c. Bel
,P 88,
333;Joy,P88,
333;and,Fr
anco,P88,
334

d. Bel
,P1
10,
000;Joy,P80,
000;and,Fr
anco,P75,
000

[1
9] . Mar kadmi t
sJimenezasapar tnerinthebusiness.Balancesheetaccountsof
Mar kj
ustbef
oretheadmissionofJimenezshow:Cash,P26, 000,accountsrecei
vabl
e,
P120,000,merchandi
seinventor
y,P180,000,andaccount spayableP62,000.Itwas
agreedthatf
orpurposesofestabl
is
hingMar k’
sint
erest,t
hefoll
owingadjustmentsbemade:

A. Anal
l
owancef
ordoubt
ful
account
sof3% ofaccount
srecei
vabl
eist
obeest
abl
i
shed;

B. Mer
chandi
sei
nvent
oryi
stobeadj
ust
edupwar
dbyP25,
000;and

C.Pr
epai
dexpensesofP3,
600andaccr
uedl
i
abi
l
it
iesofP4,
000ar
etober
ecogni
zed.

I
fJi
menezi
stoi
nvestsuf
fi
cientcasht
oobt
ain2/5equi
tyi
nthepar
tner
shi
p,howmuch
woul
dJi
menezcont
ri
butetothenewpart
nershi
p?
a.P1
76,
000

b.P1
90,
000

c.P 95,
000

d.P1
13,
980

[
20]
. Thebal ancesheetasofJul
y31
,201
1fort
hebusi
nessownedbyGl
ori
ant
sshows
t
hef
oll
owi
ngassetsandl
iabi
li
ti
es:

Cash

P 2,
500

Account
sRecei
vabl
e

1
0,000

Mer
chandi
seI
nvent
ory

1
5,000

Fi
xtur
es

1
8,000

Account
sPayabl
e

6,
000

I
tisesti
matedt hat5% oftheaccount sreceivabl
esmaypr oveuncollect
ibl
e.Mer chandise
i
nventoryi
ncludesobsol et
eitemscost i
ngP5, 000ofwhi chP2, 000mi ghtst
il
lbereali
zed.
Depreci
ati
onhasneverbeenr ecordedforthef i
xtur
eswhi charealreadytwoyear sol
d.They
haveanestimat edusefull
if
eof1 0years ,andhaveacur rentfairval
ueofP20, 000.Cr uzant
s
i
stobeadmi ttedasapar t
neruponhi sinvestmentofP20, 000cashandP1 0,000wor t
hof
merchandi
se.Whati sthetotalassetsofthepar t
nershi
p?

a.70,
500
b.48,
000

c.67,
500

d.74,
000

Quest
ions21and22ar
ebasedont
hef
oll
owi
ngi
nfor
mat
ion:

Sel
ect
edbal
ancesheetaccount
sofSi
l
vanoonDecember31
,201
1ar
eshownbel
ow:

Cash P30,
000

Account
srecei
vabl
e 25,
000

I
nvent
ory 45,
000

Fur
nit
ure 32,
000

Account
spayabl
e 8,
000

Thefoll
owi
ngadj
ustmentsar
etobemadebeforeheagr
eet
oadmi
tPegasusasapar
tneri
n
exchangef
orhi
sinvest
mentofP20,
000cash:

§ 3% baddebt
sshoul
dbepr
ovi
ded.

§ Thef
airval
ueoft
hef
urni
tur
eisP27,
000.

§ P5,
000oft
hei
nvent
oryi
sobsol
etebutcanst
il
lbesol
dforP3,
000.

[
21]
. Af
teradj
ust
ment
,howmuchcapi
tal
shoul
dber
efl
ect
edi
nthebooksofSi
l
vano?

a. P1
15,
250

b. P1
16,
250

c.P1
24,
000
d.P1
32,
250

[
22]
. Howmuchi
sthet
otal
asset
soft
henewpar
tner
shi
p?

a.P1
16,
250

b.P1
24,
000

c.P1
24,
250

d.P1
44,
250

[23]. OnSept ember30,201 1,Pai

nadmitsGai
nforanint
eresti
nhi
sbusi
ness
.Ont hi
s
date,Pain’
scapi
talaccountshowsabalanceofP1
58,400.Thefoll
owi
ngwereagreedupon
beforethefor
mationofthepartner
shi
p:

1
. Pr
epai
dexpensesofP1
7,500andaccr
uedexpensesofP5,
000ar
etober
ecogni
zed.

2. 5% oft heoutst
andingaccount
srecei
vabl
eofLopezamount
ingt
oP1
00,
000i
stobe
recogni
zedasuncoll
ect
ibles.

3. Gaini
stobecredi
tedwit
haone-thi
rdequi
tyi
nthepar
tner
shi
pandi
stoi
nvestcash
asi
def
rom t
heP50,
000wor t
hofmerchandi
se.

Theamountofcasht
obei
nvest
edbyGai
nandt
het
otal
capi
tal
oft
hepar
tner
shi
par
e:

a.32,
950and248,
850,r
espect
ivel
y.

b.55,
300and221
,200,r
espect
ivel
y.

c.82,
950and248,
850,r
espect
ivel
y.

d.32,
950and1
71,
200,r
espect
ivel
y.
[24]
. OnMay1 ,201 1,JulyandJunef ormedapar tnershi
pandagreedtoshareprof
its
andlossesintherati
oof3: 7,respecti
vel
y.Julycontr
ibutedacomputerthatcosthi
m
P50,000.Junecont ributedP200, 000cash.Thecomput erwassol
dfor55,000onMay1 ,
2011immedi at
elyafterthef ormationofthepart
nership.Whatamountshouldber ecor
ded
i
nJuly’scapit
alaccountonf ormationofthepart
nership?

a. P55,
000

b. P51
,000

c. P60,
000

d. P50,
000

[25]. Yel low,OrangeandVi oletform apartner

shiponMay1 ,2011.Theyagreethat
Yell
owwi l
lcontri
buteoff
iceequipmentwi thatotalf
airvalueofP40,000;Orangewill
contr
ibut
edel i
veryequi
pmentwi thaf ai
rvalueofP80, 000;andVioletwi
ll
contri
but
ecash.I
f
Viol
etwantsaone- thi
rdint
eresti
nt hecapital
andpr ofi
ts,howmuchshoul dsheinvest?

a.P 40,
000

b.P 60,
000

c.P1
20,
000

d.P1
80,
000

[26]. Wi l
derandNestwil
lpoolthei
rnetassetsandfor
m apartnershi
p,whichwillt
ake
overtheasset
sandassumetheliabil
it
ies.Theagreedcapi
taloft
henewpar tnershi
pisthe
tot
alnetasset
stobetr
ansfer
redsubjecttothefol
lowi
ngadjustments:

§ Wi
l
der
’si
nvent
oryi
stobei
ncr
eas
edbyP3,
000.
§ Account
srecei
vabl
eofP1
,000andP1
,500f
orWi
l
derandNestr
espect
ivel
y,wi
l
lbe
wri
tt
enoff.

§ Accr
uedexpensesofP4,
000ar
etober
ecogni
zedi
nWi
l
der
’sbooks.

Theunadj
ust
edcapi
tal
ofWi
l
deri
sP78,
500andNesti
sP70,
000.

Whati
sthecapi
tal
bal
anceofeachpar
tnerassumi
ngt
heyagr
eet
obeequal
par
tner
s?

a.P65,
000

b.P72,
500

c. P74,
250

d. P80,
000

[27]. OnOct ober1

,201 1,Clar
aandMar iajoi
nedinapartnershi
p.Claracontri
buted
cashwhi l
eMar i
acontri
butedmer chandi
sewor thP25,000andasecond–handdel i
very
truckcurr
entl
yvaluedatP50, 000butencumber edbyaone- yearchat
telmortgagenotefor
P1 5,
000.Ifi
nit
ialcapi
talbal
ancesaretoconf ormtotheprof
it-
shari
ngrati
oof2: 3,
respecti
vel
y,t
heamountofcashcont ri
butedbyCl ar
awas:

a.P24,
000

b.P30,
000

c.P40,
000

d.P50,
000

Quest
ions28and29ar
ebasedont
hef
oll
owi
ngi
nfor
mat
ionaboutAga-
Mat
aPar
tner
shi
p:

AgaandMataareplanni
ngt
ofor
m apar t
nershi
p.Agawil
linvestP20,
000f
ora20% int
erest
i
nthenewpart
nership.Mat
awil
li
nvestcashandhisequi
pmentwi t
hamarketval
ueof
P50,
000.Theywi
l
lshar
epr
ofi
tsandl
ossesequal
l
y.

[
28]
. Howmuchcashshoul
dMat
ainvest
?

a.P30,
000

b.P50,
000

c.P60,
000

d.P80,
000

[
29]
. Howmuchi
sthet
otal
cashi
nvest
mentoft
hepar
tner
s?

a.P30,
000

b.P50,
000

c.P60,
000

d.P80,
000

[30]. Al andMacmoddeci detoform apar t

nershi
p.Theiniti
alinvest
mentsofthe
partnerswi l
l i
ncl
udecashofP1 20,
000f orAl andP80, 000forMacmod.Al wil
ltr
ansferhi
s
offi
ceequi pmentwi thabookval ueofP96, 000andaf ai
rmarketvalueofP84,000tothe
partnership.Macmodwi l
lt
ransferhi
slandf air
lyvaluedatP1,000,000andthebui l
ding
thereonf air
lyvaluedatP600,000.Macmodhasj ustboughttheseatal umpsum priceof
P1,800,000.I naddit
ion,t
hepar t
nershi
pwi l
l assumet hemortgageofP400, 000ont he
buil
ding.
 Whatwi
l
lbet
het
otal
capi
tal
oft
hepar
tner
shi
p?

a.P1
,484,
000

b.P1
,496,
000

c.P1
,684,
000

d.P1
,946,
000

Par
tner
shi
pOper
ati
on

[31
]. Mr .Zoom andhisveryclosefri
end,Mr.Boom,formedapar tnershi
ponJanuary1 ,
2011,withZoom cont ri
but
ingP16,000cashandBoom cont ri
butingequipment,wit
habook
val
ueofP6, 400andf ai
rvalueofP4,800,andinvent
oryit
ems,wi thabookvalueofP2,400
andfairval
ueofP3, 200.Dur i
ng201 1,Boom madeadditi
onali
nvestment sofP1,
600onApr i
l
1andP1 ,600onJune1 ,andwi t
hdrewP4, 000onSeptember1 .Zoom hadnoaddi t
ional
i
nvestment sorwithdrawal
sdur i
ngtheyear .Whatwastheaveragecapitalbal
anceofMr .
Boom dur i
ng201 1?

a. P9,
600

b. P8,
800

c. P8,
000

d. P7,
200

[32]
. Dul ceMar ti
n,apartneri
napartnershi
pthatcar
riest
henameofTheSweetShop,
hasa30% par ti
cipati
oninpar t
ner
shi
ppr of
it
s.Hercapit
alaccounthasanetdecr easeof
P48,000during201 1.Inthesameyear,shewi t
hdrewP104,000(chargedagainsthercapi
tal
account)andcont r
ibutedpropert
yval
uedatP20, 000tothepart
nership.Thenetincomeof
thepart
nershipfor201 1was:
a. P 36,
000

b. P1
20,
000

c. P1
32,
000

d. P440,
000

[33]. Par tnersJose,Luciano,andPlacidohaveaveragecapi t

albalancesofP240, 000,
P120,000,andP80, 000,r especti
vel
y,during2011.Eachpartnerrecei
ves1 0% i
nter eston
hisaveragecapitalbal
ance.Af t
erdeductingsalar
iesofP60,000f orJoseandP40, 000f or
Placi
do,ther esi
dualprof
itorlossisdi
videdequally.I
n2011,thepartnershi
psustaineda
P66,000l ossbeforepartners’i
nter
est
sandsal ari
es.Byhowmuchwoul dPlaci
do’scapi tal
accountchange?

a. P20,
000i
ncr
ease

b. P22,
000decr
ease

c. P32,
000decr
ease

d. P48,
000i
ncr
ease

[34]. OnJanuar y1 ,2011

,ZeepandBeephavecapi tal
balancesofP20, 000and
P16,000,respectively.OnJuly1 ,201
1,Zeepi nvestedanaddi tional P4,000whileBeep
withdrewP1 ,000.Pr ofi
tsandlossesaredivi
dedasf ol
lows:Beepi sthemanagi ngpart
ner
andassuchshal lreceiveP16,000assalary,withZeepr eceivingP7, 200;bothpart
ner
s
shouldreceiveinterestof10% basedont heirbeginningcapital balances,tooff
setwhatever
dif
ferenceincapi t
al i
nvestmentstheyhave;and,anyr emaindershal lbedivi
dedequal
ly.The
netincomeoft hepar t
nershi
pf or2011wasP9, 600.WhatwasZeep’ sshareinneti
ncome
for201 1
?

a. P9,
200

b. P4,
800

c. P 880

d. P 600

[35]. RedandWhi teformedapar t

nershi
pin2011
.Thepar t
ner
shi
pagr eementpr
ovides
forannualsal
aryal
lowancesofP55,000f orRedandP45,000f orWhi
te.Thepar t
ner
s
shareprof
itsequal
l
yandl ossesina60:40rati
o.Thepar
tnershiphadearni
ngsofP80,000
for2011beforeanyall
owancet opart
ners.Whatamountoft heseear
ningsshoul
dbe
credi
tedtoeachpar t
ner’
scapit
alaccount?
 Red Whi
te

a.P40,
000 P40,
000

b.P43,
000 P37,
000

c.P44,
000 P36,
000

d.P45,
000 P35,
000

[36]. OnJanuar y2,201 1,BuenoandPer ezfor

medapar tnershipwit
hcapital
dist
ri
but
ionsofP1 75,000andP25, 000,respecti
vel
y.Theyagreedt oshareprofi
tsandl osses
80% and20%,r espectively.Per
ezisthegeneralmanagerandwor ksint
hepartnershipfull
ti
me.Perezisgiven salaryofP5,000amont h;aninter
estof5% onst art
ingcapit
al;anda
bonusof1 5% ofnetprofitbefor
ethesalar
y,int
erest
,andbonus .Thecondensedpr of
itand
l
ossstat
ementoft hepartnershi
p,fort
heyearendedDecember31 ,2011
,isasfoll
ows:

Netsal
es P875,
000

Costofsal
es 700,
000

Gr
osspr
ofi
tonsal
es P1
75,
000

Expenses(
incl
udi
ngsal
ary,i
nter
estandbonus
) 1
43,
000

Netpr
ofi
t P 32,
000

Thebonusi
n201
1is

a. P1
3,304.
35

b. P1
8,000.
00

c. P1
5,300.
00

d. P20,
700.
00
Quest
ions37&38ar
ebasedont
hef
oll
owi
ngi
nfor
mat
ion:

Herm,Mar c,andAlexformedapar t
nershiponJanuar y1,2011,andcontri
butedP150,000,
P200,000,andP250, 000,r
espect
ively.Thear t
icl
esofco-part
nershipprovi
desthatt
he
operati
ngi ncomebeshar edamongt hepar tnersasfol
lows:assal
ary,P24,000forHerm,
P18,000f orMarc,andP1 2,
000forAlex;interestof12% ontheaveragecapital
duri
ng201 1
ofthethreepar t
ner
s;and,theremainderint herati
oof2:4:
4,respecti
vel
y.

Theoperati
ngi
ncomef ortheyearendingDecember31 ,2011amountedt
oP176,000.Her
m
contr
ibut
edaddi
ti
onalcapital
ofP30,000onJul y1andmadeadr awingofP1
0,000on
October1;Mar
ccontri
butesadditi
onalcapi
tal
ofP20,000onAugust1andmadeadr awi
ng
ofP10,000onOctober1;and,Alexmadeadr awingofP30,000onNovember1 .

[
37]
. Thedi
vi
si
onoft
heP1
76,
000oper
ati
ngi
ncomei
s:

a. Her
m,P53,
760;Mar
c,P62,
520;and,Al
ex,P59,
720

b. Her
m,P35,
200;Mar
c,P70,
400;and,Al
ex,P70,
400

c. Her
m,P48,
400;Mar
c,P66,
800;and,Al
ex,P60,
800

d. Her
m,P53,
180;Mar
c,P62,
060;and,Al
ex,P60,
760

[
38]
. Thepar
tner
s’capi
tal
bal
ancesonDecember31
,201
1ar
e:

a. Her
m,P1
79,
680;Mar
c,P229,
360;and,Al
ex,P239,
360

b. Her
m,P1
79,
760;Mar
c,P229,
520;and,Al
ex,P239,
520

c. Her
m,P1
89,
680;Mar
c,P239,
360;and,Al
ex,P269,
360

d. Her
m,P223,
180;Mar
c,P272,
060;and,Al
ex,P280,
760

[39]. Thepar tnershi

pagreementofBingandBongpr ovi
dest
hatBingistorecei
vea
20% bonusonpr ofit
sbefor
et hebonus.Remaini
ngprof
it
sandlossesaredivi
dedinthe
respecti
verat
ioof2:3.Whichpartnerhasagreat
eradvantagewhenthepartner
shipreal
i
zes
apr of
itorwhenitsustai
nsaloss?

Pr
ofi
t Loss

a. Bi
ng Bong
b. Bi
ng Bi
ng

c. Bong Bi
ng

d. Bong Bong

[40]
. Mi chel
l
e,anact ivepartnerintheMichel
le-
EsmePart
nershi
p,recei
vesanannual
bonusof25% ofthepartnershi
pi ncomeafterdeducti
ngt
hebonus.Fortheyearended
December31,2011,thepar t
nershipincomebeforebonusamountedtoP240,000.The
bonusofMichel
lefortheyear201 1i
s

a. P45,
000

b. P48,
000

c. P60,
000

d. P80,
000

Par
tner
shi
pDi
ssol
uti
on–Admi
ssi
onofPar
tner

[41]
. Mar kandVal eri
ear epart
nerswit
hcapitalsP200,000andP100,000andshar i
ng
prof
itsandlossesat3:1,respect
ivel
y.Theydeci
dedt oadmitNoraasanewpar tnerwit
ha
50% inter
estinthefi
rm.Nor ai
nvestedcashofP1 50,000,andMarkandValeri
etransf
erred
port
ionsoftheircapi
talsasabonust oNora.AfterNor a’
sadmissi
on,Val
eri
e’scapit
alwould
be:

a. P 37,
500 c.P 81
,250

b. P 56,
250 d.P1
00,
000

[42]
. Ti t
oandVi c,par
tner
sshar i
ngpr
ofitsandlossesequall
y,havecapitalbal
ancesof
P90,000each.Joeyi sadmit
tedasanewpar t
ner,makingcashi nvest
mentofP1 20,000,t
o
aone-thi
rdint
eresti
nbothcapital
andearnings.IfJoeyiscredi
tedinfull
fortheamountof
hisi
nvest
ment,thenewcapi t
alofthepar
tnershi
pwoul dbe:
a. P240,
000.

b. P300,
000.

c. P360,
000.

d. P420,
000.

[43]. Moonbi t
sPartner
shiphadaneti ncomeofP8,000forthemonthendedSept ember
30,201 1
.Sunshi
nepurchasedani nterestinMoonbit
sPart
nershi
pofLizandDi ckbypayi
ng
LizP32,000forhal
fofhercapital
andhal fofher50% prof
it
-shari
ngint
erestonOctober1
,
2011.Atthi
sti
me,Liz’
scapital
balancewasP24, 000andDick’
scapit
alwasP56, 000.
Sunshineshoul
drecei
vecapi t
alcreditequalto:

a. P1
2,000

b. P1
6,000

c. P20,
000

d. P26,
667

[44]. Sar ahisadmitt

edi ntothefi
rm ofJoy,AAandPi l
ar.Theoldpar t
nersagr eedtosel
l
toSar ahone- f
our t
hoftheirrespecti
veequit
iesandprofi
tshare.Sarahpai datotalpri
ceof
P1,000,000.Bef oreSarah’
sadmi ssi
on,Joy,AAandPi l
arhavecapi t
al balancesof
P2,000, 000,P1,000,000andP500, 000andt heyshar
epr ofi
tsatt
her atioof6:3:1.
Partnershipassetsarefair
lystatedandimpli
edgoodwi l
li
st oberecogni zedpr i
ortoSarah’
s
admi ssi
on.

Thenewcapi
tal
oft
hepar
tner
shi
pis:

a.P3.
5M
b.P4M

c.P5M

d.P4.
5M

Quest
ions45&46ar
ebasedont
hef
oll
owi
ngi
nfor
mat
ion:

Mit
z,Mar candMer tarepartnersshari
ngpr ofi
ti
na5: 3:2rati
o,andwi thcapit
albalancesof
P95,000,P80,000,andP60, 000,respectivel
y,onDecember31 ,2011.Thepartnersdeci
ded
t
oadmi tVinceasanewpar tneronJanuar y1,2011.Vincewillcontri
butecashofP80, 000to
t
hepar t
nershipandalsopayP1 5,000f or15% ofMar c’
sshare.Vi nceistohavea20% shar e
i
npr of
it
s.Aftert
headmi ssi
onofVi nce,thetotal
capit
al wi
llbeP330, 000andVi nce’scapi
tal
wil
lbeP70, 000.

[
45]. Upont
headmi
ssi
onofVi
nce,t
het
otal
amountof“
goodwi
l
l”f
ort
heol
dpar
tner
s
woul
dbe:

a. P 7,
000

b. P1
5,000

c. P22,
000

d. P37,
000

[
46]
. Af
tert
headmi
ssi
onofVi
nce,Mar
c’scapi
tal
bal
ancewoul
dbe:

a. P72,
600

b. P74,
600
c. P79,
100

d. P81
,100

[
47]. Theadmissi
onofanewpar t
nertoa20% int
erestf
orani
nvest
mentofP1
8,000,
wit
hat
otal
agr
eedcapit
alofP75,
000,wil
lresul
ti
n:

a. Goodwi
l
ltot
heol
dpar
tner
s.

b. Goodwi
l
ltot
henewpar
tner
.

c. Bonust
otheol
dpar
tner
s.

d. Bonust
othenewpar
tner
.

[48]
. Bl ackandWhitearepart
nerswhohavecapitalbal
ancesofP600,000and
P480,000,andshar
ingprofi
tsi
ntherat
ioof3:2.Bl
ueisadmitt
edasapartneruponi
nvest
ing
P220,000fora25% int
eresti
nthefi
rm,andprofi
tsar
etobesharedequally.Gi
vent
he
choi
cebetweengoodwi l
landbonusmet hods
,Bluewould:

a. Pr
eferbonusmet
hodduet
oBl
ue’
sgai
nofP1
05,
000

b. Pr
eferbonusmet
hodduet
oBl
ue’
sgai
nofP1
40,
000.

c. Pr
efergoodwi
l
lmet
hodduet
oBl
ue’
sgai
nofP1
40,
000.

d. Bei
ndi
ff
erentf
orgoodwi
l
landbonusmet
hodsar
ethesame.

Quest
ions49and50ar
ebasedont
hef
oll
owi
ngi
nfor
mat
ion:

Ter
ryandTi
mmyent
eredi
ntoapar
tner
shi
ponMay31
,201
1,cont
ri
but
ingcashofP48,
000
andP32, 000,respecti
vel
y,andagreei
ngtodi vi
deearni
ngsintherati
oofthei
rini
ti
al
i
nvestment saft
erall
owingannualsal
aryall
owanceofP1 2,
000each.OnDecember31 ,
2011,t
hei ncomesummar yaccounthadacr edi
tbal
anceofP34, 000,whil
edrawing
accountss howeddebitbalancesofP14,
000f orTer
ryandP1 0,
000f orTi
mmy.

Atthebegi nni
ngofthenextyear,Tommywasadmi t
tedintothefir
m asanewpar t
nerwit
ha
33-1/3% i
nt er
estf
oracapit
al cr
editequaltohi
scashinvestmentofP60,000.Terr
yand
Ti
mmyt henef f
ectedapri
vatecashsettl
ementbetweent hemselvesi
nordertomakethe
capit
albalancesconfor
mt oanewpr ofi
t-
shari
ngrat
ioof4:2:3,r
especti
vel
y,wit
hsalar
y
al
lowancesscr apped.

[
49]. Howmuchwast heamountofgoodwi
l
l,i
fany,t
hatwasr
ecogni
zedi
nconnect
ion
wit
htheadmi
ssi
onoft
henewpar
tner
?

a. P20,
000

b. P24,
000

c. P30,
000

d. P36,
000

[50]
. Howmuchwast
heamountoft
hepr
ivat
ecashset
tl
ementef
fect
edbet
weent
he
oldpar
tner
s?

a. P5,
000 c.P1
2,000

b. P9,
000 d.P1
5,000

Par
tner
shi
pDi
ssol
uti
on–Ret
ir
ementofPar
tner

[51]
. WhenNenar eti
redfrom thepar
tner
shi
pofNena,Ni
na,andNona,t
hef
inal
sett
lementofNena’
sinterestexceededhercapi
tal
bal
ance.Undert
hebonusmethod,t
he
excessis:
a. Recor
dedasgoodwi
l
l.

b. Recor
dedasanexpense.

c. Ofnoef
fectt
othecapi
tal
account
sofNi
naandNona.

d. Deduct
edf
rom t
hecapi
tal
accountbal
ancesofNi
naandNona.

[52]. Luz,Vi ,andMi ndaarepart

nerswithcapitalbalances,asofDecember31 ,2011,of
P300,000,P300,000andP200, 000,respectivel
y,andwhoshar eprofi
tsandlossesequally.
Mindawishestowi t
hdraw,anditi
sagreedt hatsheistot akecert
ainfurnit
urei
tems ,wit
h
secondhandvalueofP50, 000andanot efort hebalanceofheri nt
erest.Thefurni
ture
i
temsarecarri
edi nthebooksatP65,000;br andnew,however ,t
heywoul dcostP80, 000.
theval
ueofthenot ethatMindawouldgetis:

a. P1
20,
000. c.P1
45,
000

b. P1
35,
000. d.P1
50,
000

[53]. Juan,Pedr o,andPabl oarepar tnerswhoshar eprofi

tsandlossesina5:3:2rati
o
and,onJanuar y1 ,2011,havecapi t
al balancesofP90, 000,P160,000,andP200, 000,
respectivel
y.Pablowi t
hdrewf rom thepar tnershiponJul y1,2011andt hepartner
sagr eed
that,asofthisdate,cert
aininventor
yi temswoul dhavet ober evaluedatP70,000from thei
r
recordedcostofP50, 000.Fort hesix-mont hper iodendingJune30,201 1,t
hepartnershi
p
real
izedaneti ncomeofP1 30,000.Thepar t
nersdeci dedthatPabl oshoul
dbepai d
P245, 000forhisinter
estandt heremai ningpar tners’
capitalaccountsshouldbeadjusted
foranygoodwi llr
esult
ingfrom theset tl
ement .Thepaymentt oPabloincl
udedgoodwi llof
:

a. P1
5,000.

b. P25,
000.

c. P42,
500.

d. P50,
000.

[
54]
. Paco,Qui
n,andRomyar
epar
tner
swi
thcapi
tal
bal
ancesonJune30,201
1of
P300,000,P300,000andP200, 000,respecti
vely,andsharingprofi
tsandl
ossesequal
ly.
Romyi st
oreti
re,anditi
sagreedt hatheist
ot akecertainf
ur ni
tur
e(wit
hsecond-handval
ue
ofP50,000)andanotef orhi
sinterest
.Thefurnit
ureiscarr
iedinthebooksatP65,000,but
brandnewwoul dcostP80,000.Romy’ sacquisi
ti
onoft hefurni
turewouldr
esul
tin:

a. Reduct
ioni
ncapi
tal
ofP5,
000eachf
orRaco,Qui
nandRomy

b. Reduct
ioni
ncapi
tal
ofP7,
500eachf
orPacoandQui
n

c. Reduct
ioni
ncapi
tal
ofP1
5,000f
orRomy

d. Reduct
ioni
ncapi
tal
ofP55,
000f
orRomy.

[55]. Luz,Vi ,andMi ndaarepartnerswit

hcapitalbalances,asofDecember31 ,2011,of
P300,000,P300, 000,andP200, 000,respecti
vel
y,andwhoshar eprofit
sandlossesequal l
y.
Mindawi shestowi t
hdraw,anditisagreedthatsheistot akecert
ainfurni
tur
eit
ems ,wit
ha
second-handval ueofP50,000,andanot efort
hebal anceofherinterest
.Thefurnitur
e
i
temsar ecarri
edi nthebooksatP65, 000;brandnew,however ,t
heywoul dcostP80, 000.
Thevalueofthenot ethatMindawoul dgetis:

a. P1
20,
000 c.P1
45,
000

b. P1
35,
000 d.P1
50,
000

[
56]
. Thecondensedbal
ancesheetoft
hepar
tner
shi
pofTi
c,TacandToeas

Netasset
s P400,
000

Ti
c,capi
tal
(50%) P200,
000

Tac,capi
tal
(30%) 1
20,
000

Toe,capi
tal
(20%) 80,
000

Tot
alcapi
tal P400,
000

Asofsaiddate,Ti
cret
ir
edfrom t
hepart
nershi
p.Peragr
eement,Ti
cwaspaidP225,000for
hisi
nter
estandthegoodwil
limpl
iedf
rom t
hesettl
ementwasr
ecorded.Af
terTi
c’
sreti
rement
,
thepart
nershi
p’s“
netasset
s”was:
a. P1
75,
000

b. P200,
000

c. P225,
000

d. P250,
000

[57]. Juan,Pedr o,andPabl oar epar tnerswhoshar eprofi

tsandlossesina5:3:
2r ati
o
and,onJanuar y1,2011,havecapi t
al bal
ancesofP90, 000,P1 60,
000,andP200, 000,
respectivel
y.Pablowithdrewf rom thepar tnershiponJuly1,2011andt hepart
ner
sagr eed
that,asofthisdate,cert
aininvent oryitemswoul dhavet oberevaluedatP70,000from their
recordedcostofP50, 000.Fort hesi xt
hmont hperi
odendingJune30,201 1
,thepartnershi
p
real
izedaneti ncomeofP1 30,000.Thepar tner
sdecidedthatPabloshouldbepaid
P145, 000forhisint
erestandt her emai ni
ngpar tners
’capit
alaccountsshoul
dbeadj ustedfor
anygoodwi l
lresul
ti
ngfrom thes ett
lement .Thepaymentt oPabloincl
udedgoodwi l
lof:

a. P1
5,000 c.P42,
500

b. P25,
000 d.P50,
000

[58]. Hugo,I van,andJuni arepartnersshari

ngprofi
tsandlossesi
nther
especti
verati
o
of3:3:4.Juni
isgivenper missi
ontoreti
reeffecti
veMay31 ,2011,andi
twasagreedthat
sett
lementistobemadebyt heremainingpartnersmaki
ngpayment sfr
om t
heirper
sonal
funds.Thecapitalbalancesothisdat
ear e P30,000,P25,000andP45,000forHugo,Ivan,
andJuni ,r
especti
vely.IfJunir
ecei
vedP45, 000,howmuchdi dHugopayJuni?

a. P1
3,500

b. P1
8,000

c. P22,
500

d. P45,
000
[59]. Kar en,Kar
mi,andKat
hyarepar t
nersshari
ngprofi
tsi
nt herespecti
verat
ioof2:
3:5.
OnMay31 ,2011,Kat
hyoptedt
oreti
re.Thecapital
accountbalances,atthi
sti
me,ar e
P95,000,P140,000,andP135,
000,r
espect i
vel
y.AssumingthatKathyispaidP132,000,
Karenwouldbecr edi
ted:

a. P 600

b. P 857

c. P1
,200

d. P1
,800

[
60]. ANA,MAE,andRAEshar epar
tner
shi
ppr
ofit
sandl
ossesi
ntherati
oof2:3:
5,
r
espect
ivel
y.OnOctober31,201
1,RAEwaspermi
ttedtowi
thdr
awfrom t
hepart
nershi
pat
whi
chti
met hei
rcapi
tal
bal
anceswere:

Ana,capi
tal P25,
000

Mae,capi
tal 40,
000

Rae,capi
tal 35,
000

I
fRAEi
spaidP39,
000inf
ull
paymentofheri
nter
est
,thecapi
tal
ofANAi
mmedi
atel
y
af
terRAE’
swi
thdr
awalwoul
dbe:

a. P22,
600

b. P23,
000

c. P23,
400

d. P26,
600
I
ncor
por
ati
onofPar
tner
shi
p

[61
]. Thecondensedbal
ancesheetoft
hepar
tner
shi
pofKenSyandBenTyasof
December31
,201
1showedthefol
l
owing:

Tot
alasset
s P200,
000

Tot
all
i
abi
l
it
ies 40,
000

KenSy,capi
tal 80,
000

BenTy,capi
tal 80,
000

Ont hi
sdat
e,thepar t
nershi
pwasdi ssol
vedandi tsnetassetswer et
ransferredtoanewl y-
for
medcor porati
on.Thefai
rvalueoftheassetswasP24, 000mor ethant hecarryingvalue
ofthefi
rm’
sbooks.Eachoft hepar
tnerswasissued1 0,000shar esofthecor por
at i
on’sP1
parcommonst ock.I
mmedi atel
yaf
tereff
ecti
ngt hetransf
eroft henetassets,andt he
i
ssuanceofstock,thecorporati
on’
sadditi
onalpaidincapitalaccountwoul dbecr edit
edf or
:

a. P1
36,
000

b. P1
40,
000

c. P1
54,
000

d. P1
64,
000

[62]. Mac,Kuh,andNat ,partnersshari

ngprofit
sandl ossesequall
y,decidedt ofor
ma
corporation.Theyhavecapi t
al balances,r
especti
vely,ofP100,000,P100,
000,and
P200,000,andal l
oftheirassetsandl i
abil
i
tieswil
lbet r
ansferr
edtothecor porat
ion.Theirnet
assetswi l
lberevaluedfrom P400, 000toP550, 000,wi t
hthesubstanti
alreval
uationduet o
l
andwhi chwasor igi
nall
ycontr i
butedbyNatatP1 00, 000.AtP1 0parval
ue,thepar tner
sar e
toreceiveshar esofstockasf oll
ows :

a. 1
0,000,1
0,000,and35,
000,r
espect
ivel
y

b. 1
2,500,1
2,500,and30,
000,r
espect
ivel
y
c. 1
5,000,1
5,000,and25,
000,r
espect
ivel
y

d. 1
8,333,1
8,333,and1
8,334,r
espect
ivel
y

[63]. Par t
nersRobandRoy,whoshar
eequal
l
yinpr
ofi
tsandl
oses,havet
hef
oll
owi
ng
balancesheetasofDecember31,201
1:

Cash P1
20,
000 A/
Payabl
e P1
72,
000

A/
recei
vabl
e 1
00,
000 Accum.Dep’
n. 8,
000

M/
Invent
ory 1
40,
000 Rob,capi
tal 1
40,
000

Equi
pment 80,
000 Roy,capi
tal 1
20,
000

Tot
al P440,
000 Tot
alequi
ti
es P440,
000

Theyagr eedt oi
ncorporat
etheirpartner
shi
p,withthenewcor porati
onabsorbingthe
netasset safterthefoll
owingadjust
ment s:provi
si
onofal l
owancef orbaddebt sofP10,000;
statementoft hei nvent
oryatit
scurrentfai
rvalueofP160,000;and,recogniti
onoffurther
depr eciat
ionont heequipmentofP3, 000.Thecor porati
on’scapit
alst
ockistohaveapar
valueofP1 00,andt hepartner
saretobei ssuedcorr
espondi ngtot
alsharesequival
entto
theiradjustedcapi t
albal
ances.

Thet
otal
parval
ueoft
heshar
esofcapi
tal
stockt
hatwer
eissuedt
opar
tner
sRobandRoy
was:

a. P260,
000

b. P267,
000

c. P273,
000

d. P280,
000

Par
tner
shi
pLi
qui
dat
ion(
Lump-
sum &I
nst
all
ment
)
[65]. Gar doandGor doformedapar t
nershiponJuly1 ,2011tooperatet
wost or
estobe
managedbyeachoft hem.Theyinvest
edP30, 000andP20, 000andagr eedtoshare
earni
ngs60% and40% r especti
vel
y.Al
lthei
rtransacti
onswer eforcash,andall
thei
r
subsequentt
ransact
ionswerehandledthrought hei
rrespecti
vebankaccountsas
summar i
zedbelow:

Gar
do Gor
do

Cashr
ecei
pts P79,
100 P65,
245

Cashdi
sbur
sement
s 62,
275 70,
695

OnOct ober31
,2011,all
remai
ningnoncashassetsint
hetwostor
esweresol
dforcashof
P60,000.Thepart
nershi
pwasdi ssol
ved,andcashset
tl
ementwasef
fect
ed.I
nthe
di
str
ibuti
onoftheP60,000cash,Gardor ecei
ved

a. P24,
000

b. P26,
000

c. P34,
000

d. P36,
000

[
66]. Thepar tnerAA,Bi
da,Cit
a,andDina,whoshareprofi
tsandlossesinther
especti
ve
r
ati
oof3:
3:2:
2,decidedt
oli
quidat
ethei
rpartner
shi
p.Justpr
iortol
iqui
dation,t
heyprepar
ed
t
hefol
l
owingsummar ybal
ancesheet:

Cash P 1
00,
000 Li
abi
l
it
ies P 750,
000

Ot
herasset
s 1
,800,
000 Bi
da,l
oan 1
60,
000

Di
na,l
oan 50,
000

AA,capi
tal 420,
000

Bi
da,capi
tal 21
5,000
 Ci
ta,capi
tal 205,
000

Di
na,capi
tal 1
00,
000

Tot
al P1
,900,
000 Tot
al P1
,900,
000

Thenoncashassetsr
eali
zedP800,
000.I
fal
lthepartner
sarepersonal
lysol
vent
,
defi
ciency/
def
ici
enci
es,r
esul
ti
ngfr
om t
heli
quidat
ionprocess,wi
ll
requir
eaddit
ional
cash
fr
om:

a. Bi
daatP85,
000andDi
naatP1
00,
000

b. Bi
daatP85,
000

c. Di
naatP50,
000

d. Noneoft
heabove

[67]
. Thebal ancesheetofthepar
tnershi
pofSal
ve,Gi
l
da,andNor
a,whoshar
epr
ofi
ts
andlossesi
ntherespect
iverat
ioof5:
3:2,fol
l
ows:

Asset
s Li
abi
l
it
iesandCapi
tal

Cash P 30,
000 Li
abi
l
it
ies P 50,
000

Ot
herasset
s 320,
000 Sal
ve,capi
tal 80,
000

Gi
l
da,capi
tal 1
15,
000

Nor
a,capi
tal 05,
000

Tot
al P350,
000 P350,
000

Thepartnersagreedtol
iqui
datethepart
ner
shipbyinst
all
ment
s.I
mmedi at
elyther
ewasa
real
izat
ionofP100,000cashfrom sel
l
ingot
herassetswit
habookvalueofP150,000.Oft
he
cashavailabl
e,t
heprior
it
yisthepaymentofthel
iabi
li
ti
esandt
hebalanceistobedist
ri
but
ed
tothepartner
s.

Howshoul
dther
emai
ningcashbedi
str
ibut
ed.

a. Sal
ve,P50,
000;Gi
l
da,P30,
000;and,Nor
a,P20,
000.

b. Sal
ve,P40,
000;Gi
l
da,P24,
000;and,Nor
a,P1
6,000.

c. Sal
ve,P-
--0-
--;Gi
l
da,P31
,000;and,Nor
a,P49,
000.

d. Sal
ve,P-
--0-
--;Gi
l
da,P48,
000;and,Nor
a,P32,
000.
Questi
ons68thr
ough70ar
ebasedont
hef
oll
owi
ngdat
afr
om t
her
ecor
dsofABC
Par
tnershi
p:

ABCPar
tner
shi
p

Bal
anceSheet

December31
,201
0

Ass
ets

Cash P 2,
000

Ot
herNoncashAsset
s 28,
000

Tot
al P30,
000

Li
abi
l
it
ies&NetWor
th

Li
abi
l
it
ies P 5,
000

A,l
oan 2,
500

A,capi
tal 1
2,500

B,capi
tal 7,
000

C,capi
tal 3,
000

Tot
al P 30,
000

Prof
itandl
ossrat
ioi
s3:
2:1f
orA,B,andC,r
espect
ivel
y.Theot
hernon-
cashasset
swer
e
real
i
zedasfol
lows:

Dat
e CashRecei
ved BookVal
ue
Jan.,201
1 P 6,
000 P 9,
000

Feb.
,201
1 3,
500 7,
700

Mar
.,201
1 1
2,500 1
1,300

Cashi
sdi
str
ibut
edasasset
sar
ereal
i
zed.

[
68]
. Thet
otal
losst
oAi
s

a. P3,
000

b. P2,
000

c. P1
,000

d. P0

[
69]
. Thet
otal
cashr
ecei
vedbyBi
s:

a. P2,
200

b. P0

c. P5,
000

d. P1
,500

[
70]
. Cashr
ecei
vedbyCi
nJanuar
yis:

a. P 200

b. P1
,000

c. P 500

d. P0

[71]
. X,YandZhavecapi talbal
ancesofP40,
000,P50,000,andP1 8,
000andaprofi
t-
shari
ngrat
ioof4:
2:1
,respect
ively.I
fXrecei
vedP8,000uponli
quidat
ionofthepar
tner
shi
p,
thetot
alamountr
eceivedbyal l
thepart
nerswas:

a. P1
08,
000

b. P 56,
000
c. P 52,
000

d. P 24,
000

[
72]
. Ass umethesamef actsabove,exceptt
hatXr
ecei
vedP26,
000asar
esul
toft
he
l
i
qui
dat
ion.Zrecei
ved,aspartoft
heliqui
dati
on,t
heamountof
:

a. P26,
000

b. P1
4,500

c. P1
8,000

d. P1
4,000

[73]. SanchezandTanar epar t

nersshari
ngprofi
tsequal
l
yandwi t
hcapit
albalances,
respecti
vel
y,ofP750,000andP500, 000.Thefi
rm owesTanP200,000,asevi
dencedbya
promissorynote.Uponli
quidat
ion,cashofP300,000becomesavailabl
efordi
str
ibuti
onto
t
hepar tners.I
nthefi
nalcashdist
ri
but i
on,t
herespecti
veshar
esofSanchezandTanwi l
lbe:

a. P1
50,
000 andP1
50,
000

b. P1
75,
000andP1
25,
000

c. P200,
000andP1
00,
000

d. P275,
000andP 25,
000

[74]
. Af t
eroperat
ingforfi
veyear
s,t
hepart
ner
shi
pofRemyandMar
ti
n,whoshar
e
prof
it
sandl
osesequall
y,hadbal
ancesasf
oll
ows:

Netasset
s P1
30,
000

Remy,capi
tal 85,
000

Mar
ti
n,capi
tal 45,
000

I
fli
quidat
iont
akespl
aceatt
hist
imeandt
heasset
sar
ereal
i
zedatbookval
ue,Remyand
Marti
nwouldbeenti
tl
edt
orecei
ve:

a. P65,
000andP65,
000,r
espect
ivel
y.

b. P85,
000andP45,
000,r
espect
ivel
y.

c. P90,
000andP40,
000,r
espect
ivel
y.
d. P97,
500andP32,
500,r
espect
ivel
y.

[
75]
. Thecondensedbal
ancesheetofAl
ex,JayandJohn,asofMar
ch31
,201
1fol
l
ows:

Cash P 28,
000 Li
abi
l
it
ies P 48,
000

Ot
herasset
s 265,
000 Al
ex,capi
tal 95,
000

Jay,capi
tal 80,
000

John,capi
tal 70,
000

Tot
alasset
s P293,
000 Tot
alequi
ti
es P293,
000

Thei ncomeandlossrati
ois50: 25:25,respecti
vel
y.Thepartner
svot edt
odissol
vet
heir
partnershi
pandli
qui
datebysel li
ngt heotherassetsi
ninstal
l
ment s.TheamountofP70,
000
wasr eali
zedt
othefir
stcashsal eofot herassetswit
habookval ueofP1 50,
000.Af
ter
sett
lementwithcr
editor
sallcashavai l
ablewasdi st
ri
butedtothepar t
ner
s.Howmuchwas
receivedbyJohninthecashdi str
ibuti
on?

a. P30,
000 c.P21
,250

b. P20,
000 d.P31
,250

[76]. Jo,Lee,andVi arepart

nersshari
ngpr ofi
ts30%,20%,and50%,andwi thcapital
balancesofP350, 000,P250,000,andP350, 000,respect
ivel
y.Thepar t
nersagreedto
dissol
vet hei
rpart
nershipand,uponli
quidat
ion,all
ofthepar t
nershi
p’sasset
saresoldand
suffi
cientcashisr
eali
zedt opayall
clai
msexceptonef orP50,000.Vi i
spersonal
lyi
nsolvent,
buttheot hert
wopar tnersar
ecapableofmeet inganyindebtednessoft hef
irm.Ofthe
remainingclai
m againstthefi
rm,Joistoabsorb:

a. P1
5,000

b. P25,
000

c. P30,
000

d. P40,
000
[77]. OnOct ober31,201
1,Ivy,I
rma,andIr
ene,whoshar
eear ni
ngs5:3:
2respect
ivel
y,
decidedtol
i
qui
datethei
rpar
tnershi
patwhichti
methei
rcondensedbalancesheetwasas
fol
lows:

Cash P 50,
000 Li
abi
l
it
ies P 60,
000

Ot
herasset
s 250,
000 I
vy,capi
tal 80,
000

I
rma,capi
tal 90,
000

I
rene,capi
tal 70,
000

Tot
alasset
s P300,
000 Tot
alequi
ti
es P300,
000

I
fthef
ir
stcashsal
eofasset
sbookedatP150,
000r
esul
tedi
nnetr
eal
i
zat
ionofP1
20,
000,
t
heamounttobedist
ri
butedtoI
renewoul
dbe:

a. P1
5,000

b. P44,
000

c. P51
,000

d. P60,
000

[l
xxvii
i
]. Dan,Ely,andFildeci
dedt
odissolvet
hei
rpart
ner
shi
ponMay31 ,201
1.Ont
his
date,thei
rcapi
tal
balancesandprof
it
-shar
ingpercent
swereasf
oll
ows:

Dan P50,
000 40%

El
y 60,
000 30%
Fi
l 20,
000 30%

Theneti ncomef r
om January1t oMay31 ,2011wasP44, 000.AlsoonMay31 ,201
1,the
partnershi
p’scashandli
abil
it
ies,respecti
vel
ywer eP40,000andP90, 000.ForDanto
receiveP55,200inful
lsett
lementofhi sint
eresti
nthepartnershi
p,howmuchmustbe
real
izedf r
om thesal
eofthepar tnershi
p’snon-cashasset
s?

a. P1
77,
000

b. P1
87,
000

c. P1
90,
000

d. P1
93,
000

[l
xxix]
. Bach,Li zst,andStr
auss,shar
ingprof
itsandlosses4:
4:2,deci
dedtoli
qui
datet
hei
r
partnershi
p.Justpr
iortoli
qui
dati
on,thepart
nershi
p’scondensedbalancesheetwasas
fol
lows:

Cash P1
00,
000 Li
abi
l
it
ies P1
40,
000

Ot
herasset
s 400,
000 Bach,l
oan 1
0,000

Bach,capi
tal 45,
000

Li
zst
,capi
tal 1
05,
000

St
rauss
,capi
tal 200,
000

Tot
al P500,
000 Tot
al P500,
000

TheotherassetsweresoldforP247,
500,andt hepar t
nersagreedtomakeadditi
onalcash
cont
ri
buti
onst oanswerforanycapit
aldefi
ciency.Ident
if
ythedefici
entpar
tner
,andindicat
e
hi
sadditi
onalcashcontr
ibut
iontofi
nall
yli
quidatethepartner
ship:

a. Bach,P 6,
000

b. Bach,P1
6,000

c. Li
zst
,P30,
500

d. St
rauss,P44,
000

[l
xxx]. Tom,Umi andVi
cdeci
dedtodissol
vet
hei
rpar
tner
shi
ponMay31
,201
1.Ont
his
date,t
hei
rcapi
tal
bal
anceswer
easfol
lows :
Tom P50,
000 40%

Umi 60,
000 30%

Vi
c 20,
000 30%

Theneti
ncomef r
om January1t oMay31 ,2011wasP44,000.Al
soonMay31,201
1,t
he
part
ner
shi
p’scashandli
abil
i
ties,respect
ivelywereP40,
000andP90,000.Whatwast
he
bookval
ueofthepart
nershi
p’snon- cashassetsonMay31 ,2011?

a. P1
80,
000

b. P1
90,
000

c. P220,
000

d. P224,
000

-
END-

ANSWERS

[
1]. Let
ter“
B”i
sthecor
rectanswer
.

Thepr oblem i
mpl i
esthatthecont r
ibuti
onofEmi li
sal
readyadequat etoent i
tl
ehimtoa60%
shareint hetotalagreedcapitaloft hepartnershi
p.Hence,t het ot
alagr eedcapit
ali
zati
on
shall
bebasedonhi scontr
ibut
ionofP300, 000orP500, 000( P300,000÷60%) .Theagreed
capit
al ofPearli
s40% ofP500, 000orP200, 000andhercashcont r
ibut
ionshallbeequal t
o
thediff
erencebet weent hi
samount( P200,000)andthenetf ai
rvalueoft henoncashassets
sheinvested.Thenetf ai
rvalueoftheot herassetscontr
ibut
edbyPear li
sequal toP120,
000,
(P70,000 + P90, 000 – P40,000) .Therefore,hercash cont r
ibuti
on should be equalto
P80,000( P200,000–P1 20,000).

[
2]. Let
ter“
D”i
sthecor
rectanswer
.

Undert he goodwi l
lmet hod,t he totalagreed capit
alshould be mor ethan the t
otal
contr
ibutedcapit
al.Totalagreedcapi t
alwil
lbemor ethanthetotal
contr
ibutedcapi
tal
onlyif
thecontribut
ionofGr eeni susedast hebasisofthet ot
alagreedcapit
ali
zati
on.Sincethe
fai
rvalueoft hecontributi
onofGr eenamount stoP60, 000,thenthetotalagr
eedcapital
mustbeP1 20,
000 (P60, 000 ¸50%) . Thei ni
ti
alcapitalofRed ther
eforeamount ed t
o
P60,000or50% ofP1 20,000asagr eedbyt hepartner
s.
[
3]. Let
ter“
B”i
sthecor
rectanswer
.

Theamountt ober ecordedascapit

alofthepart
nersshoul
dbebasedont hefai
rvalueof
thenetasset(
totalasset
s–totall
i
abil
i
ti
es)cont
ri
butedbyeachoft hem.Hence,thecapital
balancesforPir
anteandWi lsonshouldbeP70,000andP1 50,
000,respect
ivel
y. These
amount sar
ecomput edasfol
lows:

Pi
rant
e Wi
l
son

Asset
scont
ri
but
ed:

Cash P40,
000 P 60,
000

I
nvent
ory - 30,
000

Bui
l
ding - 80,
000

Fur
nit
ureandEqui
pment 30,
000 -

Tot
al P70,
000 P1
70,
000

Lessmor
tgageassumed - 20,
000

Netasset
scont
ri
but
ed P70,
000 P1
50,
000

[
4]. Let
ter“
B”i
sthecor
rectanswer
.

Undert hebonusmet hod,apor t

ionoft hecapit
alofonepar tnerist ransferredtoanot her
partner .Inthiscase,t hetotalagreedcapit
alisassumedt obeequalt ot hetotalcontri
buted
capital,P276, 000 ( P150,000 + P1 26,
000),and eachpar t
nershal lbecr edit
ed one- hal
f
(accor dingtoagr eement )orP1 38,000.Thepar t
nerwhocont ributedmor et hanhisagr eed
capitalcr edi
tistheonewhogaveabonuswhi l
et heonewhocont ri
but edcapitallessthan
hisagr eed capitalcr edi
tist he one who received it. Bel
en cont r
ibuted P1 26,000 but
receivedP1 38,000( 50% xP276, 000)capit
alcr edit
,hence,her ecei vedbonusequalt o
P12,000 ( P138,000- P126,000)f rom AA who cont ri
buted P1 50,000 butr eceived only
P138, 000capi talcredit.

[
5]. Let
ter“
B”i
sthecor
rectanswer
.

Thepart
ner
s’capit
albal
ancesuponf
ormat
ionwoul
dbeP1
00,
000,P1
0,000,and
P1
00,
000,r
espect
ivel
y.

[
6]. Let
ter“
C”i
sthecor
rectanswer
.

Kat
hy’
scapi
talaccountshoul
dbecr
edi
tedf
ort
he50% oft
het
otalagr
eedcapi
talwhi
chi
s
assumedtobeequalt
otheact
ualcapi
talcont
ri
but
edbyt
hepar
tner
sorP1
84,
000[
50% x
(P200,
000+P168,
000)]

[
7]. Let
ter“
C”i
sthecor
rectanswer
.

Thepar
tnerwi
tht
hebi
ggestcapi
tal
accountbal
anceasofMay31
,201
1isCi
p,comput
edas
fol
l
ows:

Al
l
en Bel
en Cenen

Cash P50,
000 P - P-

Noncashasset - 80,
000 55,
000

Mor
tgage - (
35,
000) -

Capi
tal
accountbal
ances P50,
000 P45,
000 P55,
000

Eachpar
tnerval
ueshiscontr
ibut
ionati
sfai
rval
ue,r
educedbyt
heamountofany
l
i
abi
l
it
yassumedbythepar
tnershi
p.

[
8]. Let
ter“
D”i
sthecor
rectanswer
.

Underthe bonusmethod,goodwi
l
lisnotr
ecogni
zed;t
hus,t
her
e woul
d be no
uni
dent
if
iabl
eassett
oberecorded.

[
9]. Let
ter“
C”i
sthecor
rectanswer
.

Theamountofcashcontr
ibutedbyCar
la,i
fini
ti
albal
ancesaret
oconf
ormt
othe
pr
ofi
t-shar
ingr
ati
oof2:
3,r
espect
ivel
ywasP40,
000,computedasfol
l
ows:

Capi
tal
cont
ri
but
edbyCl
ara:

Mer
chandi
seatf
airval
ue P25,
000

Del
i
ver
ytr
uckatf
airval
ue 50,
000

Mor
tgagenot
epayabl
eassumed (1
5,000)

Cl
ara’
scont
ri
but
ion P60,
000

Di
vi
dedbypr
ofi
tshar
eofCl
ara 3/
5
Tot
alagr
eedcapi
tal P1
00,
000

Mul
ti
pli
edbyCar
la’
spr
ofi
tshar
erat
io 2/
5

Car
la’
scashcont
ri
but
ion P40,
000

[
10]
. Let
ter“
B”i
sthecor
rectanswer
.

Uponfor
mat i
on,thenetasset
soft
hepartner
shi
pisequalt
othetotalf
airval
ueofthe
asset
scont
ri
butedlessanyamountofli
abil
i
ti
esassumedbythepartner
ship,hencethenet
asset
soft
hepartnershi
pisequalt
oP,computedasfol
l
ows:

Asset
scont
ri
but
edby:

AA P1
00,
000

BB 1
0,000

CC 1
00,
000

Tot
al P21
0,000

Lessl
i
abi
l
it
iesassumed 1
0,000

Netasset
scont
ri
but
edbyt
hepar
tner
s P200,
000

[
11]
. Let
ter“
B”i
sthecor
rectanswer
.

Thecapi
talbal
anceofMeland Garriassumi
ng t
heyagr
eet
o shar
ethei
rcapi
tal
equal
l
ywouldbeP72,500,comput
edasf
oll
ows:

Unadj
ust
edcapi
tal
(P78,
500+P70,
000) P1
48,
500

I
nvent
orywr
it
e-up 3,
000

Al
l
ow.f
orbaddebt
s(P1
,000+P1
,500) (2,
500)

I
ncr
easei
naccount
spayabl
e (
4,000)

Adj
ust
edcapi
tal P1
45,
000

Di
vi
deby 2

Capi
tal
bal
anceofeachpar
tner P72,
500

[
12]
. Let
ter“
C”i
sthecor
rectanswer
.
I
fChona is al
l
owed goodwi
llcr
editequalt
o 20% ofheri
nit
ialcapi
tal
,Char
o’s cash
cont
ri
but
ionwasP25,
000,computedasfol
l
ows:

Chona’
sini
ti
alcapi
tal
(P60,
000/
80%) P 75,
000

Di
vi
dedbyChona’
scapi
tal
shar
e ¾ or75%

Tot
alagr
eedcapi
tal
oft
hepar
tner
s P1
00,
000

Mul
ti
pli
edbyChona’
scapi
tal
shar
e ¼ or25%

Char
o’scashcont
ri
but
ion P 25,
000

Chona’sini
ti
alcapi
tali
sequaltohernetasset
scontr
ibut
ionwhi
chi
s80% plushergoodwi
ll
credi
tof20%.Char o’
scashcont r
ibut
ionisequalt
oone- f
our
th(¼)oftotalpar
tner
shi
p
capit
alor1/
3ofChona’ scapi
tal
.

[
13]
. Let
ter“
B”i
sthecor
rectanswer
.

The capit
albal ances ofthe par
tner
s upon f
ormat
ion ar
e P1
80,
000,P1
92,
000,and
P204,000,respecti
vel
y,computedasfol
lows:

I
nvest
ment
s: Fl
ores Per
alt
a Jose

Cash P1
20,
000 P1
92,
000 P 60,
000

Equi
pment 60,
000

Tr
uck 1
44,
000

Capi
tal
bal
ances P1
80,
000 P1
92,
000 P204,
000

[
14]
. Let
ter“
B”i
sthecor
rectanswer
.

EJ’
sadj
ust
edcapi
tal
bal
ancei
sP80,
000comput
edasf
oll
ows:

EJ’
scapi
tal
bef
oreadj
ust
ment(
given) P78,
500

Add(
deduct
)adj
ust
mentf
or:

Al
l
owancef
ordoubt
ful
account
s P(
1,500)
 I
nvent
oryi
ncr
ease 3,
000

Netadj
ust
ment 1
,500

EJ’
sadj
ust
edcapi
tal
bal
ance P80,
000

[
15]
. Let
ter“
A”i
sthecor
rectanswer
.

Non-cashassetscont
ri
butedt
oanent
it
yshouldber
ecor
dedatfai
rmarketval
ueatthedat
e
ofcont
ribut
ion.Thecr
eati
onofanewent
it
ycreat
esanewaccount
abi
l
it
yf ort
heseasset
s.

[
16]
. Let
ter“
C”i
sthecor
rectanswer
.

Thecapi
talaccountofPulaandPutii
mmediat
elyaftertheformati
onoft hepart
ner
shi
p
woul
dhavebal ancesequalt
oP287,
070andP123,030,respect
ivel
y.Theseamountswer
e
comput
edasf oll
ows:

Capi
tal
ofPul
abef
oreadj
ust
ment
s P300,
000

Add(
deduct
)adj
ust
ment
s:

I
ncr
easei
ndepr
eci
ati
on (
7,500)

Reduct
ioni
npr
epai
dexpenses (
2,400)

Adj
ust
edcapi
tal
ofPul
a P290,
100

Addcashcont
ri
but
edbyPut
i 1
20,
000

Tot
alagr
eedcapi
tal P41
0,1
00

Shar
eofPul
a(70% xP41
0,1
00) P287,
070

Shar
eofPut
i(30% xP41
0,1
00) P1
23,
030

[
17]
. Let
ter“
D”i
sthecor
rectanswer
.

Thecapi t
alcont
ri
but
edbyFebi sP280, 000(P70,000+P75, 000+P225, 000–P90, 000)
,
thetotalagr
eedcapit
alistheref
oreequaltoP400, 000( P280,
000/70%),30% ofwhichor
P120,000 shoul
d be cr
edited t
o Jhan. Since hisini
ti
alcapit
alcontr
ibut
ion i
sP65,000
(P30,000+P25,000+1 0,000)only,heneedstoinvestP55,000more(P120,000-P65,
000)
.
[
18]
. Let
ter“
A”i
sthecor
rectanswer
.

Part
ners’capit
albalancesuponfor
mationar
eBel
,P75,
000;Joy,P80,
000,andFr
anco,
P85,000,respect
ivel
y,comput
edasfol
l
ows:

Bel

Joy

Fr
anco

Cash

P50,
000

P80,
000

P25,
000

Non-
cashasset
s

25,
000

------
-

60,
000

I
nit
ial
capi
tal
bal
ances

P75,
000

P80,
000

P85,
000

[
19]
. Let
ter“
B”i
sthecor
rectanswer
.

I
fJimenezist
oinvestcashf
ora2/ 5int
erestinthepar
tnershi
p,i
tmeansthatt
headj
ust
ed
capi
talofMar
kis3/5ofthet
otalagr
eedcapi t
al.Theadjust
edcapit
alofMarki
scomput
ed
asfol
lows:

Capi
tal
bef
oreadj
ust
ment
s(Sub-
comput
ati
ona) P264,
000

Addnetadj
ust
ment
s(Sub-
comput
ati
onb) 21
,000

Adj
ust
edCapi
tal
ofMar
k P285,
000

Sub-
comput
ati
ona:

Cash P26,
000
Account
srecei
vabl
e 1
20,
000

I
nvent
ory 1
80,
000

Account
spayabl
e (
62,
000)

Unadj
ust
edCapi
tal
ofMar
k P264,
000

Sub-
comput
ati
onb:

Al
l
owancef
ordoubt
ful
account
s[3% xP1
20,
000] (
P3,
600)

I
ncr
easei
nmer
chandi
sei
nvent
ory 25,
000

Recogni
ti
onofPr
epai
dexpens
es 3,
600

Recor
dingofaccr
uedexpenses (
4,000)

Netadj
ust
mentt
ocapi
tal
ofMar
k P21
,000

Totalagreed capi
tali
stheref
ore equalto P475,
000 (P285,000 ÷ 3/
5),2/5 oft
hisor
P190,000(P475,000x2/5)belongstoJi
menezwhi chheagreedtoprovi
defori
ncash.

[
20]
. Let
ter“
D”i
sthecor
rectanswer
.

Thet
otal
asset
soft
hepar
tner
shi
pisequal
toP74,
000,comput
edasf
oll
ows:

Cash(
P2,
500+P20,
000) P22,
500

Account
srecei
vabl
e(P1
0,000–P500) 9,
500

Mer
chandi
seI
nvent
ory:

(
P15,
000–P3,
000+P1
0,000) 22,
000

Fi
xtur
es(
fai
rmar
ketval
ue) 20,
000

Tot
alasset
s P74,
000

21
]. Let
ter“
B”i
sthecor
rectanswer
.

Theadj
ust
edcapi
tal
ofSi
l
vanoi
sP1
16,
250,comput
edasf
oll
ows:

Tot
alAsset
s(comput
ati
ona) P1
32,
000

Lessaccount
spayabl
e(gi
ven) 8,
000

Capi
tal
bef
oreadj
ust
ment
s P1
24,
000
Lessnetadj
ust
ment
s(comput
ati
onb) 7,
750

Adj
ust
edcapi
tal
ofSi
l
vano P1
16,
250

Comput
ati
ona:

Cash P 30,
000

Account
srecei
vabl
e 25,
000

I
nvent
ory 45,
000

Fur
nit
ure 32,
000

Tot
alasset
s P1
32,
000

Comput
ati
onb:

Pr
ovi
si
onf
orbaddebt
s(3% xP25,
000) P 750

Reduct
ioni
ntheval
ueoff
urni
tur
e:

(
P32,
000–27,
000) 5,
000

Decr
easei
ntheval
ueofi
nvent
ory:

(
P5,
000–3,
000) 2,
000

Netadj
ust
ment
s P7,
750

[
22]
. Let
ter“
D”i
sthecor
rectanswer
.

Thet
otal
asset
soft
henewpar
tner
shi
pisequal
toP1
44,
250,comput
edasf
oll
ows:

Adj
ust
edcapi
tal
ofSi
l
vano P1
16,
250

Addaccount
spayabl
e 8,
000

Tot
aladj
ust
edasset
s P1
24,
250

Addcashi
nvest
mentofPegasus 20,
000

Tot
alasset
soft
henewpar
tner
shi
p P1
44,
250

[
23]
. Let
ter“
A”i
sthecor
rectanswer
.

Becausegainistoinvestcashasi
defrom P50, 000worthofmer chandi
seiti
sassumed that
t
headj ust
edcapitalofPai
nisequalt
ohi s2/3capital
share(1less1 /
3agreedshareofGain)
.
Hence,t ocomput ethetotalagr
eedcapi talofthepartner
shipaswel lasthecashtobe
i
nvestedbyGai n,Pain’
sadjust
edcapitalshouldbecomput edfirst
.Theadjustedcapi
talof
Pai
nisequal
toP1
65,
900,comput
edasf
oll
ows:

Capi
tal
bef
oreadj
ust
ment
s(gi
ven) P1
58,
400

Addnetadj
ust
ment(
comput
ati
ona) 7,
500

Adj
ust
edcapi
tal
ofPai
n P1
65,
900

Comput
ati
ona:

I
ncr
easei
ncapi
tal
duet
orec.ofpr
epai
dexp. P1
7,500

Decr
easei
ncapi
tal
duet
orec.ofaccr
ual (
5,000)

Decr
easei
ncapi
tal
duet
opr
ovi
si
onsf
orbaddebt
s (
5,000)

Netadj
ust
mentt
ocapi
tal
ofPai
n P 7,
500

Thetot
alagreedcapit
alofthepart
ner
shi
pisP248,850(P1
65,
900÷2/ 3)
,andt
hecapi
tal
shar
eofgainisP82,950(P248,
850x1/3)
,hence,t
hecashtobei
nvest
edbyGai
nisequal
toP32,
950(P82,950–P50,000).

[
24]
. Let
ter“
A”i
sthecor
rectanswer
.

Non-
cashassetscontri
butedtothepartner
shi
pshoul
dber ecordedatfai
rmarketvalueat
t
hedateofcontr
ibuti
on.Thefactthatt
hecomputerwassoldforP55,000i
mmedi at
elyaft
er
t
heformat
ionoft hepartner
shi
pindicat
esthati
tisi
tsfai
rmar ketval
ueonthedateoft he
f
ormati
onofthepartner
ship.

[
25]
. Let
ter“
B”i
sthecor
rectanswer
.

Theamountofasset stobecont r
ibutedbyViol
ettohaveaone- t
hir
dinter
esti
ncapitaland
profi
tshouldbeequaltoone-halfofthecombinedcontri
but
ionofYell
ow andOrange.The
tot
alcontri
buti
onofYel l
ow andOr angeisP1 20,000(P40,
000+P80, 000)
,theref
ore,to
haveone- t
hir
dinter
esti
nthepartnershi
p,Vi
oletshoul
dcontr
ibut
eP60,000orone-thi
rdofa
tot
alcapit
ali
zati
onofP180,000(P120,000+P60, 000)
.

[
26]
. Let
ter“
B”i
sthecor
rectanswer
.

Thecapi
tal
bal
anceofeachpar
tnershal
lbeequal
toP,comput
edasf
oll
ows:
 Wi
l
der Nest

Capi
tal
bef
oreadj
ust
ment
s P78,
500 P70,
000

Add(
deduct
)adj
ust
ment
s:

I
ncr
easei
ninvent
ory 3,
000

Recei
vabl
eswr
it
tenof
f (
1,000) (
1,500)

Accr
uedexpensesr
ecor
ded (
4,000)

Adj
ust
edcapi
tal
bal
ance P76,
500 P68,
500

Tot
alcapi
tal(
P76,
500+P68,
500) P1
45,
000

Di
vi
dedby 2

Capi
tal
bal
anceofeachpar
tner P 72,
500

[
27]
. Let
ter“
C”i
sthecor
rectanswer
.

Theamountofcashtobecont r
ibut
edbyClar
aisequival
entto2/5ofthetotal
agreedcapital
ofthepart
ner
shipwhichi
st obebasedonthecontr
ibuti
onofMar i
a.Thecapitalcontr
ibut
ed
byMar i
aisP60,000(P25,000+P50,000–P1 5,000),thetot
alagreedcapit
alisP100,000
(P60,
000÷3/ 5)
,henceClarashoul
dcont
ri
butecashequal t
oP40,000( 2/
5xP1 00,000).

[
28]
. Let
ter“
A”i
sthecor
rectanswer
.

IfAgainvestsP20, 000fora20% int

erest
,thentotalpar
tner
shipcapi
talmustbebasedon
Aga’sinvestmentorP1 00,
000(P20,000/
20%)andt hecapitalt
obecr edi
tedtoMatais
P80,000( P100,000–P20, 000)
.IfMatacontri
butesanequipmentwor t
hP50, 000,t
henhe
shouldinvestaddit
ional
cashamounti
ngtoP30,000( P80,000–P50,000).

[
29]
. Let
ter“
B”i
sthecor
rectanswer
.

Thecashi
nvest
edbyt
hepart
ner
sisequalt
oP20,
000cont
ri
but
edbyAgaandt
heP30,
000
i
nvest
edbyMataorat
otal
ofP50,000.

[
30]
. Let
ter“
A”i
sthecor
rectanswer
.

Thecapit
alofAlandMacmodshal
lbeequalt
oP,andP,r
espect
ivel
y.Theseamount
sar
e
computedasfol
lows:
 Al Macmod Tot
al

Cash P1
20,
000 P 80,
000 P 200,
000

Of
fi
ceequi
pment 84,
000 84,
000

Land 1
,000,
000 1
,000,
000

Bui
l
ding 600,
000 600,
000

Mor
tgageonbui
l
ding (
400,
000) (400,
000)

Capi
tal P204,
000 P1
,280,
000 P1
,484,
000

[
31]
. Let
ter“
B”i
sthecor
rectanswer
.

Theaver
agecapi
tal
bal
anceofMr
.Boom dur
ing201
1,i
sP8,
800,comput
edasf
oll
ows:

Januar
y1I
nvest
ment
: P8,
000x1
2/1
2 P8,
000

Apr
il 1I
nvest
ment 1
,600 x 9/
12 1
,200

June 1I
nvest
ment 1
,600x 7/
12 933

Sept
. 1I
nvest
ment (
4,000)x 4/
12 (
1,333)

Mr
.Boom’
saver
agecapi
tal
bal
ancedur
ing201
1 P 8,
800

[
32]
. Let
ter“
B”i
sthecor
rectanswer
.

Theneti
ncomeoft
hepar
tner
shi
pfor201
1wasP1
20,
000,comput
edasf
oll
ows:

Wi
thdr
awal P1
04,
000

Addi
ti
onal
invest
ment (20,
000)

Netdecr
easei
ncapi
tal (48,
000)

Dul
ce’
sshar
einneti
ncome P36,
000

Di
vi
debyDul
ce’
sP&Lr
ati
o 30%

Par
tner
shi
p’sneti
ncomef
ort
heyear201
1 P1
20,
000

[
33]
. Let
ter“
B”i
sthecor
rectanswer
.

Placi
do’
s capi
talaccountbal
ance woul
d decr
ease i
nthe amountofP22,
000,
computedasfol
lows:
 Tot
al Pl
aci
do

I
nter
est
s:

P440,
000x1
0% ;P80,
000x1
0% P44,
000 P 8,
000

Sal
ari
es 1
00,
000 40,
000

Bal
ance(
def
ici
ency)
,equal
l
y (21
0,000) (
70,
000)

Netpr
ofi
t(l
oss) P(
66,
000) P(
22,
000)

[
34]
. Let
ter“
D”i
sthecor
rectanswer
.

Zeep’
sshar
einneti
ncomef
or201
1isP600,comput
edasf
oll
ows:

Beep

Zeep

Tot
al

Sal
ary

P1
6,000

P7,
200

P23,
200

1
0% i
nter
estonbeg.cap.

1
,600

2,
000

3,
600

Remai
nder
:equal
l
y

(
8,600)

(
8,600)

(
17,
200)

Neti
ncome

P 9,
000

P 600
P 9,
600

[
35]
. Let
ter“
B”i
sthecor
rectanswer
.

The amountofear
ningst
hatshould be credited t
o each par
tner
’saccountar
e
P43,
000andP37,000,f
orRedandWhi
te,respect
ively,computedasfoll
ows:

Red Whi
te Tot
al

Sal
aryal
l
owances P55,
000 P45,
000 P1
00,
000

Lossaf
teral
l
owances(
60:
40) (1
2,000) (8,
000) (20,
000)

Ear
ningscr
edi
tedt
opar
tner
s P43,
000 P37,
000 P 80,
000

[
36]
. Let
ter“
B”i
sthecor
rectanswer
.

Thebonust
oPer
ezi
n201
1isP1
8,000,comput
edasf
oll
ows:

Netpr
ofi
taf
tersal
ary,i
nter
est
,andbonus P 32,
000

Sal
aryofPer
ez(
P5,
000x1
2) 60,
000

I
nter
estonst
art
ingcapi
tal
s(P200,
000x5%) 1
0,000

Netpr
ofi
tbef
oresal
aryandi
nter
est
,

butbef
orebonus P1
02,
000

Di
vi
deby 85%

Netpr
ofi
tbef
oresal
ary,i
nter
est
,andbonus P1
20,
000

BonusofPer
ezi
n201
1(P1
20,
000x1
5%) P1
8,000

[
37]
. Let
ter“
D”i
sthecor
rectanswer
.

TheP176,
000oper atingi
ncomeisdi
videdasHer
m,P53,
180;Mar
c,P62,
060;andAl
ex,
P60,
760,r
espect
ively,comput
edasf
oll
ows:
 Her
m:P1
50,
000x1
2/1
2 P1
50,
000

30,
000x 6/
12 1
5,000

(
10,
000)x3/
12 (
2,500)

Aver
ageCapi
tal P1
62,
500

Mar
c:P200,
000x1
2/1
2 P200,
000

20,
000x5/
12 8,
333

(
10,
000)x3/
12 (
2,500)

Aver
agecapi
tal P205,
833

Al
ex:P250,
000x1
2/1
2 P250,
000

(
30,
000)x2/
12 (
5,500)

Aver
agecapi
tal P245,
000

Her
m

Mar
c

Al
ex

Tot
al

Sal
aryal
l
owances

P24,
000

P1
8,000

P1
2,000

P54,
000

1
2% i
nter
estonaver
agecapi
tal

1
9,500

24,
700
29,
400

73,
600

Remai
nder
,2:
4:4

9,
680

1
9,360

1
9,360

48,
400

Di
vi
si
onofope.i
nc.

P53,
180

62,
060

P60,
670

P1
76,
000

[
38]
. Let
ter“
D”i
sthecor
rectanswer
.

Thepart
ners’capi
talbalancesonDecember31 ,2011areHer
m,P223,
180;Mar
c,
P272,
060;andAlex,P280,760,respect
ivel
y,comput
edasf
oll
ows:

Her
m

Mar
c

Al
ex

Capi
tal
bal
ances,Jan.1

P1
50,
000

P200,
000

P250,
000

Addi
ti
onal
cont
ri
but
ions

30,
000

20,
000
 -

Dr
awi
ngs

(
10,
000)

(
10,
000)

(
30,
000)

Shar
einoper
ati
ngi
ncome(
6)

53,
180

62,
060

60,
760

Capi
tal
bal
ances,Dec.31
,201
1

P223,
180

P272,
060

P280,
760

[
39]
. Let
ter“
B”i
sthecor
rectanswer
.

I
ncaseofaprofi
t,Bi
ng’
sshar
ewi l
lbe20% pl
us40% oft
her
emai
ning80%,orat
otalof
52%;i
ncaseofal
oss,Bi
ng’
sshar
ewi l
lonl
ybe40%.

[
40]
. Let
ter“
B”i
sthecor
rectanswer
.

ThebonusofMi
chel
l
efort
heyear201
1isP48,
000,comput
edasf
oll
ows:

Mi
chel
l
e’sbonus(
P240,
000¸1
25%)x25% P48,
000

[
41]
. Let
ter“
C”i
sthecor
rectanswer
.

Mar
k Val
eri
e Nor
a Tot
al

Cont
ri
but
edcapi
tal P200,
000 P1
00,
000 P1
50,
000 P450,
000

Bonus(
3:1
)

Nor
a’sAC P225,
000

Nor
a’sCC 1
50,
000
 P 75,
000

Fr
om Mar
k x¾ (
56,
250) 56,
250

Fr
om Val
eri
e x¼ (1
8,750) 1
8,750

Agr
eedcapi
tal P1
43,
750 P 81
,250 P225,
000 P450,
000

[
42]
. Let
ter“
C”i
sthecor
rectanswer
.

Cont
ri
but
ionofJoey P1
20,
000

Agr
eedcapi
tal
rat
io 1
/3

Tot
alagr
eedcapi
tal P360,
000

[
43]
. Let
ter“
A”i
sthecor
rectanswer
.

Capi
tal
ofLi
z P24,
000

I
nter
estpur
chased 1
/2

Capi
tal
credi
tofSunshi
ne P1
2,000

[
44]
. Let
ter“
A”i
sthecor
rectanswer
.

Sar
ah’
scont
ri
but
ion P1
,000,
000

Di
vi
dedbyi
nter
estboughtone-
four
th

Tot
alagr
eedcapi
tal P4,
000,
000

[
45]
. Let
ter“
B”i
sthecor
rectanswer
.

Thet
otal
amountof“
goodwi
l
l”f
ort
heol
dpar
tner
sisP1
5,000,comput
edasf
oll
ows:

Tot
alagr
eedcapi
tal
uponVi
nce’
sadmi
ssi
on P330,
000

Less:NetAsset
saf
terVi
nce’
sinvest
ment
:

Tot
alol
dpar
tner
scapi
tal P235,
000

Vi
nce’
scashi
nvest
ment ­ 80,
000

Tot
alnetasset
s 31
5,000

Tot
al“
goodwi
l
l”f
ort
heol
dpar
tner
s P 1
5,000
[
46]
. Let
ter“
C”i
sthecor
rectanswer
.

Mar
c’scapi
tal
bal
ance,af
terVi
nceadmi
ssi
oni
sP79,
100,comput
edasf
oll
ows:

*
Mar
c’si
nter
estpur
chased

byVi
nce(
P80,
000x1
5%) P1
2,000

Vi
nce’
scashi
nvest
ment 80,
000

Vi
ncecapi
tal
credi
t (70,
000)

Bonust
ool
dpar
tner
s P22,
000

Mar
c’scapi
tal
(bef
oreVi
nceadmi
ssi
on) P80,
000

I
nter
estpur
chasedbyVi
nce (1
2,000)

Shar
eingoodwi
l
l(P1
5,000x30%) 4,
500

Shar
einbonus(
*P22,
000x30%) 6,
600

Mar
c’scapi
tal
(af
terVi
nceadmi
ssi
on) P79,
100

[
47]
. Let
ter“
C”i
sthecor
rectanswer
.

Theadmissi
onofanew partnertoa20% i
nter
esti
napart
ner
shi
pforaninvestment
ofP18,
000,wit
ht ot
alagreedcapi
talt
obeP75,000resul
tedt
oabonustooldpartnersof
P3,
000computedasf ol
l
ows:

Newpar
tner
’si
nvest
ment P1
8,000

Less:Newpar
tner
’scapi
tal
credi
t(P75,
000x20%) 1
5,000

Bonust
ool
dpar
tner
s P 3,
000

[
48]
. Let
ter“
A”i
sthecor
rectanswer
.

Gi
ven t
he choice bet
ween goodwi
lland bonusmet
hods,Bl
ue wi
l
lpr
eferbonus
met
hodduet
oBlue’sgainofP105,
000,computedasfol
l
ows:

G-
Met
hod B-
Met
hod

Bl
ue’
scapi
tal
credi
t:
 (
P1,
080,
000¸
75%)x25% P360,
000

(
P1,
080,
000¸
P220,
000)x25% P325,
000

Less:Bl
ue’
sinvest
ment 220,
000 220,
000

Goodwi
l
l/Bonusf
orBl
ue P1
40,
000 P1
05,
000

Less:Shar
einsubsequentGW

wr
it
e-of
f(1
/3) 46,
667 -

Bl
ue’
sgai
n P 93,
333 P1
05,
000

Notet hatifthe onl

yimmediat
e eff
ectisconsi
dered,t
he “
goodwi
ll
”method would be
prefer
able;butsi
ncegoodwi
l
l,byit
sel
f,i
snon-r
eal
izabl
e,t
heover
-al
lef
fectwoul
dfavorthe
“bonus”method.

[
49]
. Let
ter“
C”i
sthecor
rectanswer
.

Theamountofgoodwil
lthatwasrecogni
zedi
nconnect
ionwi
tht
headmi
ssi
onoft
henew
par
tnerwasP30,
000,computedasfoll
ows:

Newcapi
tal
impl
i
edf
rom newpar
tner
’si
nvest
ment
:

P60,
000/331
/3% P1
80,
000

Less:Resul
ti
ngasset
saf
ternewpar
tner
’si
nvest
ment
:

Or
igi
nal
par
tner
s’i
nvest
ment P80,
000

Neti
ncome 34,
000

Dr
awi
ngs (24,
000)

Newpar
tner
’si
nvest
ment 60,
000 1
50,
000

I
mpl
i
edgoodwi
l
l(f
oror
igi
nal
par
tner
s) P 30,
000

[
50]
. Let
ter“
B”i
sthecor
rectanswer
.

Theamountoft
hepr i
vat
ecashset
tl
ementef
fect
edbet
weent
heol
dpar
tner
swas
P9,
000,comput
edasfol
lows:

Tot
al Ter
ry Ti
mmy Tommy
May31i
nvest
ment
s P80,
000 P48,
000 P32,
000 P -

Neti
ncome:

Sal
ari
es 1
4,000 7,
000 7,
000 -

Bal
anceat3:
2 20,
000 1
2,000 8,
000 -

Dr
awi
ngs (24,
000) (1
4,000) (
10,
000) -

December31bal
ances P90,
000 P53,
000 P37,
000 P -

I
nvest
ment 60,
000 - - 60,
000

I
mpl
i
edgoodwi
l
l 30,
000 1
8,000 1
2,000 -

Bal
ancesaf
ter

admi
ssi
onofnew

par
tner P1
80,
000 P71
,000P49,
000 P60,
000

Desi
redbal
ances,4:
3:2 1
80,
000 80,
000 40,
000 60,
000

Pr
ivat
eset
tl
ement P 9,
000 P(9,
000)

Ti
mmywi
l
ltr
ansf
erP9,
000ofhi
scapi
tal
toTer
ry.

[
51]
. Let
ter“
D”i
sthecor
rectanswer
.

Concept
ual
quest
ion.

[
52]
. Let
ter“
C”i
sthecor
rectanswer
.

Capi
tal
ofMi
nda P200,
000

Lossonf
urni
tur
eimpai
rment
:

Bookval
ue P65,
000

Fai
rval
ue 50,
000

Mi
nda’
sshar
e(1
/3) P1
5,000 5,
000

Adj
ust
edcapi
tal P1
95,
000

Lessf
airval
ueoff
urni
tur
e 50,
000

Val
ueofnot
eissuedt
oMi
nda P1
45,
000
[
53]
. Let
ter“
A”i
sthecor
rectanswer
.

Capi
tal
ofPabl
o P200,
000

Addshar
eonr
eval
uat
ionofi
nvent
ory:

Bookval
ue P50,
000

Fai
rval
ue 70,
000

P20,
000

x20% 4,
000

Tot
al P204,
000

Addshar
einneti
ncome:

P1
30,
000x20% 26,
000

Adj
ust
edcapi
tal P230,
000

Paymentmadet
oPabl
o 245,
000

Goodwi
l
lincl
udedi
nthepayment P1
5,000

[
54]
. Let
ter“
D”i
sthecor
rectanswer
.

Romy’
sacqui
sit
ionofthef
urni
tur
ewoul
dresul
tinRomy’
sreduct
ioni
ncapi
talofP55,
000,
comput
edasfol
lows:

Paco Qui
n Romy

Char
gef
orf
urni
tur
etaken,

atsecond-
handval
ue P P P50,
000

Shar
einr
eal
i
zat
ionl
oss,

P65,
000–P50,
000 5,
000 5,
000 5,
000

Reduct
ioni
ncapi
tal
inci
dentt
o

Romy’
sacqui
si
ti
onoft
he

Fur
nit
ure P5,
000 P5,
000 P55,
000

[
55]
. Let
ter“
C”i
sthecor
rectanswer
.

Theval
ueoft
henot
ethatMi
ndawoul
dgeti
sP1
45,
000,comput
edasf
oll
ows:
Mi
nda’
scapi
tal P200,
000

Less:Char
gesf
or:

Second-
handval
ueofassett
aken P50,
000

Shar
eofl
ossonassett
aken:

(
P65,
000–P50,
000)x1
/3 5,
000

Tot
alchar
gesagai
nstMi
nda’
scapi
tal 55,
000

Val
ueoft
henot
etobei
ssuedt
oMi
nda P1
45,
000

[
56]
. Let
ter“
C”i
sthecor
rectanswer
.

Af
terTi
c’
sret
ir
ement
,thepar
tner
shi
p’s“
netasset
s”wasP225,
000,comput
edasf
oll
ows:

Netasset
s,bef
oreTi
c’
sret
ir
ement P400,
000

I
mpl
i
edgoodwi
l
l:

(
P225,
000–P200,
000)/50% 50,
000

Adj
ust
ednetasset
s P450,
000

Less:Paymentt
oTi
c 225,
000

Netasset
s,af
terTi
c’
sret
ir
ement P225,
000

[
57]
. Let
ter“
A”i
sthecor
rectanswer
.

Thepaymentt
oPabl
oincl
udedagoodwi
l
lofP1
5,000,comput
edasf
oll
ows:

Paymentf
orPabl
o’si
nter
est P245,
000

Less:Pabl
o’si
nter
estj
usthi
swi
thdr
awal
:

Januar
y1Capi
tal P200,
000

Add:Shar
ein:

I
nvent
orywr
it
e-up:P20,
000x20% 4,
000

Neti
ncomet
o6/
30:1
30,
000x20% 26,
000

Jul
y1capi
tal
justbef
orewi
thdr
awal 230,
000

Goodwi
l
lincl
udedi
npaymentt
oPabl
o P1
5,000
[
58]
. Let
ter“
C”i
sthecor
rectanswer
.

I
fJunir
ecei
ved P45,
000,Hugo payJunit
he amountofP22,
500,comput
ed as
f
oll
ows:

(
P45,
000x½) P22,
500

[
59]
. Let
ter“
C”i
sthecor
rectanswer
.

Assumi
ngt heKathyi
spai
dP1
32,
000,Kar
enwoul
dbecr
edi
tedi
ntheamountof
P1
,200,computedasfol
l
ows:

(
P135,
000–P1
32,
000)x2/
5 P1
,200

[
60]
. Let
ter“
C”i
sthecor
rectanswer
.

IfRaei
spaidP39,
000inful
lpaymentofheri
nter
est,t
hecapi
talofAnai
mmedi
atel
y
af
terRae’swi
thdr
awal
wouldbeP23,400,comput
edasfol
lows:

Amountpai
dtoRae P39,
000

Less:Rae’
scapi
tal
bal
ance 35,
000

Bonust
oRaef
rom AnaandMae P 4,
000

Ana’
scapi
tal
bal
ancebef
oreRae’
sret
ir
ement P25,
000

Less:Shar
einbonust
oRae(
P4,
000x2/
5) 1
,600

Ana’
scapi
tal
bal
anceaf
terRae’
sret
ir
ement P23,
400

[
61]
. Let
ter“
D”i
sthecor
rectanswer
.

I
mmedi at
elyaftereffect
ingt
hetransferoft
henetasset
s,andtheissuanceofst
ock,
the corpor
ati
on’s addit
ionalpaid-
in capit
alaccountwould be cr
edit
ed f orP164,
000,
computedasf ol
lows:

Fai
rval
ueofpar
tner
shi
p’snetasset
s:

P224,
000–P40,
000 P1
84,
000

Less:Parval
ueofst
ocki
ssuedt
opar
tner
s:
 (
10,
000xP1
)x2 20,
000

Addi
ti
onal
pai
d-i
ncapi
tal
inexcessofpar P1
64,
000

[
62]
. Let
ter“
C”i
sthecor
rectanswer
.

Thepar
tnersaretorecei
veshar
esofstock,atP1
0parval
ue,equalt
o15,
000,1
5,000,and
25,
000,respect
ivel
y,comput
edasf
oll
ows:

Mac Kuh Nat

Repor
tedcapi
talbal
ances P1
00,
000 P1
00,
000
P200,
000

Shar
einasset
swr
it
e-up,P1
50,
000,equal
l
y 50,
000 50,
000 50,
000

Tot
alparval
ueofshar
est
obe

r
ecei
vedbyeachpar
tner P1
50,
000 P1
50,
000 P250,
000

Shar
est
ober
ecei
vedbyeach

part
ner
,atP1
0parval
ue/
shar
e 1
5,000 1
5,000
25,
000

[
63]
. Let
ter“
B”i
sthecor
rectanswer
.

Capi
tal
ofpar
tner
shi
pbef
oreadj
ust
mentP260,
000

Add(
deduct
)adj
ust
ment
s:

Baddebt
spr
ovi
si
on (1
0,000)

I
ncr
easei
ninvent
ory 20,
000

Depr
eci
ati
on ( 3,
000)

Adj
ust
edcapi
tal
equal
toshar
es’
parval
ue P267,
000

[
65]
. Let
ter“
B”i
sthecor
rectanswer
.

I
nthe di
str
ibut
ion oft
he P60,
000 cash,Gar
do r
ecei
ved P26,
000,comput
ed as
f
oll
ows:

Tot
al Gar
do Gor
do
I
nit
ial
cont
ri
but
ions P50,
000 P30,
000 P20,
000

Equi
v.I
nvest
ment
s(payment
s) 1
32,
970 62,
275 70,
695

Equi
v.Wi
thdr
awal
s(r
ecei
pts) (
144,
345) (
79,
100) (
65,
245)

Bal
ancesbef
orepr
ofi
tshar
e P 38,
625 P1
3,1
75 P25,
450

Pr
ofi
t(P60,
000-
P38,
625)
,6:
4 21
,375 1
2,825 8,
550

Di
str
ibut
ionofP60,
000cash P60,
000 P26,
000 P34,
000

[
66]
. Let
ter“
Cist
hecor
rectanswer
.

I
fal lt
he partners ar
e per
sonall
y sol
vent
,defici
ency/
defi
cienci
es resul
ti
ng f
rom the
l
iqui
dat
ion pr
ocess,willr
equi
re addi
ti
onalcash f
rom Dina i
nt he amountofP50,000,
computedasfoll
ows:

AA Bi
da Ci
ta Di
na

Capi
tal
bal
ances P420,
000 P21
5,000 P205,
000 P1
00,
000

Loanbal
ances - 1
60,
000 - 50,
000

Tot
ali
nter
est
s P420,
000 P375,
000 P205,
000 P1
50,
000

Less:shar
einr
eal
i
zat
ion

LossofP1
,000,
000at

3:
3:2:
2 300,
000 300,
000 200,
000 200,
000

Bal
ance(
def
ici
ency) P1
20,
000 P P75,
000 P 5,
000P(
50,
000)

[
67]
. Let
ter“
C”i
sthecor
rectanswer
.

The remaini
ng cash i
s di
str
ibut
ed as Sal
ve,P0;Gi
l
da,P31
,000;and,Nor
a,P49,
000,
respect
ivel
y,comput
edasfoll
ows:

Sal
ve Gi
l
da Nor
a

Capi
tal
bal
ances P80,
000 P1
15,
000 P1
05,
000

Real
i
zat
ionl
oss(5:
3:2)

(
P150,
000–P1
00,
000) (
25,
000) (1
5,000) (1
0,000)

Theor
eti
cal
lossonot
her
 asset
(P320,
000-
P150,
000) (
85,
000) (51
,000) (34,
000)

Bal
ancesbef
oredi
str
ibut
ion P(
30,
000) P 49,
000 P 61
,000

Sal
ve’
sdef
ici
encyat3:
2 30,
000 ( 1
8,000) ( 1
2,000)

Cashdi
str
ibut
ion P -0- P 31
,000 P 49,
000

[
68]
. Let
ter“
A”i
sthecor
rectanswer
.

Thet
otal
losst
oAi
s,P3,
000,comput
edasf
oll
ows:

Tot
albookval
ueofnon-
cashasset
sreal
i
zed:

(
P9,
000+P7,
700+P1
1,300) P28,
000

Less:Tot
alcas
hrecei
ved:

(
P6,
000+P3,
500+P1
2,500) 22,
000

Tot
alr
eal
i
zat
ionl
oss P 6,
000

Tot
all
osst
oA:

(
3/6ofP6,
000) P 3,
000

[
69]
. Let
ter“
C”i
sthecor
rectanswer
.

Tot
alcashr
ecei
vedbyBi
sP5,
000,comput
edasf
oll
ows
:

B,capi
tal P7,
000

Less:Shar
eint
otal
real
i
zat
ionl
oss:

(
2/6xP6,
000) 2,
000

Tot
alcashr
ecei
vedbyB P5,
000

[
70]
. Let
ter“
D”i
sthecor
rectanswer
.

Thecashr
ecei
vedbyCi
nJanuar
yisP0,comput
edasf
oll
ows:

C,capi
tal P3,
000

Less:Shar
ein:

Real
i
zat
ionl
ossi
nJanuar
y:

(
P9,
000–P6,
000)x1
/6 P 500
 Theor
eti
cal
losson

r
emai
ningnon-
cashasset
s:

(
P19,
000x1
/6) 3,
167

Tot
al P3,
667

Cashr
ecei
vedbyCi
nJanuar
y P–0–

[
71]
. Let
ter“
C”i
sthecor
rectanswer
.

Thetot
alamountr
ecei
vedbyalloft
hepart
ner
s,ifXr
ecei
vedP8,
000uponl
i
qui
dat
ion
oft
hepar
tner
shi
pwasP52,000,computedasf
oll
ows:

X,capi
tal P40,
000

Less:Amountr
ec’
dinl
i
qui
dat
ion 8,
000

X’
sshar
einl
i
qui
dat
ionl
oss P32,
000

Tot
alcapi
tal
oft
het
hreepar
tner
s P1
08,
000

Less:Tot
all
i
qui
dat
ionl
oss(
P32,
000¸4x7) 56,
000

Tot
alamountr
ecei
vedbyal
loft
hepar
tner
s P 52,
000

[
72]
. Let
ter“
B”i
sthecor
rectanswer
.

Assumingthef
act
sgiveninNo.17,exceptt
hatXrecei
vedP26,000asaresul
tofthe
l
i
qui
dat
ion,aspar
toft
heli
quidat
ionZr
eceivedtheamountofP14,
500,comput
edasfoll
ows:

X,capi
tal P40,
000

Less:Amountr
ec’
dinl
i
qui
dat
ion 26,
000

X’
sshar
einl
i
qui
dat
ionl
oss P1
4,000

Z,capi
tal P1
8,000

Less:Shar
einl
i
qui
dat
ionl
oss(
P14,
000¸
4x1
) 3,
500

Amountr
ecei
vedbyZi
nli
qui
dat
ion P1
4,500

[
73]
. Let
ter“
B”i
sthecor
rectanswer
.
 The r
especti
ve shar
esofSanchezand Tan inthe f
inalcash di
str
ibut
ion wi
l
lbe
P1
75,
000andP1 25,
000,respect
ivel
y,comput
edasf
oll
ows:

Tot
al Sanchez Tan

Capi
tal
bal
ances P1
,250,
000 P750,
000 P500,
000

Not
epayabl
etoTan 200,
000 - 200,
000

Tot
ali
nter
est P1
,450,
000 P750,
000 P700,
000

Real
i
zat
ionl
oss,equal
l
y:

P1
,450,
000–P300,
000 (
P1,
150,
000) (
575,
000) (
575,
000)

Shar
einf
inal
dist
ri
but
ion P 300,
000 P1
75,
000 P1
25,
000

[
74]
. Let
ter“
B”i
sthecor
rectanswer
.

I
fli
qui
dati
ontakesplaceandassetsarer
eali
zedatbookvalue,t
hepar
tner
swoul
d
r
ecei
vecashdist
ri
but
ionsequalt
othei
rrecor
dedcapit
albal
ancesi
nfi
nall
i
qui
dat
ion.

[
75]
. Let
ter“
B”i
sthecor
rectanswer
.

Johnr
ecei
vedt
otal
cashdi
str
ibut
ionofP20,
000,comput
edasf
oll
ows:

Al
ex Jay John

Capi
tal
bal
ances P95,
000 P80,
000 P70,
000

Lossonr
eal
i
zat
ionofot
her

asset
sat2:
1:
1

(
P150,
000–P70,
000) (
40,
000) (
20,
000) (
20,
000)

Theor
eti
cal
losson

r
emai
ningot
herasset
s

(
P265,
000-
P150,
000) (
57,
500) (
28,
750) (
28,
750)

Adj
ust
edcapi
tal
bal
ances P(2,
500) P31
,250 P21
,250

Def
ici
encyofAl
ex 2,
500 ( 1
,250) ( 1
,250)

Cashdi
str
ibut
ionbasi
s P -0- P30,
000 P20,
000

[
76]
. Let
ter“
D”i
sthecor
rectanswer
.
 Jo shoul
d absor
b P40,
000 oft
her
emai
ning cl
aim agai
nstt
hef
ir
m comput
ed as
f
oll
ows:

Tot
al Jo Lee Vi

Capi
tal
bal
ances P 950,
000 P350,
000 P250,
000 P350,
000

Real
i
zat
ionl
oss (
1,000,
000) (
300,
000) (
200,
000) (
500,
000)

P(50,
000) P 50,
000P 50,
000P (
150,
000)

Vi
’
sdef
ici
ency,3:
2 - (90,
000)(
60,
000) 1
50,
000

Li
abi
l
it
yforunpai
d

Cl
aim P(50,
000) P(40,
000)P(1
0,000) P–0-

[
77]
. Let
ter“
B”i
sthecor
rectanswer
.

Ift
hef i
rstcashsal
eofassetsbooked atP150,
000 r
esul
ted i
nnetreali
zat
ionof
P1
20,
000,theamounttobedi
str
ibut
edt
oIrenewouldbeP44,
000,computedasfol
lows:

I
rene’
scapi
tal P70,
000

Less:Shar
ein:

Real
i
zat
ionl
oss:

(
P150,
000–P1
20,
000)x20% P 6,
000

Possi
blel
ossonr
emai
ningot
herasset
s:

(
P250,
000–P1
50,
000)x20% 20,
000 26,
000

I
rene’
sshar
einf
ir
stcashdi
str
ibut
ion P44,
000

[
lxxvi
i
i]. Let
ter“
D”i
sthecor
rectanswer
.

ForDan t
or ecei
ve P55,
200 inful
lset
tl
ementofhi sinter
estinthe par
tnershi
p,
P193,
000mustbereali
zedfr
om thesal
eofthepar
tner
shi
p’snon-cashasset
s,computedas
fol
l
ows:

Par
tner
s’capi
tal P1
30,
000

Li
abi
l
it
ies 90,
000
Cash ( 40,
000)

Non-
cashasset
s P1
80,
000

Dan’
sdesi
redshar
einset
tl
ement P55,
200

Less:Dan’
scapi
tal
bal
ance 50,
000

Dan’
sshar
einest
imat
edr
eal
i
zat
iongai
n P 5,
200

Non-
cashasset
s P1
80,
000

Est
imat
edr
eal
i
zat
iongai
n(P5,
200¸40%) 1
3,000

Est
imat
edr
eal
i
zat
ionf
rom sal
eofnon-
cashasset P1
93,
000

[
lxxi
x]. Let
ter“
A”i
sthecor
rectanswer
.

Thedefi
cientpar
tneri
sBachandhisaddit
ionalcashcont
ri
but
iont
ofi
nal
l
yli
qui
dat
ethe
par
tner
shi
pi sP6,
000,comput
esasf
oll
ows:

Bach Li
zst St
rauss

Tot
ali
nter
est(
capi
tal
and

l
oanbal
ances) P55,
000 P1
05,
000 P200,
000

Real
i
zat
ionl
oss,at4:
4:2

P400,
000–P247,
500 (61
,000) (61
,000) (30,
500)

Bal
ance(
def
ici
ency) P(6,
000) P 44,
000 P1
69,
500

[
lxxx]
. Let
ter“
A”i
sthecor
rectanswer
.

Thebookval
ueofthepar
tner
shi
p’snon-
cashasset
sonMay31
,201
1,wasP1
80,
000,
comput
edasfol
l
ows:

Par
tner
s’capi
tal
(assumedt
obeaf
ter

consi
der
ingt
heneti
ncome) P1
30,
000

Li
abi
l
it
ies 90,
000
Tot
alasset
s P220,
000

Less:Cash 40,
000

Bookval
ueofnon-
cashasset
sonMay31
,201
1 P1
80,
000

-
endofqui
zzer
-