Page|1

NAME: Date:
Pr
ofes
sor
: Sec
tion: Sc
or e:

ACCOUNTI
NG FORSPECI
ALTRANSACTI
ONS
Quiz1

1. Par
tnershipcapi
talanddr awingsac c
ountsar esi
mi l
art
othecor
por
ate
a. pai
di ncapit
al,ret
ainedearnings,anddivi de
ndsaccount
s.
b. re
tainedearningsaccount.
c. pai
di ncapit
alandr etai
nede arningsaccounts.
d. pref
erredandc ommons t
ockac counts.

2. Ifthepar tne r
shipa greementdoe snots pec
ifyhow inc
omeistobeall
ocated,pr
ofitsandloss
shouldbeal loc at
ed
a. equal l
y.
b. inpr opor t
iont otheweightedaverageofcapi
tali
nvest
eddur
ingt
heperiod.
c.e qui
tablys ot hatpart
nersarecompens at
edfortheti
meandeffortexpendedonbehal
fofthe
part
ne r
s hip.
d. inac cordanc ewi t
htheircapi
talc
ont r
ibuti
ons.

3. Mikeand Mar io agreedtoform apar tner

ship.Mi kec ontri
butede quipme ntwithc arryi
ng
amountof₱100,00 0andf a
irvalueof₱70,000,whi leMar i
oc ontri
butedc ashof₱200,000.The
par
tnersagree
dt o ha veapr ofits har
ing rat
ioof2: 1,r e
spe ct
ivel
y.Thei niti
alcr
edi t
st othe
par
tners
’capit
alac c
ountsshallre
fle ctthisfact.Undert hebonusme t
hod,how muc hi sthe
bal
anceofthecapitalacc
ountofMar i
oimme dia
tel
yaf terthepar tners
hipfor mati
on?
a. 90,
000 c.200,000
b. 135
,000 d.70,000

4. On Apr il30,20x1,AAA,BBB and CCC f orme d apar t

ne rs
hip by c ombi ning thei
rs eparate
businesspropriet
or s
hips.AAA c ontribute
dc ashof₱50, 000.BBBc ontri
bute dproper t
ywi t
ha
₱36,000c arr
ying amount ,a ₱40,00
0or i
ginalc ost
,and ₱80, 000f airvalue. Thepar t
nership
accepte
dr e
sponsibil
ityforthe₱35, 000mor t
gagea t
tachedt ot hepr opert
y.CCC c ontributed
equipmentwi tha₱30, 000carryi
ngamount ,a₱75, 000originalcost,and₱55, 000fairvalue.The
partners
hipa greements peci
fie stha tprofit sand lossesar etobes hared equallybuti ss i
lent
regardi
ngc apit
alc ontr
ibuti
ons.Whi c
hpar t nerhasthes mal l
estApr il30,20x1c apitalaccount
balance?
a. AAA c.CCC
b. BBB d.Allcapitalaccountbal anc esar
ee qual

5. OnJ anuary1,20x1,Mr.A andMs .Bagr

e edt ofor
m apart
nershi
pcont
ribut
ingthei
rre
spe
cti
ve
assetsande qui
ti
essubj
ecttoadjus
tments
.Ont hatdat
e,t
hefol
lowi
ngwereprovi
de d.
Mr .A Ms. B
Cas h 28,
000 62,000
Ac countsreceivabl
e 200,
000 600,000
Inventor i
es 120,
000 200,000
Land 600,
000
Bui l
ding 500,000
Furni t
ure &
50,
000 35,000
fixt ures
Intangibleas s
ets 2,000 3,
000
Ac countspa yable 180,
000 250,000
Otherl i
a bil
iti
es 200,
000 350,000
Capi t
al 620,
000 800,000

Thef
oll
owi
ngadj
ust
ment
swe
rea
gre
edupon:
 Page|2

a. Accountsrec
eivableof₱20,
000and₱40,
000areunc
oll
ect
ibl
einA’sandB’srespec
tivebooks
.
b. I
nventorie
sof₱6, 000and₱7,000ar
ewort
hle
ssinA’sandB’sr
espec
tivebooks
.
c.Intangibl
eassetsaretobewritte
noffinbothbooks.

How muchist
headj
ust
edc
api
talofMr
.A?
a. 952,
000 c.
750,000
b. 925,
000 d.592,
000

Uset
hef
ol
lo
winginf
orma
tio
nfort
henexttwoquest
ions:
A,BandCformedapartner
shi
p.Theircontr
ibutionsar
easf
oll
ows
:

A B C
Cash 80,
000 20,
000 200,
000
Equipme
nt 160,
000
Tot
als 80,
000 180,
000 200,
000

Addit
ionali
nfor
ma tion:
 Al thoughCha scontr
ibutedthemos tcashtothepart
ne r
ship,hedidnothavet
hefullamountof
₱200,000availableandwasf orce
dt oborrow ₱80,
000.
 Thee quipme ntc ont
ribute
dbyBhasanunpai dmor t
gageof₱40, 000,t
her
epaymentofwhichis
assume dbyt hepar t
ne r
ship.
 Thepar tnersa greedtoequalizetheirinte
rest
.Cashs et
tle
me ntsamongthepart
ner sar
etobe
madeout sidet hepartners
hip.

6. Whichofthefol
lowingstat
ement
sisc
orr
ect
?
a. ApaysC₱60, 000. c.
AandBpaysCatotalof₱60,
000
.
b. Arecei
ves₱60,000fr
om C. d.Apa
ysB₱60,
000.

7. Thesi
mplejour
nalent
riest
orecordthepar
tne
rs’c
ontr
ibuti
onsinclude
a. a₱60,
000cr
editt
oA’scapit
alacc
ount. c.acre
dittol
oanpa yabl
efor₱80,000.
b. adebi
ttomort
gagefor₱40,
000. d.a₱60,000c
r editt
oC’scapi
talaccount
.

8. Mr .SunandMs .Moonf
or medapar
tnershi
p.Thei
rcont
ribut
ionsar
easf
oll
ows
:
Mr .Sun Ms .Moon
Cash 400,
000 -
Accountsrecei
vabl
e 250,
000 -
Land 750,00
0
Equipme nt 180,00
0
Total 650,000 1,
130,
000

Addi
tio
nalinfor
ma ti
on:
 Onl y80% oft heaccountsrece
ivableisdeemedc ol
lec
tibl
e.
 Thel and iss t
ate
da tor i
ginalcost.Thef ai
rvaluei s₱1,000,
000.Thepartne
rshi
p as
sumesa
₱250,000unpai dmortgageont heland.
 Ms .Moonac quir
edt heequipme ntonal ong-t
erm financ ingbasi
s.Ms.Moonpr omi
sedt
opa y
theunpai d princ
ipalbalanceof₱80, 000usinghe rpersonalfunds.Theequi
pme nti
sunder
-
deprecia
tedby₱30, 000.

How muchistheini
ti
alpar
tne
rshi
pcapi
tal
?
a. 1,
500,000 c.
600,000
b. 900,
000 d.400,
000

Us
ethef
ol
lo
wingi
nfo
rmati
onfort
hene
xttwoque
sti
ons:
AandBformedapart
nershi
p.Thefol
lowi
ngaretheirc
ont
ribut
ions
:
 Page|3

A B
Cash 200,
000 -
Ac c
ountsr
ecei
vabl
e 150,
000 -
Invent
ory 100,
000 -
Land 500,
000
Buildi
ng 620,
000
To t
al 450,
000 1,
120,
000

Notepayabl
e 220,
000
A,capi
tal 230,
000
B,capi
tal 1,
120
,000
To
tal 450,
000 1,
120
,000

Addi
tio
nalinfo
rma t
ion:
 Theac countsr e
c ei
vablehasar ecoverableamountof₱120, 000.
 Thei nventoryhasane st
ima t
eds el
lingpr iceof₱110,000ande st
imatedcost
stosellof₱20,
000.
 Thel andhasaf airvalueof₱500, 000anunpai dmor tgageof₱120,000.Thepartnersagr
eedthat
Bshallsett
lethemor tgageus i
nghi spe r
s onalfunds.
 Thebui ldingisove r
-depr e
ciat
edby₱30, 000.
 Thebui l
dingalsohasanunpai dmor t
gageamount i
ngt o₱550,000.Thepartner
sa gre
edthatthe
part
nershipshallassumer e
paymentoft hemor t
gage.
 Thenot epa yablehasaf airval
ueof₱210, 000
.
 AandBs hallshareinpr ofit sandl osses40% and60%,r e s
pecti
vely
.

9. How muc har

etheadj
ust
edc apitalbal
anc
esofAandB,
res
pec
tive
ly?
A B
a. 200
,000 600,000
b. 230
,000 480,000
c. 200
,000 1,030,
000
d. 230
,000 600,000

10.Assumet hatapar t
ner’
sc apit
alshallbei ncre
asedac c
ordi
nglybyc ont
ribut
ingaddit
ionalcas
hto
bri
ngthepar t
ners’capitalbalancespr oporti
onatetotheirprofitorl ossrat
io.Whi c
hpar t
ner
shoul
dpr ovideadditi
onalc as
handhow muc histheaddi
tionalc
ashcontri
buti
on?
a. Part
ne rAs houldprovideaddi ti
onalc api
talof₱150,
000.
b. Part
ne rAs houldprovideaddi ti
onalc api
talof₱200,
000.
c. Part
ne rBshouldwi thdrawc apitalof₱300,000.
d. Part
ne rBshouldpr ovidecapitalof₱300,000.

11.Part
ner
sAandBs har
einpr ofit sandl os
sesona70:30r
atioafters
alaryal
lowancesof₱80,
000for
A and₱40,000forB.Thebus i
nesse arnedprofitof₱32 0,000beforededuct
ionforthesal
ari
es.
Theyear
-endc l
os i
nge nt
r i
eswoul dincl
ude
a. a₱100,000credittoA’scapit
alaccount.
b. an₱80,000de bitt
oA’ scapi
talaccount.
c. a₱220,000credittoB’scapit
alaccount.
d. a₱320,000credittotheincomes ummar yaccount
.

12.AandB’spartnershi
pagree
me ntpr
ovidesthefol
lowi
ng:
 Annuals al
ari
esof₱96,000f
orAand₱60, 000forB.
 10% bonustoA, basedonprofitafte
rsalari
esandbonus
.
 P/Lr a
tioof60:40.

Thepar
tne
rshi
pear
nedpr
ofitof₱200,
000be
foresal
ari
esandbonus
.How muc
hwasA’
sshar
e?
a
. 124,
000 c.96,
000
 Page|4

b. 112
,000 d.
76,
000

13.TheAAA a ndBBBpartner
shipa gr
eementprovi
desforAAA t
oreceivea20% bonusonprofits
bef
or ethebonus.Remaini
ngpr ofitsandlosse
saredivi
dedbet
we enAAA andBBBi nthera
tio
of2:3,res
pect
ive
ly.Whichpartnerhasagrea
teradvant
agewhenthepart
ners
hiphasaprofitor
whe nithasalos
s?
Profit Loss
a. AAA BBB
b. AAA AAA
c. BBB AAA
d. BBB BBB

14.A,BandC ar epartne
rs,shari
ngi npart
nershipprofitsintherat
ioof2:
3:4.A,themanaging
part
ner
,isent
it
ledtoanannuals al
aryof₱80,000anda10% bonusonprofitaft
erdeduct
ingthe
sal
arybutbef
orededucti
ngt hebonus.Thepar t
ners
hipe
arnedprofitof₱560,000bef
oresal
ary
andbonus.How muchistheshareofA?
a. 214
,400 c.
224,000
b. 196
,000 d.189,
667

15.Thepar
tners
hipagreementofA,BandCs ti
pul
ate
st hefol
lowing:
 A,themanagingpar t
ner,s
hal
lrec
eiveabonusof10% ofpr ofit.
 Eachpartnershal
lrecei
vea6% i
nteres
tonaveragecapitali
nves
tment
s.
 Anyr emaini
ngpr ofitorlos
sshallbeshar
ede qual
ly.

Theaveragecapi
tali
nves
tment
softhepart
ner sduringt
heyearwere₱80,
000forA,₱50,
000f
orB,
and₱30,000forC.Thepart
ner
shi
pearne
dpr ofitof₱1 00,
000dur
ingtheperi
od.How muchwasA’
s
shar
e?
a. 23,80
0 c.29,
800
b. 28,60
0 d.41,
600

16.AandB’spart
nershi
pa gr
eementsti
pulat
esthefoll
owing:
 Annualsal
aryall
owanc eof₱100
,000forA.
 BonustoAof10% oft heprofitaft
erpartner
’ssal
ari
esandbonus
.
 Thepartner
sshareinprofitsandlossesona60:40rati
o.

Thepartnershipincurr
edl
ossof₱40,
000be
for
ede
duct
ionf ors
alaries
.How muc
hist
hec
hangei
n
A’
sc api
talaccount?
a. 56,00
0dec reas
e c.
15,000decrease
b. 16,00
0i ncr
ease d.9,
000increase

17.A&BPar tner
shipearnspr
ofitof₱240,000in20x1.Themove
me ntsinthecapi
talaccount
soft
he
par
tne
rsareshownbe l
ow:
A,capi
tal B,
capit
al
Dr. Cr. Dr . Cr.
Jan.1 120,
000 80,
000
Ma y1 20,
000 10,0
00
July1 20,
000
Aug.1 10,000
Oc t
.1 10,
000 5
,000

How muchist
hes
har
eofBi
fpr
ofit
sar
etobedi
vide
dbas edona
ver
agec
api
tal
?
a. 103,
457 c.121,
500
b. 108,
333 d.136,
543
 Page|5

18.A andBs hareinpart

nershipprofit sandloss
esona40: 60rati
o.Duri
ngtheye ar
,A’sc apit
al
accounthad anetincreas
eof₱50, 000.Par
tnerA madec ontr
ibuti
onsof₱10,000and c apital
withdrawalsof₱60,
000duringtheyear.How muchwast heshareofBinthepartnershi
ppr ofit
fortheyear?
a. 100,000 c.
200,000
b. 150,000 d.180,
000

19.AandBf ormedapar tner

s hipin20x1.Thepartnershi
pc ontr
acts
tipul
ate
sthef
oll
owi
ng:
 ₱30,000annualsalar
yt oeac hpart
nerduea te
ac hyear-end.
 Bonusof10% ofpr ofitaf tersal
ari
esandbonusf orA
 8% inter
estonthepartner
s ’weightedaver
agecapitalbalanc
es.
 Anyr emainingprofitorl ossi
stobedividedequal l
y.

Thepar
tne
rshi
p’sl
edge
rshowst
hef
oll
owi
ng:
A,Ca
pit
al
Dat
e Ref
. Debi
t Cre
dit Bal
anc
e
March1,2 0
x1 00
1 30,
000.
00 30,
000.
00
J
une1 ,2
0 x1 09
8 10
,000
.00 20,
000.
00
August1,20x1 14
6 20
,000
.00 40,
000.
00
Dece
mbe r1 ,2
0x1 21
1 5,
000
.00 35,
000.
00

B,Ca
pit
al
Dat
e Ref
. Debi
t Cr
edi
t Bal
ance
March1,2 0
x1 00
1 20,
000
.00 20
,000.
00
J
une1 ,2
0 x1 09
8 10
,00
0.0
0 10
,000.
00
August1,20x1 14
6 2
,00
0.0
0 8
,000.
00

Thepartner
ship’
sprofitbef
oresal
ari
esandbonusin20x1is₱60,
000.Thepar
tne
rsagr
eedt
orec
eive
ful
lannualsal
ari
esi
n20x1.How muchist
heshareofA?
a. 30,
684 c.
32,772
b. 29,
316 d.28,
257

20.Bil
ly and Sheehan ar
epar tner
sin BassCo.Theirpartners
hip agr
eements t
a t
esthatBi
ll
yi s
enti
tl
e dtoanannuals al
aryof₱100,000and abonusof10% ofpr ofitaf tersal
arybutbe f
ore
bonus.Ther emainderissharedint
her at
ioof7:
2.Sheehan’
ss harei
npartnershi
ppr ofitforthe
yearwas₱296,000.How muc hwast
hepar t
ner
shi
ppr ofitbe for
eBil
ly’
ssalar
yandbonus ?
a. 1,580,
000 c.1,
751,
348
b. 1,672,
342 d.1,
420,0
00

21.Thepart
nershi
pa greementofAxe l
,Ber g& Cobbpr ovidesfortheyear-
end al
loc
ationofne
t
inc
omeinthefol
lowingorder:
 Fir
st,Axeli
storecei
ve10% ofnetincomeupto₱100, 000and20% over₱100,
000.
 Second,Ber
gandCobbe acharet
or ecei
ve5% oft
her emaininginc
omeover₱150,000.
 Thebalanceofincomeistobeall
oc a
tedequal
lyamongt hethr
eepart
ners.

Thepar t
ners
hip’
s2003netinc
omewas₱250,
000be
for
eanyal loc
ati
onst
opar
tne
rs.Wha
tamount
shoul
dbeal l
ocat
edtoAxel
?
a.101,
000 c.
108,000
b.103,
000 d.110,
000

22.We enc
heei stryi
ngtode cidewhe t
hertoacceptasal
aryof₱40, 000orsal
ar yof₱25,00
0plusa
bonusof10% ofne tincomeaf t
ers al
ari
esand bonusasame ansofall
oc at
ingprofitamong
partne
rs.Salar
iestr
aceabl
et otheotherpart
nersareest
imatedtobe₱10 0,000.Whatamountof
inc
omewoul dbene c
essarysothatWe e
ncheewouldconside
rc hoice
stobee qual?
 Page|6

a.
165,000 c.
265,000
b.290,
000 d.305,
000

23.GarciaandHens onformedapar t
nershi ponJ anuary2, 2005anda greedtosharepr ofit s90% and
10%,r especti
vely.Gar ci
ac ont
ributedc api t
alof₱25, 000.He nsonc ontri
butednoc apitalbuthasa
spec
ialize dexpe rt
iseand mana gest hefir mf ullt i
me .The rewer enowi thdrawal sduringthe
year
. Thepar tnershipagr eementpr ovide sforthefollowi ng:
 Capi talaccountsar etobec redi
tedannual lywithi nterestat5% ofbegi
nningc apital
.
 Hens onistobepai das al
aryof₱1, 000amont h.
 Hens onist oreceiveabonusof2 0% ofi ncomec alculate
dbe foredeductinghi ssalar
yand
interestonbot hc apit
alaccounts .
 Bonus ,i
nterest
,andHens on’ssalaryar etobec ons ideredpar t
nershipexpenses.

Thepar
tner
ship2005incomestatementasfol
lows:
Revenues 96,
450
Expenses(
inc
ludi
ngsal
ary
,inte
res
t,a
ndbonus
) 49,
700
Netincome 46,
750

Whati
sHenson’
s2005bonus
?
a.11,
688 c.
15,000
b.12,
000 d.15,
738

24.A andBf orme dapar t

ne rs
hipandbe ganoperati
onsonMar ch1,20x1.Ai nvest
ed₱400 ,
000c ash
whi l
eBi nvestede quipme ntwit
habookval ueof₱1, 200,
000andaf ai
rval ueof₱720, 000.On
Augus t31, 20x1,Ai nvestedaddi
tionalcashof₱80,000.Thepar
tners
hipa greementsti
pulate
st he
fol
lowing:
 Mont hlys al
aryal lowancesof₱8, 000and₱40, 000toA and B,respecti
vely,r
ecognizedas
e
xpe nses.
 20% bonusonpr ofitbe f
oresalarie
sandinter
estbutaft
erbonustoB.
 12% annuali nt
er es
tont hebeginningcapi
talofA.
 Bal anc ee quall
y.

Themonthlysal
ari
esarewit
hdr
awnbyt hepart
nersateachmonth-e
nd.Thepar
tne
rshi
pear
ned
profitof₱840,
000dur
ingt
heperi
odbe
forede
duc t
ionsf
orbonusandint
ere
st.

How muchist
hee
ndi
ngbal
anc
eofB’
scapi
talac
count
?
a.1,
230,
000 c.910,
000
b.1,
710,
000 d.1,
630,
000

25.Ifanew partneracqui respartne r

shipi ntere
s tdire
ctlyfrom thepart
nersrathe
rthanfrom the
par
tnershi
p,
a. noentryisrequi
r ed.
b. theexi
sti
ngpar t
ne rshipisliquidate
d.
c.t hepart
nershipas set
ss houldnotber evaluedbec aus
et hi
stypeoftr
ansact
iondoesnotres
ult
topart
nershipdissolution.
d. theexi
sti
ngpar tner s
’capitalac c
ount sarer educedandt henew partner
’scapi
talac
countis
incr
eas
ed.

Uset
hefo
llowi
ngi nf
o rmat
ionfo
rthene
xtf
ourindependentc
ases
:
Thecapi
talbal
anc esandpr ofitandlossr
atiosofthepart
nersi
nABCCo.
areasf
oll
ows
:
Capi tal P/L
A 40,000 40%
B 60, 0
00 30%
C 8
0, 000 30%
 Page|7

To
tal 180
,000

26.Dpur chasesone -halfofC’sint

erestfor₱50,000.The‘ bookvaluemethod’ist
obeused.Whi
chof
thef
ollowings tat
ement si
smos tl
ikelytobei ncor
r ec
t?
a. D’scapitalisc r
edi t
edforone-halfofC’scapitalbalance
.
b. C’scapitalbalanc eisr
educedf ortheequitytransfertoD.
c. Thec as
hpa yme ntofD toCi snotr eflec t
edi nthepar t
ners
hip’
saccounti
ngr
ecords
.
d. Thepar tnershipequi t
yisincreasedbyD’ spayme nt .

27.D purc
hases25 % ofA’s,B’
sandC’ sc apit
alinter
estsfor₱60, 000.Thepartner
susedthe‘book
val
ueme t
hod’t or ec
ordD’sadmi ss
ion.Whi c
hoft hef ol
lowings tat
eme nt
sismostl
ikel
ytobe
cor
rect
?
a. Thepart
ne rshi
p’stot
alequi t
yi ncreasesaft
errecordi
ngD’ sadmi ssi
on.
b. Theadmi ss
ionofDi saccount edf orasatransacti
onbe tweenDandt hepart
ner
ship.
c. Goodwillof₱15,000mus tber ecor ded,ac
cordingtothePFRSs .
d. Anequitytransfe
rof₱45, 000wi llbemadef r
om thes e
lli
ngpar tnerst
oD.

28.Thec arr
yingamountofthenetass
etsapproxi
mat
esfairval
ue.D i
nves
ts₱80,
000cashfora25%
int
erestinthepar
tner
ship’
sne tas
setsandprofits.Underthebonusmethod,how muchisthe
capi
talbalanc
eofAafterD’sadmis
sion?
a. 46,000 c.84,
500
b. 64,500 d.65,000

29.Thec arr
yingamountoft
hene tas
setsapproxi
mat
esfairval
ue.D i
nves
ts₱52,
000cashfora25%
int
erestinthepar
tner
shi
p’snetasset
sa ndprofits.Underthebonusmethod,how muchisthe
capi
talbalanc
eofBaft
erD’sadmissi
on?
a. 37,600 c.58,
200
b. 48,700 d.78,200

Usethefol
lo
winginf
orma
tio
nforthenextt
woques
tions:
Thes t
atementoffinanc i
alposit
ionofthepartners
hipofA andBasofDec
ember31,20x1i
sshown
bel
ow:
Cash 33,
354
Accountsrecei
vabl
e 802,
426
Inve
ntor
y 380
,137
Land 603
,000
Bui
ldi
ng 428
,267
Equi
pment 85,
134
Othe
ras
set
s 5,600
To
tala
sse
ts 2,
337,
918

Acc
ount
spa yabl
e 422
,590
Note
spayable 545
,000
A,
capi
tal 641
,976
B,c
api
tal 728
,352
To
tall
ia
bil
it
ie
sande
qui
ty 2,
337,
918

 AandBs harei
npr ofitsandlos
sesequal
ly.
 OnJanuary1,20x2,C i
nfor
medA andBofhi sint
enti
ontoinvesti
nt hepart
ners
hipf
ora20%
i
nter
est
.Thepartnersa
greedonthefol
lowi
ngadjustmentspr
iortoC’sadmiss
ion:
o Ac c
ountsrece
ivabl
eof₱55,
000shouldbewr i
tte
n-off.
 Page|8

o Inventori
esof₱12,
200areobs
olet
eandha
venor
esal
eval
ue.
o The‘ Otheras
set
s’shoul
dbewr i
tt
enoff.

30.Ifnobonusisal
lowe
d,how muc
hisC’
sre
qui
redi
nvestment?
a. 234,
167 c.
236,347
b. 324,
382 d.341,
367

31.AfterC’sadmi
ssi
on,thepart
nersagre
edtoadjus
tthei
rcapitalbalancestor
eflectthe
ir’res
pecti
ve
int
erest
sinthepartner
ship’
sne tas
sets
.Cashsett
lementist obemadebe t
weenthepar t
ners.
How muc hist
hecashsett
lement?
a. ₱43,188pa
ymentofAt oB c
.₱34,288pa yme ntofCtoAandB
b. ₱43,188pa
ymentofBt oA d.Therewoul
dbenoc as
hs ett
lementbetweent
hepar t
ners.

32.Thecapit
alacc
ountsoft
hepar t
ne r
shipofNakpil
,Ort
iz,andPe
rezonJ
une1,200
5ar
epr
ese
nte
d
bel
ow withthe
irr
espect
iveprofitandl ossr
ati
os:
Nakpil ₱ 139,200 1/2
Orti
z 208,800 1/3
Per
ez 96,
00 0 1/6
₱ 444,000

On J une1,2005 ,Quizon i
sadmi tt
edt othe partnershi
p when hepur chased,for ₱132,000,a
proportionateinterestfr
om NakpilandOr t
izint hene tasset
sandpr ofit softhepartnership.Asa
resultofat ransacti
on,Quizonacquire
daone -
fif t
hi nter
e s
tint hene tasse
tsandpr ofitsoft hefirm.
Ass umingt hatimpliedgoodwil
lisnottober ecor
ded,wha tist hecombi nedgai
nr ea
lize
dbyNakpi l
andOr t
izupont hesaleofapor
tionofthei
rintere
stinthepar tnershi
ptoQui zon?
a.0 c.62,
400
b. 43,200 d.82,000

33.Thef ol
lowingarethecapit
alac c
ountbal
ancesandpr
ofitandl
ossr
ati
osoft
hepar
tne
rsi
nAB
Part
ne r
shipasofJanuar
y1, 20x2:
Profit or l os
s
Capitalaccounts rat
ios
600,
00
A, Capi
tal 0 40%
1,000,
00
B,Capital 0 60%
1,
600,000

OnJ anuar
y1,20x2,C wasadmit
tedtot
hepartners
hipwhenheacquir
ed20% i
nter
esti
nt henet
ass
etsandprofitsofthefirmf ora₱400,
000inves
tment
.Thebonusmet
hodwasus edtorec
ordC’
s
admissi
onint
othepart
ners
hip.

Fortheye ar20x2,t
hepartner
shi
pe arne
dpr
ofitof₱4,
000,
000.Howe
ver
,itwasdi
scover
edt
hatt
he
foll
owi ngitemswe r
eovers
tat
ed:
20x1 20x2
Accruedi ncome 80,
000 100, 000
Prepaidas s
e t 140,
000 200, 000
Accruede xpense 160,000 240, 000
Une arne
di ncome 60,
000 40,000

How muc
hi stheshar
eofAi
nthe20x2pr
ofit
?
a. 1,
273,600 c.
1,592,
000
b. 1,
286,400 d.1,
208,
600
 Page|9

34.Whe nMi llret

ire
df r
om t hepar t
ners
hipofMi l
l,Yal
e,andLear,thefinals
ett
lementofMi
ll
's
int
ere
s te
x c
eededMi l
l'
scapi t
albal
ance.Underthebonusme t
hod,theex
ces
s
a. wasr ecor
dedasgoodwi l
l.
b. wasr ecor
dedasane xpe nse
.
c.r educedthecapit
albalancesofYaleandLear.
d. hadnoeffe ctonthec apit
albal
ancesofYaleandLear.

35.OnJune30,2003,
thebal
ancesheetf
orthepart
nershipofCol
l,Madur
o,andPr
iet
o,t
oget
herwi
th
t
hei
rrespec
tiveprofitandlossr
ati
os,
wer easfol
lows:

As
set
s,atc
ost 180
,000

Coll
,loan 9,
000
Coll
,capital(20%) 42,
000
Madur o,capital(20%) 39,
000
Pri
eto,capital(60%) 90,
000
Tot
al 180,
000

Collhasde ci
de dt
or e
tirefrom thepart
ner s
hip.Bymut ualagreement,t
heass
etsaretobeadj ustedto
thei
rfairvalueof₱216 ,000atJ une30,2003.Itwasagr e
edt hatthepart
nershipwoul d pa yCol l
₱61,200c as
hf orColl
’spar tne
rshipinteres
t,inc
ludi
ngCol l’sl
oanwhi chistober epa
idi nf ull.No
goodwillistoberecorded. Aft
erColl’
sr e
tir
ement,whatisthebalanceofMaduro’scapi
talaccount ?
a.36,450 c.45,
450
b.39,000 d.46,200

Usethefol
lowinginf
orma
tionf
orthene
xttwoindepe
nde
ntcas
es:
Thec apitalaccountbalanc
esoft hepar t
nersin ABC Part
ner
shi
p on J
une30,20x1 be
for
eany
necessar
yadj ust
mentsareasfoll
ows:
Capitalaccounts
A,Capital(20%) 600,
000
B,Capital(30%) 1,000,
000
C,Capital(50%) 400,
000
Tota
l 2,
000,000

Thepar
tne
rshi
pre
por
tedpr
ofitof₱3,
600,
000f
ort
hes
ixmont
hse
ndedJ
une30,
20x1.

36.C diesfrom abr okenhear tonJ ul

y1,20x1.I twasagr e
edt hatC’se st
ateshallre
ceivecashof
₱2,000,
000and e quipmentwi t
hc arryingamountof₱400, 000andf airvalueof₱1, 200,
000as
set
tlementofC’ sinteres
tint hepar t
nershi
p.Theassetswillbetransfer
redass oonast helegal
proceedingsonC’ se s
tat
ear efinal i
zed.Theent
ryi nthepar t
nership’sbooksonJ uly1,20x1to
refle cttheseparat
ionofCi ncludes
a. ade bittoC’scapit
alfor₱400,000. c.acredittoli
abil
ityfor₱3,200,
000.
b. ade bittoC’scapit
alfor₱2,200,000. d.Notr ecorde
di npar t
nershi
p’sbooks

37.C withdr awsonJ ul

y1,20x1.Itwasa greedtha
tC s hallrec
eivec ashof₱2,000,000and f
ull
y
depreci
a ted equi
pmentwithfairvalue of₱1, 200,000 ins ett
lementofhi si nter
estinthe
part
ne r
s hip.How muchi
sthecapi
talbalanceofAr i
ghtaf tert
hewi thdra
walofC?
a.1,
240,000 c.
1,580,000
b.1,
400,000 d.2,200,
000

38.Thes t
ate
mentoffinancia
lpos i
ti
onofABC Co.asofDec
ember31,20x1s
howst
hef
oll
owi
ng
i
nformati
on:
Cash 448,
000 PayabletoC 40,
000
Rec
eivabl
efrom A 32,
000 A,Capi t
al(
20%) 600,
000
 Page|10

Equi
pme
nt 1,560,000 B,
Capi
tal(
30%) 1,
000,
000
2,040,00
To
tal
s C,
Capi
tal(
50%) 400,000
0

On De c
e mber31,20x1 ,C dec i
ded toret
irefrom t hepartner
ship.Thepar tners
hip’sne tasse
ts
approxima t
et hei
rfairvaluesexceptf
ortheequipme ntwhichhasafairvalueof₱1, 800,
000.Itwas
agreedt hatthepartnershipwouldpa yC ₱560,000c ashforhi
spar t
ne r
shipinte
rest
,e xcl
udingC’s
loanwhi chi st
ober e
paidi nful
l.Wha ti
sthebalanceofB’ sc
apit
alaccountaft
ertheretir
ementofC?
a .
1,720,000 c.
632, 000
b. 1,
072,000 d.1,048,000

39.PartnerC de c
idedtor et
irewhe nthepartners
’capitalbalanc
e swe r
e :A,₱600,000;B,₱600,000;
and C,₱400, 000.Itwasagr eed t
hatPartnerC ist otakethepar tners
hip’
sf ullydepreci
a t
ed
equipmentwi t
haf ai
rvalueof₱24, 000andanot ef orthebalanceofhe rint
erest
.Thehi st
orical
costoftheequi pmentis₱36,000.Thepartnerssharei nprofit sandl os
sesequally.How muc his
thetotalpart
ne rs
hipcapit
alaft
erthereti
rementofC?
a. 1,216,00
0 c.
1,261,
000
b. 1,264,00
0 d.1,
624,000

Us ethefoll
owinginfo
rmati
onfo
rt hene
xtthr
eequesti
ons
:
On J anuar y 1,20x1,thepartnersin ABC Co.de ci
ded toadmi totheri
nves
tor
sand c
onver
tthe
par t
nershipi nt
oac orpor
ati
on. Rel
evanti
nforma t
ionfol
lows:
Carryi
ngamount s Fai
rvalues
Cas h 80,
000 80,
000
Re c
eivables 240,
000 160,
000
Inventory 320,
000 280,
000
Equipme nt 2,160,
000 2
,680,
000
Payables 200,
000 200,
000
A,Capi tal(20%) 600,
000 N/A
B,Capi t
a l(
3 0%) 800,
000 N/A
C,Ca pit
al(50%) 1,200,
000 N/A

Thecor
pora
tionhasanaut
hori
zedc
api
tal
iza
tionof₱8,
000,
000di
vide
dint
o200,
000or
dinar
yshar
es
wit
hparval
ueof₱40pershar
e.

40.Assumet hatt
headj
ust
edc api
talbal
anc
esofthepar t
ner
sareusedinde
ter
mi ningthenumberof
shar
estobei s
suedt
oe ac
hpar tner
.Whati
st hea ggrega
teparval
ueofthetotalshar
esis
suedto
thepart
ne r
s?
a.3,
000,
000 c.2,800,000
b.2,
600,
000 d.3,200,000

41.Ass ume thatpar

tner
s A,B and C a
greedt o be i
ssue
d 14,
000,21,
000 and 35,
000 s
har
es,
re
s pecti
vel
y.How muchi
sthecr
edi
ttothesharepr emi
um acc
ount?
a.50,000 c.400,
000
b.200,000 d.0

42.Assumet hatthecorpor
ationwasaut hor
izedt oissue₱400parprefer
e ncesharesand₱40par
or
dinarys har
es.Thepartnersagre
edt orec
eive1,000ordi
naryshareseach,plusevenmulti
ple
s
ofpr ef
erencesharesfor thei
rr emaini
ng interes
ts.How many or dinarys hare
s( OS)and
pref
erenceshare
s(PS)didAr ecei
ve?
a.
1,600OSand1, 000PS c.1,000OSand2,200PS
b.2,
200OSand1, 000PS d.1,000OSand1, 600PS
 Page|11

43.The par tners hi

p ofJenson,Smi th,and Hartshare pr
ofitsand l
ossesintherati
o of5:
3:2,
respecti
ve l
y. Thepart
nersvotedt odis
sol
vethepartne
rshipwhe
nitsas
set
s,li
abi
li
ti
es,
andcapi
tal
we reasfollows :
As se
ts
Cas h ₱ 40,000
Ot heras s
ets 210,000
₱250,000
Liabi
liti
esandCa pita
l
Liabili
ties ₱ 60,
000
Jenson,Capi tal 48,000
Smi th,Capi t
al 72,000
Har t,Capital 70,
000
₱250,000

Thepartner
shi
pwillbeli
qui
datedoverapr olonge dperiodoft
ime.Ascashbec
omesa vai
labl
e,itwil
l
bedist
ribut
edtothepartner
s.Jensoni si
ns olvent.Thefir s
tsal
eofnonc as
has s
etsha vi
ngabook
val
ueof₱120,000r
eali
zed₱90,000.How muc hc ashshouldbedi
stri
bute
dt oeac
hpar t
nerafterthi
s
sal
e?
a.J ens
on₱0;Smith₱28,
800;Har t₱41,200.
b. Jens
on₱0;Smith₱30,
000;Har t₱40,000.
c.J ens
on₱35,
000;Smit
h₱21, 000;Hart₱14, 000.
d. Jens
on₱45,
000;Smit
h₱27, 000;Hart₱18, 000.

44.Thes t
ate
me ntoffinanc i
alpos i
tion oft hepar
tne
rship ofA,B and C s
howst
hef
oll
owi
ng
inf
ormati
on:
40
,00
Cash Lia
bili
ti
e s 300,
000
0
720
,00
Noncashas
sets B,Loan 64,
000
0
C,Loan 20,
000
A,Capital(50%) 250,
000
B,Capit
a l(3
0%) 86,
000
C,Capital(20%) 40,
000
Tot
al 7
60,000 To t
alLi
ab .& Equi
ty 760,
000

Thenon- cas
hasset
saresoldf
or₱320,
000.Par
tne rCi stheonl
ysol
ventpar
tne
r.I
nthes
ett
leme
ntof
thepartners
’cl
aims,how muc
hdidPart
nerBr eceive?
a.50,000 c .
22, 500
b.30,000 d. None

45.On J anuary 1,20x1,t he par

tne
rsofABC Co.dec i
dedtol
iqui
dat
ethe
irpar
tne
rshi
p.The
followi nginf
ormationwasmadea vail
able:
Cas h 80,
00 0 Accountspa yabl
e 120,
000
Ac count srec
eivabl
e 2 40,
000 Pa yabletoB 80,
000
Inve ntory 480,
000 A, Capit
al(20%) 400,000
Equi pme nt 1,
200,
000 B,Capi tal(30%) 600 ,
000
Total 2,
000,
000 C, Capital(50%) 800 ,
000

Inf
ormat
ionont hec onvers
ionofnon- cashas s
etsisasf
oll
ows:
 ₱200,000wasc ollect
edonac countsr ecei
vable
;thebal
anc
eisunc
oll
ect
ibl
e.
 ₱280,000wasr eceivedfortheentireinventory
.
 Thee quipmentwass ol
df or₱1,000,000.
 ₱8,000li
quidatione xpenseswerepai d.

How muc
hdi
dCr
ece
ivef
rom t
hes
ett
leme
ntofhi
sint
eres
tint
hepar
tne
rshi
p?
 Page|12

a.
310,400 c.
545,600
b.587,
400 d.576,
000

46.Thepar t
nersoftheM &N Par tnershipstar t
edl iquida
tingt heirbus
ine
ssonJ
uly1,
200
4,a
twhic
h
timethepar t
nerswereshar ingpr ofit sandl os s
es40% t oM and60% toN.Thebal
anc
eshee
tof
thepartner
shipappearedasf ollows:
Cash 8,800 Ac countspa yabl e 32 ,40 0
Re c
e i
vabl
e 22,400 N,Loan 1 4,000
Inventory 39,400 M,Ca pital 3 1,000
Equi pment 65,200 M,Dr awi ng (5,400)
Ac c
umul ate
dde prec
iat
ion (30,800) N,Capi t
al 3 3,200
N,Dr awing (20 0)
105 ,00
Tota
lLiab.& Eq uit
y
TotalAsse
ts 1
05 ,
000 0

Duri
ngthemont
hofJ
uly
,thepar
tner
scoll
ect
ed₱600oft
herecei
vabl
eswithnolos
s.Thepar
tne
rs
al
sosol
dduri
ngt
hemont
htheent
irei
nvent
oryonwhic
htheyr
eali
zedatot
alof₱32,
400.

How muchoft
hec
ashwaspai
dtoN onJ
uly31,
2004?
a.0 c.
9,080
b. 320 d.9,
400

47.Theequi t
ysec
tionoft
hestat
eme
ntoffinanc
ialpos
iti
onoft
hepar
tne
rshi
pofA,BandCs
hows
thefollowingi
nformat
ion:
A,c api
tal(40%) 64,
000
B,capital(40%) 104,
000
C,capital(20%) 76,
800
Tot
a leq
uity 244,
800

Non-c ashas s
e t
sares oldininst
all
ment .Cashdistr
ibut
ionsaremadet ot hepartner
sascashbecomes
avai
lable.Int heseconds al
eofnon- cas
has set
s,t
hepar tner
sreceive
dthes ameamountofc ashinthe
dist
ribution.I nthet hirdsaleofnon-c ashasse
ts,theamountofc as
ha vai
lablef
ordistr
ibut
ionis
₱100,000. Thec ar
ryingamountoft heremaini
ngnon- cashasset
sis₱26 0,
000.Underthecashpri
ori
ty
program, how muc hc as
hisdi s
tri
butedt oCinthethir
di nst
allmentpayme nt
?
a. 40,
000 c.20,
000
b. 38,
400 d.0

48.OnJ anuar y1,20X2,thepar t

nersofAl l
en,Brown,andCox,whos har
eprofitsandlossesi
nthe
rat
ioof5: 3:
2,respect
ivel
y,deci
dedt oli
quidat
etheirpart
ner
shi
p.Thepart
ners
hiptr
ialbal
anceat
t
hisda tei sasfollows:
De bi
t Credi
t
Cash 18,
000
Ac c
ount srece i
vable 66,
000
Inventory 52,
000
Ma chineryande quipment,net 189,
000
Allen,loan 30,
000
Ac c
ount spa yable 5
3,000
Brown,l oan 2
0,000
Allen,capital 11
8,000
Brown,c apita l 9
0,000
Cox ,c
api t
al 7
4,000
Tot
als 355
,000 3
55,
000
 Page|13

Thepar tnerspl anapr ogram ofpi ece

me alc onve r
sionofas set
si nor de rtomi nimi zeli
quidat
ion
los
ses.Alla vail
ablecash,lessanamountr etai
ne dt oprovi deforfuturee xpenses,i
st obedis
tri
buted
tothepar t
ner sattheendofe achmont h.Thef ol
lowi ngliquidati
ont ransacti
onsoc c urredi
nJanuary
20X2.
 ₱51, 000wasc olle
ctedonac count sr
eceivable;thebalanc eisunc ol
lectibl
e.
 ₱38, 000wasr ecei
vedf ortheentireinventory.
 ₱2, 000l iqui
dationexpe nseswe r
epai d.
 ₱50, 000waspai dtoout si
dec redit
ors,afteroffs etofaP3, 000c reditme mor andum recei
vedon
January11, 20X2.
 ₱10, 000c as
hwasr e t
ainedi nthebus i
ne ssatt hee nd oft hemont hf orpot ent i
alunre
corded
li
abili
tiesandant ici
pa t
ede xpenses.

Al
lpar
tne
rsar
eins
olve
nt.

How muchdidCoxr
ece
iveont
heJ
anuar
y31,
20X2c
ashdistri
but
iont
othepar
tner
s?
a.26,
600 c.
18,400
b.24,
600 d.0

49.On J anuary 1,20x1,t he par

tne
rsofABC Co.dec i
dedt ol i
qui
dat
ethe
irpar
tne
rshi
p.The
followi nginf
ormationwasmadea vail
able:
Cas h 80,
00 0 Accountspa yabl
e 200,
000
Ac count srec
eivabl
e 2 40,
000 A, Capit
al(20%) 400,
000
Inve ntory 480,
000 B,Capi tal(30%) 600,
000
Equi pme nt 1,
200,
000 C, Capital(50%) 800,
000
2,
000,
00
Total Total
2,
000,
000 0

At hi
rdpart
yoffe redt
obuyf or₱1,
920,
000thepart
ner
shi
pas
set
sinc
ludi
ngl
iabi
li
ti
esbute
xcl
udi
ng
c
as handaft
ercertai
nass
etsar
er e
val
uedasfol
lows:
Ac c
ountsr
eceivabl
e 180,
000
Invent
ory 300,
000
Equipment 1,
280,
000

How muchdidAr
ecei
vef
rom t
hes
ett
leme
ntofhi
sint
eresti
nthepar
tne
rshi
p?
a.360,
000 c.482,
600
b.440,
400 d.440,
000

50.Theaccount
sofABPart
ners
hipaf
terit
snonc
ashas
set
swer
ere
ali
zedar
easf
oll
ows
:
Debi
t Cr
edit
Cash 34,
000
Account
spayabl
e 25,
000
Loanpayabl
etoA 9,
000
A,Capit
al 8,
000
B,Capit
al 8,
000

How muc
hcashdi
dBr
ecei
vef
rom t
hes
ett
lementoft
hepar
tner
s’i
nter
esti
nthepar
tne
rshi
p?
a.0 c.8,
000
b. 1,
000 d.9,
000

Us
eth
efo
ll
owi
ngi
nfo
rma
tio
nfo
rthene
xtt
woq
ues
ti
ons
:
 Page|14

Part
nersA,B and C de c
idedtol i
quidat
et he
irpar
tne
rshi
p.A s
ummar
y oft
he par
tne
rshi
p’s
st
atementoffinanc
ialposi
ti
onisshownbe l
ow:
Cash 50,
000
Nonc as
hasse
ts 1,200,
000
Total 1,250,
000

Accountspayabl
e 100,
000
Payabl
et oA 50,
000
A,Capital(
50%) 540,
000
B,Capit
al(30%) 360,
000
C,Capit
al(20%) 200,
000
Tot
al 1,
250,
000

51.Ifacashpr ior
ityprogr
am ispre
pare
d,whi chpar tne
rispai
dfir standhow muc
histhetot
al
paymenttot hatpar
tnerbe
foreal
lpar
tne
rswi llshareontheavai
labl
ecashbas
edonthe
irpr
ofit
andlossra
t i
os?
a. A,₱20,000 c.
B, ₱90,000
b. B,₱96,
000 d.B,₱60,000

52.Thr e
e-fourths(3/4)ofthenoncas
has se
tswe resol
df or₱920,00
0.Thepartne
rshi
ppaid₱5,000
transactioncos
tsont hesal
e.How muchc as
hdi dA recei
vefrom thes
ett
lementofthepar
tner
s’
inter
e s
tsundert hecashpri
ori
typrogr
am?
a.4 47,
500 c.
386,500
b. 4 93,500 d.306,
500

53.Part
nersBee
,Cee,DeeandGee,whos har
eprofitsintherat
ioof5:3:
1:1,r
espec
tive
ly,de
cide
dto
li
quida
tethe
irpart
ner
shi
p.Thecapi
talbal
anc
esbef
oretheli
quida
tionareasfol
lows:
Bee 60,000
Cee 40,
000
Dee 30,000
Gee 10,000

Thepartne
rsagreedont hefoll
owing:
 Par t
nershi
p’scomput erequipmentwit
habookvalueof₱12,
000i stobetakenoverbypartner
Beeatapriceof₱15,
000.
 Par t
nershi
p’sli
abil
it
ie saretobepaidoffandt hebal
anceofc ashonhandof₱30, 000istobe
divi
dedinamannert hatwil
lavoidt
henee
dforanyposs
ibl
erecoveryofcashfr
om apartne
r.

How muc hoft

he₱30,
000c
ashi
sdi
str
ibut
edt
oCe e?
a.
10,000 c.
20,000
b.0 d.15,
000

54.A,B,andC ar epartner
si nABC Partners
hipands hareprofitsandlos
sesi
ntherat
ioof5:
3:
2,
re
specti
vel
y.Thepar tnershaveagreed toliquidat
et hepartne
rshi
p.Pri
ortoli
qui
dati
on,t
he
part
nershi
pbalancesheetshowst
hefol l
owingbookval ues.
Cash 25,200
Non-cash 297,600
Notespayabl
etoC 38,400
Otherli
abil
it
ies 184,800
A,capit
al 72,000
B,capi
tal (
12,000)
C,capit
al 39,600
 Page|15

Liqui
dati
onexpensesof₱16,
800arepai
d.Non- c
ashasset
swit
habookvalueof₱240,
000ar
esol
dfor
₱216,
000.Al
lthepartne
rsareper
sonall
yins
olvent.How muc
hc as
hshoul
dCr e
ceive
?
a. 74,
571 c.39,
600
b. 46,
458 d.37,
600

55.ABCCo.isunder
goingli
quidati
on.Thef ol
lowi
ngar
etheac countbal
anc
esaf
teral
lthenon-
cas
h
asse
tswer
esol
d:
Cash 50,
000 Liabil
it
ies 120,000
A,Capit
al(30%) 90,000
B,Capi
tal(
3 0%) (60,000 )
C,Capit
al(40%) (
100,000)

Thepers
onalas
setsandliabi
lit
iesoft
hepartnersareasfol
lows
:
Per
sona
lasse
ts Pe
rso
na lli
abi
li
ti
es
A 80,
000 90,000
B 100,
000 61,000
C 192,
000 80,000

C wantstomakeanaddit
ionalcont
ribut
ionofonly₱70,000,whic
hA isr
efuti
ng.Ift
hedoctr
ineof
marshal
ingofas
set
sisf
oll
owe d,
how muc hofA’
s₱90,000equitywoul
dappeartoberec
over
able
?
a. 90,
000 c.
81,000
b. 79,
000 d.0

56.Thef oll
owingwe
ret
heac
countsofABpar tnershipont hedayt
hepar
tne
rsde
cide
dtoliquidat
e
thebusine
ss:
Cas h 18,
000 Liabili
ti
e s 42,000
Re cei
vabl
es 75,
000 Loanpa yabletoA 24,000
Inventory 90,
000 A,Ca pital(60%) 102,000
Ot herass
ets 84,
000 B,Ca pital(40%) 99,000
TotalAsse
ts 267,
000 TotalLia
b i
li
ties&Equi
ty 2
67 ,
000

I
nthefir s
tmont hoft heliquida
tionprocess
,one-t
hirdoftherec
eivabl
eswascoll
ect
ed;₱45,000of
i
nve
ntorywass ol
da tana ver
ageof70% ofc ar
ryingamount;ot
herass
etsweres
oldfor₱36,
000.How
muchdi
dAandBr ecei
veont hefir s
tcashdist
r i
but
ion?
A B
a. 8,100 27,400
b. 40,200 41,800
c. 59,100 54,400
d. 32,100 36,400

57.ABCCo. i
sunder goingli
qui
dati
on. Rel
evanti
nfor
mat
ionf
oll
ows
:
 Accountbal ances:
Recei
vablef r
om A 7,200
PayabletoB 14,
400
A,Ca pit
al(50%) 59,
400
A,Dr awings(Dr.) 12,000
B,Capi t
al(30%) 44,
400
C,Capi t
al(20%) 39,000
C,Dra wings(Cr.
) 4
,800

 Tot
alpart
ners
hipas
set
sar
e₱211,
200(i
ncl
uding₱64,
200cash)
.
 Crecei
ved₱33,
000i
nthefinals
ett
lementoft
hepartne
rs’cl
aims
.

How muchist
het
otall
ossont
hel
iqui
dat
ion?
a. 64,
200 c.
31,
200
 Page|16

b. 54,
000 d.
10,
800

58.A andBf ormedapar tnershiponJ uly1,20x1tooper at

etwostorestobemana gedbye ac
hof
them.The yi nves
ted ₱30,000 and ₱20,000 and agreed toshare earnings 60% and 40%,
res
pe c
tively.Allthei
rtrans acti
onswe reofcash,and allthei
rs ubs
e quenttransac
tionswere
handledt hroughthei
rrespec t
ivebankac c
ount
sassummar i
zedbel
ow:
A B
Cashrecei
pt s
……………………………₱79, 100 ₱65,245
Cashdisburseme nts…………………… 62, 275 70,695

OnDec ember31,20x1
,allr
emainingnon-
cas
hass
etsi
nt hetwostor
esweres
oldf orcas
hof₱60,
000.
Thepar t
ners
hipwasdi s
sol
ved,andcashset
tl
eme
ntwase ffe ct
ed.Int
hedist
ributi
onofthe₱60,
000
cas
h,Ar ecei
ved
a.
24,000 c.34,
000
b.26,
000 d.36,000

59.A,B,C,and D arepart
ner
s,shar
ing ear
ningsi nt he r
ati
o of3/21,4/21,6/21 and 8/21,
re
spec
tive
ly.
Thebal
anc
esoft
hei
rcapit
alacc
ount sonDe cember31,
20x1areasfol
lows:
A……………………………………………. ₱1, 000
B…………………………………………. . 25, 000
C……………………………………………. 25, 000
D…………………………………………… 9,000
₱ 60,00
0

Thepar tnersdec idetol

iquidat
e ,andthe
yaccordinglyconver
tthenon-c
ashasse
tsint
o₱23,200of
cash.Af t
e rpayingtheli
abili
ti
esa mounti
ngto₱3, 000,theyhave₱22,
000todivi
de.Assumethata
debitbalanceofanypar tner’
sc apit
ali
suncol
lec
tible.TheshareofC i
nthecas
hdi s
tri
buti
ontothe
partnerswas :(
round-
offans
wer)
a. 3,
200
b. 8,200
c. 13,800
d. 17,800

60.ABC Co.dec idedtoli

qui
date.Thecapi
talbal
anc
esbef
oret
hes
tar
toft
hel
iqui
dat
ionpr
oce
ss
wer
easf ol
lows :
A,Capi tal(30%) ₱350,
000
B,Capital( 20%) ₱250,
000
C, Capital(50%) ₱350,
000

I
nt hefir stmonthofthel i
quidat
ionproce
ss,al
lthepart
nershi
pass
etswer
es ol
dandus
edtopa yt
he
l
iabil
it
ies,exceptonefor₱50,000whichremainsouts
tandi
ng.A andBares
olvent
,butCi
sins
olvent
.
Ont heremai ni
ngc l
aim agai
nstthepar
tners
hip,Aistoabsor
b
a.40,000.
b.15,000.
c.30,
000.
d.25,000.

BONUSQUESTI ON:
61.Whoc r
eat
e dt
hefirstpar
tne
rshi
pbus
ine
ssi
ntheworl
d?
a. Adam andEve d.Lapu-
lapuandMa
gel
lan
b. MonkeyandTurt
le e.Noneofthe
se
c. RomeoandJul
iet
 Page|17

“It is the Lord who goes before you. He will be with you; he will not fail you or forsake you. Do not fear
or be dismayed.” –(Deuteronomy31:
8)
-END–