PRELIM EXAMINATION o P180,000

o P270,000
Alrene ard Gheck drafted a partnership agreement o P370.000
that lists the following assets contributed at the o P320,000
partnership's formation: that Alrene should What settlement must be made among the partners?
contribute cash of P100,000 and furniture and
fixtures of P75,000, whereas, Gheck should
contribute cash of P150,000, inventories of P75,000
and building worth P200,000. The building is subject
to a mortgage of P50,000, which the partnership has
assumed. The partnership agreement also specifies
that profits and losses are to be distributed evenly.
What amount should be recorded as capital for
Alrene and Gheck, respectively, at the formation of o Angie pays Chris, P30,000.
the partnership? o Airene pays Angie, P8,000.
o Chris receives from Alrene, P30,000.
o P300,000 and P300,000 o Chris receives from Angie, P38,000.
o P275.000 and P275,000 How much is the final balance in Angie’s capital
o P175,000 and P375,000 account after Arah’s admission to the firm?
o P175,000 and P425,000
Seth and Boy agree to divide initial partnership
capital equally, even though Seth contributed
P150,000 in identifiable assets and Boy contributed
P126,000. Under the bonus approach, how much
would be the capital balance of Seth at the date of
formation?

o P150,300
o P126,000 o P108,000
o P162,000 o P90,000
o P138,000 o P32,000
Seth and Boy agree to divide initial partnership o P70,000
Henry and Ziarah are partners with capital balances
capital equally, even though Seth contributed
of P120,000 and P40,000, respectively. Profits and
P150,000 in identifiable assets and Boy contributed
losses are divided in the ratio 60:40. Henry and
P126,000. Under the goodwill approach, how much
Ziarah decided to form a new partnership with Angie
would Boy's capital be?
who invested and valued at P30,000 for a 20% capital
o P150.000 interest in the new partnership. Angie's cost of the
o P138,000 land was P24, 000. The partnership elected to use the
o P126,000 bonus method to record the admission of Angie into
o P162,000 the partnership. Angie's capital account should be
credited for
What amount must be invested by Arah?
o P24,000
o P38,000
o P30,000
o P32,000
Van and Mitch established a partnership to operate a
computer shop. Van contributes a computer that cost
P60,000 and has a fair value of P90,000. Mitch
contributes P30,000 cash and furniture and fixtures
that cost P40,000 and has a fair value of P30,000. The
partners agree to share profits and losses 60% to Van o P33,000
and 40% to Mitch. If the initial non-cash o P16,500
contributions of the partners are recorded at cost o P15,317
o P33,333
rather than fair market value, which of the following
Scrappy is to invest sufficient cash to obtain a 1/3
is true?
interest in the partnership. How much is Scrappy’s
o Van's capital will be understated by P30,000. investment in the partnership?
o Total partners' capital will be understated by
P20,000.
o Mitch's capital will be overstated by P10,000.
o All of the above.
Kate and Tate formed a partnership on January 1,
2019. To start the partnership, Kate transferred cash
totaling P116,000 and office equipment with a book
value of P90,000 and a fair market value of P84,000. o P17,600
Tate transferred cash of P56,000, land valued at o P14,305
P36,000, and a building valued at P300,000. Tate o P14,155
bought these at a lump sum price of P250,000. In o P7,920
Roy, Steve, and Ted have capital balances of P15,000,
addition, the partnership assumed the mortgage of
P10,000 and P20,000, respectively. Their profit and
P232,000 on the building. The amount of capital to be
loss agreement is as follows:1. 10% interest on
credited to Kate and Tate, respectively, on January 1,
capital balances.2. Steve is entitled to a salary of
2019 should be:
P6,000.3. Ted is guaranteed a minimum share
o P200,000 and P160,000 of P8,000.4. Remainder is divided in the ratio of
o P206.300 and P160,000 30:30:40.The minimum profit to give an aggregate of
o P206,000 and P 74,000 P10,000 to Steve is
o P200,000 and P74,000
Kelly's goodwill credit would be: o P25,500
o P30,000
o P24,500
o P28,000
Assuming the partnership net income before salaries,
interest, and bonus is P50,000, (1) the profit share of
Paul, and (2) the bonus to Oscar amounted to:

o P4,050
o P5,250
o P5,000
o P4,500
o P23,600; (2) P7,500
Yves's cash investment would be: o P26,100; (2) P7,500
o P16,500; (2) P5,000
o P27,600; (2) P5,000

What is (1) Vivian's 2019 bonus, and (2) the capital

balances of Wendy and Vivian at year- end?

o P12,000; (2) Wendy, P45,600; Vivian,
P29,150
o P12,000; (2) Wendy, P68,325; Vivian,
P28,675
o P15,000; (2) Wendy, P68,325; Vivian,
P31,675
o P15,000; (2) Wendy, P42,900; Vivian,
P28,850
The capital balances of the partners on December 31,
2019 after closing the Income Summary and Drawing
accounts are:
o Bill, P112,000; Cosby, P108,000.
o Bill, P152,000; Cosby, P168,000
o Bill, P92,000; Cosby, P68,000.
o Bill, P112,000; Cosby, P48,000.
The capital balance of D at December 31, 2019 should
be:
o P65,587.50
o P95,087.50
o P75,087.50
o P201,912.50
A B and C are partners with average capital balances
during 2019 of P 472,500; P238,650 and P162,350,
respectively. The partners received 10% interest on
their average capital balances; after deducting
salaries of P122,325 to A and P82,625 to C, the
residual profit or loss is divided equally. In 2019, the
partnership had net loss of P125,624 before interest
and salaries to partner. By what amount should A and
C, capitals change, respectively?
o P29,476 increase and P17,536 increase
o P28,358 increase and P32,458 increase
o P40,844 decrease and P31,237 decrease
o P30,267 increase and P40,448 decrease
J and M have just formed a partnership. J contributed
cash of P2,205,000 and office equipment that cost
P945,000. The equipment had been used in his sole
proprietorship and had been 70% depreciated; the
appraised value of the equipment is P630,000. J also
contributed a note payable of P210,000 to be
assumed by the partnership. J is to have 60% interest
in the partnership. M contributed only P1,575,000
merchandise inventory at fair market value. Assume
the use of bonus method; the partners’ capitals must
be in conformity with their profit and loss ratio upon
formation. In the formation of a partnership, which of
the following is true?
o The capital of M will increase by P105,000 as
result of the transfer of capital.
o The agreed capital of J upon formation is
P2,625,000
o The total agreed capital of the partnership is
P4,375,00
o There is either an investment or withdrawal
of asset under the bonus method.
J and M have just formed a partnership. J contributed
cash of P2,205,000 and office equipment that cost
P945,000. The equipment had been used in his sole
proprietorship and had been 70% depreciated; the
appraised value of the equipment is P630,000. J also
contributed a note payable of P210,000 to be
assumed by the partnership. J is to have 60% interest
in the partnership. M contributed only P1,575,000
merchandise inventory at fair market value. Assume
the use of bonus method; the partners’ capitals must
be in conformity with their profit and loss ratio upon
formation. In the formation of a partnership, which of
the following is true?
 o BB has a share of 40% in the P273,375
remainder or balance
o AA is to receive a bonus of P72,000
o AA, Capital account will increase by P783,900.
o BB will receive P7,875 interest on average
capital balance
A, B and C are partners sharing profits in a 5:3:2
ratio, and with capital balances of P95,000, P80,000
and P60,000, respectively, on December 31, 2021.
The partners decided to admit D as new partner on
January 1, 2022. D will contribute cash of P80,000 to
the partnership and also pay P10,000 for 15% of B’s
share. D is to have a 20% share in profits. After the
admission of D, the total capital will be P330,000 and
D’s capital will be P70,000.After the admission of D,
B’s capital balance would be:
o P81,100
o P72,600
o P79,100
o P74,600
What is the weighted-average capital for Andrew and
Boyet in 2022?
o P126,667 and P105,333.
o P100,000 and P120,000.
o P110,667 and P119,583.
o P105,333 and P126,667.
If the average capital for Andrew and Boyet from the
above information is P112,000 and P119,000,
respectively, what will be the total amount of profit
allocated after the salary and interest distributions
are completed?
o P73,100.
o P80,000.
o P70,000.
o P75,000.
If the average capital balances for Andrew and Boyet
are P100,000 and P120,000, what will be the final
profit allocations for Andrew and Boyet in 2022?
o P50,000 and P70,000.
o P70,000 and P50,000.
o P54,000 and P66,000.
o P75,000 and P45,000
The XYZ partnership provides a 10% bonus to
Partner Y that is based upon partnership income,
after deduction of the bonus. If the partnership's
income is P121,000, how much is Partner Y's bonus
allocation?
o P12,100.
o P11,000.
o P11,650.
o P11,450.
Drawings
o are a function of interest on partnership
average capital.
o are of the same nature as withdrawals.
o are advances to a partnership.
o are loans to a partnership.
If the partnership agreement provides a formula for
the computation of a bonus to the partners, the bonus
would be computed
o next to last, because the final allocation is the
distribution of the residual profit.
o before income tax allocations are made.
o after the salary and interest allocations are
made.
o in any manner agreed to by the partners
In a limited partnership, a general partner
o is not entitled to a bonus at the end of the
year.
o is excluded from management.
o has unlimited liability for partnership debt
o has limited liability for partnership debt.
What is A’s capital credit? What is Zobel’s capital contribution?

o P 825,000
o P 975,000
o P 970,000 o P 36,000
o P 900,000 o P 30,000
Partners Seusse and Darrelle formed Chorva o P 30,000
Ventures on April 1, 2021. Seusse and Darrelle o P 24,000
contributed cash of P1,000,000 and P800,000, If Partner D received P100,280, what is Partner E’s
respectively, and agreed to share in profits 60:40 profit share?
after providing for 10% interest on their initial
capital. Chorva Ventures posted P500,000 profits as
of December 31, 2021. Partner Darrelle withdrew
P200,000 cash from the partnership in anticipation of
his profit share. Meanwhile, Partner Seusse withdrew
P300,000 of his capital.What are the capital balances
of the partners Seusse and Darrelle, respectively, on o P 89,720
December 31, 2021? o P 92,260
o P 88,250
o P 90,240
Compute Partner T’s correct profit share in 2021.

o P 994,000; P 806,000
o P 1,292,000; P 1,008,000
o P 1,294,000; P1,026,000 o P 142,000
o P 992,000; P 808,000 o P 148,000
Compute the bonus o P 143,000
o P 147,000
Compute Partner V’s correct profit share in 2022.

o Bonus to Z of P40,000
o Bonus to Z of P70,000
o Bonus to Y of P70,000 o P 106,800
o Bonus to Y of P40,000 o P 101,600
o P 103,500
o P 102,400