Partnership Dissolution

Chapter 4 Partnership Dissolution Learning
Exercises
Due No due date Points 45 Questions 36 Time Limit None
Allowed Attempts Unlimited
Instructions
Learning exercises included in textbook Chapter 4, Partnership Dissolution
45 items at 1 point each
For problem solving, final amount should be:

• without peso sign.
• with or without comma.
Take the Quiz Again
Attempt History
Attempt Time Score
LATEST Attempt 1 4 minutes 7 out of 45
Score for this attempt: 7 out of 45

Submitted Nov 12 at 12:46am
This attempt took 4 minutes.
Question 1 1 / 1 pts
It occurs every time a new partner is admitted to a partnership or an

existing partner leaves the partnership.
Formation
Correct! Dissolution
Operation
Liquidation
It is the new proportion of the partnership's book value.
Depreciated Value
Aggregate Value
Correct! Agreed Value
Fair Market Value
This is a type of dissolution where the capital balances of the old

partners will remain unchanged if the old partners sold capital interest
to a new partner.
You Answered Admission by Investment
Admission with Asset Revaluation

Admission with Bonus
Correct Answer
Admission by Purchase
This is a type of dissolution where the new partner is investing cash or

resources to be accepted as a new partner.
Admission by Purchase
You Answered Admission with Asset Revaluation
Correct Answer
Admission by Investment
Admission with Bonus
This is a structure where it ends the association of individuals for their

original purpose but does not necessarily mean the termination of the
business or an interruption in its operation.
Correct! Dissolution
Operation
Formation
Liquidation
This is the amount of capital or equity by one partner transferred to

another, with no cash consideration, for the good reputation, industry
and/or business advantage of the latter.
Reward
Asset Revaluation
Gratuity
Correct!
Bonus
This is a mode of dissolution where a partner is withdrawing from the

firm.
Retreat
You Answered Seclusion
Correct Answer Retirement
Death
This is a type of asset revaluation where a new partner’s capital

balance is more than his/her investment.
Misprized Asset
Correct Answer Undervalued Asset
You Answered Overvalued Asset
Diminished Asset
This is a type of asset revaluation where a new partner’s capital

balance is less than his/her investment.
You Answered Undervalued Asset
Exaggerated Asset
Correct Answer Overvalued Asset
Magnified Asset
This is the amount provided to a retiring partner to settle his/her capital

interest.
Correct!
Cash Settlement
Liquidation
Remuneration
Recompence
Liquidation takes place when there is an admission of a new partner.
You Answered True
Correct Answer False
Dissolution instead of Liquidation
When a new partner is admitted in a partnership by purchase of

interest, the price paid is relevant to the partnership accounting records.
You Answered True
Irrelevant instead of relevant
Dissolution takes place when a partner withdraws from the partnership.
Correct!
True
False
When a new partnership is admitted in the partnership by purchase, the

price paid is recorded in the partnership books.
True
Correct!
False
not recorded instead of recorded
When the fair market value of the assets contributed by an incoming

partner exceeds the amount to be credited to his capital account, the
difference is bonus to the new partner.
You Answered
True
bonus to old partners instead of new partner
Unanswered Question 16 0 / 1 pts
Upon the admission of a new partner, profit and loss sharing and other
consideration should be drawn because dissolution of the original
partnership cancels the old agreement.
Correct Answer True
False
Unanswered
Retirement of a partner causes dissolution of partnership.
Correct Answer True
False
Unanswered
Dissolution dissolves the old partnership but the business continues

under new partnership agreement.
Correct Answer True
False
Unanswered
Dissolution may be affected through purchase of interest of the exiting

partner by existing partner/s or another incoming partner.
Correct Answer True
False
Unanswered
During partnership dissolution, the partnership operation continues.
Correct Answer True
False
Unanswered
You Answered It is the change in the

relation of the partners
caused by any partner
being disassociated from
the business.
Correct Answer Dissolution
You Answered In admission by

investment, this is the
scenario where the total
agreed capital is greater
than the total contributed
capital.
Correct Answer Undervaluation of

asset
You Answered Withdrawal of a partner
from the partnership with
the consent of other
partners or as per the
provisions of the
partnership deed or by
giving notice of
retirement.
Correct Answer Retirement of one

partner

agreed capital is less than
the total contributed
capital.
Correct Answer Overvaluation of

assets

investment, this is being
used as a basis to
distribute a bonus to the
old partners.
Correct Answer Profit and Loss

Ratio
You Answered A new partner may be

admitted when he
purchases part or all of
the interest of one or
more of the existing
partners.
Correct Answer Admission by

Purchase of
interest
You Answered It is the total capital of the

partnership after
considering the capital
credits given to each of
the partners.
Correct Answer Total Agreed

Capital

agreed capital is equal to
the total contributed
capital.
Correct Answer Bonus
You Answered It refers to termination of

the business activities
carried on by the
partnership and the
winding up of partnership
affairs preparatory to
going out of the business.
Correct Answer Liquidation
You Answered A new partner may be

admitted by investing
directly into the business
instead of purchasing
interest from the existing
partners.
Correct Answer Admission by

Investment
Other Incorrect Match Options:

Goodwill
Total Contributed Capital
Unanswered
Which of the following results in dissolution of a partnership?
contribution of additional assets to the partnership by an existing partner
partnership borrowed cash from the managing partner
winding up of the partnership and the distribution of remaining assets to

the partners
Correct Answer withdrawal of a partner from a partnership

Unanswered
The admission of a new partner under the bonus method will result in a
bonus to
old partners only.
new partner only
Correct Answer either the new partner or the old partners, but not both.
none from the choices
Unanswered
If a bonus is traceable to the previous partners rather than an incoming

partner, it is allocated among the partners according to the
capital percentages of the new partnership.
Correct Answer profit-sharing percentages of the previous partnership.
profit-sharing percentages of the new partnership.
capital percentages of the previous partners.
Unanswered
If an existing partner withdraws from a partnership,
his or her interest may be sold to the partnership or an individual

partner.
Correct Answer all of the choices
may result bonus to remaining partners.
may result bonus to exiting partner.
Unanswered
When a new partner is admitted into a partnership and the new partner
receives a capital credit less than the assets contributed, which of the
following explains the difference?
I. The new partner received a bonus.
II. The old partners received a bonus from the new partner.
I only
Either I or II
Correct Answer II only
Neither I nor II
Unanswered
Snow and Sky are partners who share profits and losses in the ratio of
6:4. On March 1, 2023 the following data are available from the books
of the partnership.
Cash P80,000 Accounts payable
Accounts receivable 120,000 Snow, capital
Inventory 300,000 Sky, capital
Equipment, net 500,000 Snow, drawings
Sky, drawings
Total P1,000,000 Total
The net income of the partnership prior to admission of Shadow is

P50,000. Also, the partners agreed to revalue the inventory to
P320,000 and equipment to P530,000. Shadow is to be admitted for
25% interest in the partnership by direct purchase from the partners for
P250,000.
How much capital is credited to Shadow?
You Answered
Correct Answers 225,000 (with margin: 0)

Unanswered
Psalm and Trisha have capital balances of P150,000 and P180,000,

respectively. Glenda is to invest P60,000 for 15% in the partnership
interest and also in the profit and loss. There is an undistributed net
income in the amount of P80,000. Partners Psalm and Trisha share
profit and loss 65:35.
How much is the capital of Psalm after Glenda's admission?
You Answered
Unanswered
Jose, Josie, and Josel are partners sharing profits and losses of 30%,
30%, and 10%, respectively. The December 31, 2023 trial balance
included the following information:
Debits Credits
Accounts
Cash P400,000 P50,000
Payable
Inventories 500,000 Josel, Loan 40,000

Equipment 700,000 Jose, Capital 800,000
Josie,
Patent 100,000 900,000
Capital
Josel,
500,000
Capital
Net Loss
(590,000)
Total P1,700,000 Total P1,700,000
On January 1, 2024, a partner decided to retire from the partnership

and by mutual agreement among the partners, the following
adjustments shall be made:
1. Inventories amounting to P50,000 is considered obsolete and must

be written off.
2. The fair value of the equipment is P250,000.
Josel retired and received P250,000 in settlement of her total interest.
How much is the capital of Josie after the retirement of Josel?
You Answered
Unanswered
Admission by purchase with the computation of capital balances of the

old partners after admission.
Suppose Beth is to be admitted in the BFF Partnership by purchasing
one-half interest of Rey for P15,000 and one-fourth interest of Normita
and Pening for P6,000 and P9,000, respectively. Prior to admission, the
following is the statement of financial position of BFF Partnership:
BFF Partnership
Statement of Financial Position
September 30, 2023
Assets
Cash P115,000
Other Assets 125,000
Total Assets P240,000
Liabilities and Partners Equity
P140,000
Liabilities
Rey, Capital (30%) 30,000
Normita, Capital (20%) 20,000
Pening, Capital (50%) 50,000
Total Liabilities and Partners Equity P240,000

How much is the capital balance of Pening after the admission of Beth?
You Answered
Unanswered
Admission by Purchase with the computation of capital balances of the

old partners after admission.
Presented below is the condensed balance sheet of the partnership of

Charry, Aireen and Queen who share in the profits and losses in the
ratio of 6:3:1, respectively:
Cash P185,000 Liabilities P180,000
Other Charry,
415,000 252,000
assets Capital
Aireen,
126,000
Capital
Queen,
42,000
Capital
Total P600,000 Total P600,000
The partners agreed to sell 20% of their capital and profit and loss
interest to Joe for P90,000. The said payment is to be made directly to
the partners.
Immediately after Joe’s admission, what is the capital balance of

Aireen?
You Answered
Unanswered
Admission by Investment with the computation of capital balances of

the old partners after admission.
A and B are partners in AB Partnership with the following capital

balances as of October 31, prior to admission of C:
A, Capital (40%) P60,000
B, Capital (60%) 60,000
C is to be admitted into the partnership by investing additional cash of

P48,000 for a 25% interest.
How much is the capital credited to C upon his admission in the ABC
Partnership?
You Answered

Unanswered
In the previous problem pertaining to ABC Partnership, how much is the

capital of A after the admission of C?
You Answered
Unanswered
In the previous problem pertaining to ABC Partnership, how much is the

capital of B after the admission of C?
You Answered
Admission by Investment resulting to a bonus.
Jun, Thony, and Edward are partners with capital balances of P

32,000, P80,000, and P16,000 respectively. The partners share profits
and losses in the ratio of 4:3:2. Ramil is admitted in the partnership. It
was agreed that he invests cash for a 20% interest considering the
transfer of capital from him of P 30,000 upon admission.
How much is the capital of Jun after Ramil’s admission?
Note: Round off answer to nearest peso
You Answered
Retirement with the computation of capital balance after the retirement

of one partner.
The balance sheet as of September 30, 2023, for the partnership of

EEE, FFF and GGG shows the following information: Assets,
P360,000; EEE, loan, P20,000; EEE, Capital, P83,000; FFF, Capital,
P77,000; GGG, Capital, P 180,000. It was agreed among the partners
that EEE retires from the partnership, and it was also further agreed
that the assets should be adjusted to their fair value of P345,000 as of
September 30, 2023.
The partnership is to pay EEE P90,000 cash for his partnership interest,
which would include the payment of loan. EEE, FFF and GGG share
profit 40%, 15% and 45% respectively.
After EEE's retirement, how much is GGG's capital balance?
You Answered

Quiz Score: 7 out of 45
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Chapter 4 Partnership Dissolution Learning

45 items at 1 point each

For problem solving, final amount should be:

Take the Quiz Again

Score for this attempt: 7 out of 45

It occurs every time a new partner is admitted to a partnership or an

It is the new proportion of the partnership's book value.

Correct! Agreed Value

Fair Market Value

This is a type of dissolution where the capital balances of the old

You Answered Admission by Investment

Admission with Asset Revaluation

This is a type of dissolution where the new partner is investing cash or

You Answered Admission with Asset Revaluation

Admission with Bonus

This is a structure where it ends the association of individuals for their

This is the amount of capital or equity by one partner transferred to

This is a mode of dissolution where a partner is withdrawing from the

You Answered Seclusion

Correct Answer Retirement

This is a type of asset revaluation where a new partner’s capital

Correct Answer Undervalued Asset

You Answered Overvalued Asset

This is a type of asset revaluation where a new partner’s capital

You Answered Undervalued Asset

Correct Answer Overvalued Asset

This is the amount provided to a retiring partner to settle his/her capital

Liquidation takes place when there is an admission of a new partner.

You Answered True

Correct Answer False

Dissolution instead of Liquidation

When a new partner is admitted in a partnership by purchase of

You Answered True

Correct Answer False

Irrelevant instead of relevant

Dissolution takes place when a partner withdraws from the partnership.

When a new partnership is admitted in the partnership by purchase, the

When the fair market value of the assets contributed by an incoming

Correct Answer False

bonus to old partners instead of new partner

Unanswered Question 16 0 / 1 pts

Correct Answer True

Retirement of a partner causes dissolution of partnership.

Correct Answer True

Dissolution dissolves the old partnership but the business continues

Correct Answer True

Dissolution may be affected through purchase of interest of the exiting

Correct Answer True

During partnership dissolution, the partnership operation continues.

Correct Answer True

You Answered It is the change in the

Correct Answer Dissolution

You Answered In admission by

Correct Answer Undervaluation of

Correct Answer Retirement of one

You Answered In admission by

Correct Answer Overvaluation of

You Answered In admission by

Correct Answer Profit and Loss

You Answered A new partner may be

Correct Answer Admission by

You Answered It is the total capital of the

Correct Answer Total Agreed