Partnership Quiz #3

A and B formed a partnership. The following are their contributions:

A B
Cash 500,000.00 -
Accounts Receivable 80,000.00 -
Building - 750,000.00
Accounts Payable - - 100,000.00
Total 580,000.00 650,000.00
A, Capital 580,000.00
B, Capital 650,000.00
Total 580,000.00 650,000.00

Determine the capital to be credited to:

#1. A partner is 580,000
#2. B Partner is 650,000
#3. Partnership's total assets is 1,330,000

#4. A B
Cash 500,000.00 -
Building - 800,000.00
Total 500,000.00 800,000.00

The partnerhip's net assets balance is 1,300,000

#5 A B
Cash 40,000.00 -
Building - 100,000.00
Total 40,000.00 100,000.00

Even after equalizing the interest, the partnership capital is 140,000

Use the following information for the next three assumptions:

Partners A and C shall receive annual salaries of 12,000 and 8,000
A bonus of 10% of profit after salaries but before deduction of bonus shall be given to
Partner A, the managing partner.
Each partner shall receive 10% interest on average capital investment
Any remaining profit or loss shall be shared as follows: 40% to A, 30% each to B and C

The average capital investments of partners during the year are as follows:
A 100,000.00
B 60,000.00
C 120,000.00

#6. If the partnership earn a profit of 100,000, how much will A receive in total?

A B C Total
Amount being allocated 100,000.00
Allocation:
1. Salaries 12,000.00 8,000.00 80,000.00
2. Bonus 8,000.00 72,000.00
3. Interest 10,000.00 6,000.00 12,000.00 44,000.00
3. Allocation of remaining 17,600.00 13,200.00 13,200.00 -
profit
Total 147,600.00 79,200.00 153,200.00 380,000.00

Partner A received 47,600

#7. The partnership earns profit of 10,000, how much of this amount will be distributed to C?

A B C Total
Amount being allocated 10,000.00
Allocation:
1. Salaries 12,000.00 8,000.00 - 10,000.00
2. Bonus
3. Interest 10,000.00 6,000.00 12,000.00 - 38,000.00
3. Allocation of remaining - 15,200.00 - 11,400.00 - 11,400.00 -
profit
Total 106,800.00 54,600.00 128,600.00 290,000.00

Partner C received 8,600

#8. The partnership incurs loss of ₱20,000. How much is the share of B?

A B C Total
Amount being allocated - 20,000.00
Allocation:
1. Salaries 12,000.00 - 8,000.00 - 40,000.00
2. Bonus - - - -
3. Interest 10,000.00 6,000.00 12,000.00 - 68,000.00
3. Allocation of remaining - 27,200.00 - 20,400.00 - 20,400.00 -
profit
Total 94,800.00 45,600.00 119,600.00 260,000.00

Partner B receives a loss of 14,400

Use the following information for the next two cases:

A's Average Capital

Date Amount Weighted Total
Jan-01 120,000.00 1 120,000.00
May-01 - 20,000.00 2/3 - 13,333.33
Jul-01 - - -
Aug-01 10,000.00 5/12 4,166.67
Oct-01 - 10,000.00 1/4 - 2,500.00
Total 108,333.33

B's Average Capital

Date Amount Weighted Total
Jan-01 80,000.00 1 80,000.00
May-01 - 10,000.00 2/3 - 6,666.67
Jul-01 20,000.00 1/2 10,000.00
Aug-01 5/12 -
Oct-01 - 5,000.00 1/4 - 1,250.00
Total 82,083.33

#9. Profit of 240,000 240,000.00

A B Total
Capital 108,333 82,083 190,417
Ratio P/L 0.57 0.43 1
Allocation 136,543 103,457 240,000
Total 244,876.57 103,457.76 670,417.67

The allocation for Partner A is 136,543

#10 240,000.00
A B Total
Capital 100,000 85,000 185,000
Ratio P/L -
Interest 20,000.00 17,000.00 37,000 203,000.00
Allocation 101,500 101,500 203,000
Total 221,500.00 203,500.00 637,800.00

The allocation for Partner B is 118,500

Statement of Financial Position are as follow:

Cash 30,000.00 Accounts Payable

Accounts Receivable 140,000.00 Apple, Capital 60%
Inventory 200,000.00 Banana, Capital 40%
Equipment 500,000.00
Total 870,000.00 Total

Adjusting the balance sheet:

Carrying Value Fair Value Loss
Accounts Receivable 140,000.00 120,000.00 - 20,000.00
Inventory 200,000.00 160,000.00 - 40,000.00
Equipment 500,000.00 450,000.00 - 50,000.00
Liabilities - 20,000.00 - 20,000.00
Total - 130,000.00

Distribution of Losses: - 130,000.00

Amount: A B Total
Capital 515,000.00 275,000.00 790,000.00
Ratio 0.60 0.40 1.00
Allocation - 78,000.00 - 52,000.00 - 130,000.00
Total 437,000.60 223,000.40 660,001.00

#11. The Capital of A after adjusting is 437,000

A B C
Capital Before 437,000.60 223,000.40 -
Capital Now - 111,500.20 111,500.20
Total 437,000.60 111,500.20 111,500.20

#12. The Capital Balance of Banana is 111,500

#13. The Partnership Balance would be 825,000

#14. t
buted to C?
 80,000.00
515,000.00
275,000.00

870,000.00