Partnership Review Mats Lpu No Answer

LYCEUM OF THE PHILIPPINES UNIVERSITY
ACCOUNTANCY REVIEW asa cpa

The partnership law (article 1767) embodies the definition of partnership. It states that “by the contract of
partnership, two or more persons bind themselves to contribute money, property, or industry to a common fund with
the intention of dividing the profits among themselves.”
Characteristics of a Partnership. It is an unincorporated association of two or more individuals to carry on a

business for profit. Many small businesses, including retail, service, and professional practitioners, are organized as
partnerships.
A partnership agreement may be oral or written. However, to avoid misunderstandings, the partnership agreement
should be in writing. The agreement should identify the partners; their respective business-related duties and
responsibilities; how income will be shared; the criteria for additional investments and withdrawals; and the
guidelines for adding partners, the withdrawal of a partner, and liquidation of the partnership. For income tax
purposes, the partnership files an information return only. Each partner shares in the net income or loss of the
partnership and includes this amount on his/her own tax return.
Limited life. The life of a partnership may be established as a certain number of years by the agreement. If no
such agreement is made, the death, inability to carry out specific responsibilities, bankruptcy, or the desire of a
partner to withdraw automatically terminates the partnership. Every time a partner withdraws or is added, a new
partnership agreement is required if the business will continue to operate as a partnership. With proper provisions,
the partnership's business may continue and the termination or withdrawal of the partnership will be a
documentation issue that does not impact ongoing operations of the partnership.
Mutual agency. In a partnership, the partners are agents for the partnership. As such, one partner may legally
bind the partnership to a contract or agreement that appears to be in line with the partnership's operations. As most
partnerships create unlimited liability for its partners, it is important to know something about potential partners
before beginning a partnership. Although partners may limit a partner's ability to enter into contracts on the
company's behalf, this limit only applies if the third party entering into the contract is aware of the limitation. It is the
partners' responsibility to notify third parties that a particular partner is limited in his or her ability to enter into
contracts.
Unlimited liability. Partners may be called on to use their personal assets to satisfy partnership debts when the
partnership cannot meet its obligations. If one partner does not have sufficient assets to meet his/her share of the
partnership's debt, the other partners can be held individually liable by the creditor requiring payment. A partnership
in which all partners are individually liable is called a general partnership. A limited partnership has two classes
of partners and is often used when investors will not be actively involved in the business and do not want to risk
their personal assets. A limited partnership must include at least one general partner who maintains unlimited
liability. The liability of other partners is limited to the amount of their investments. Therefore, they are called limited
partners. A limited partnership usually has LLP in its name.
Ease of formation. Other than registration of the business, a partnership has few requirements to be formed.
Transfer of ownership. Although it is relatively easy to dissolve a partnership, the transfer of ownership, whether
to a new or existing partner, requires approval of the remaining partners.
Management structure and operations. In most partnerships, the partners are involved in operating the
business. Their regular involvement makes critical decisions easier as formal meetings are not required to get
approval before action can be taken. If the partners agree on a change in strategy or structure, or approve a
purchase of needed equipment, no additional approvals are needed.
Relative lack of regulation. Most governmental regulations and reporting requirements are written for
corporations. Although the number of sole proprietors and partnerships exceeds the number of corporations, the
level of sales and profits generated by corporations are much greater.
Number of partners. The informality of decision making in a partnership tends to work well with a small number of
partners. Having a large number of partners, particularly if all are involved in operating the business, can make
decisions much more difficult.
Partnership Accounting. Except for the number of partners' equity accounts, accounting for a partnership is the
same as accounting for a sole proprietor. Each partner has a separate capital account for investments and his/her
share of net income or loss, and a separate withdrawal account. A withdrawal account is used to track the amount
taken from the business for personal use. The net income or loss is added to the capital accounts in the closing
process. The withdrawal account is also closed to the capital account in the closing process.
Asset contributions to partnerships
When a partnership is formed or a partner is added and contributes assets other than cash, the partnership
establishes the net realizable or fair market value for the assets. For example, if the Walking Partners company
adds a partner who contributes accounts receivable and equipment from an existing business, the partnership
evaluates the collectibility of the accounts receivable and records them at their net realizable value. An existing
valuation reserve account (usually called allowance for doubtful accounts) would not be transferred to the
partnership as the partnership would establish its own reserve account. Similarly, any existing accumulated
depreciation accounts are not assumed by the partnership. The partnership establishes and records the equipment
at its current fair market value and then begins depreciating the equipment over its useful life to the partnership.
The transactions that are usually debited and credited to partner’s capital and drawing accounts are as follows:
Debit Credit
1. For Capital Account 1. For Capital Account
a. Permanent withdrawal of capital a. Original investment
b. Debit balance of the drawing account b. Additional investment
at the end of the period. c. Partner’s share in the profits
c. Partner’s share in the losses 2. For Drawing Account
2. For Drawing Account a. Partnership obligations assumed or paid by
a. Withdrawal of assets by the partner in the partner
the anticipation of income b. Personal funds or claims of partner
b. Partner’s personal indebtedness paid collected and retained by the partnership
or assumed by the partnership. c. Periodic partner’s salaries depending on the
c. Funds or claims of partnership accounting and disbursement procedures
collected and retained by the partner. agreed upon.
Accounting entries to record the formation will depend upon how partnership is formed. A partnership may be
formed in several ways:
1. Formation of partnership for the 1st time
2. Conversion of a sole proprietorship to a partnership
a. A sole proprietor allows another individual, who has no business of his own to join his business
b. Two or more sole proprietors form a partnership
3. Admission of a new partner
Transactions Entries
Debits Credits
Initial Cash investment Cash @ face value Partner’s capital @ face value
Property contribution Property @ fair value Partner’s capital @ fair value
Note: if the property contributed by the partner is used for mortgage, and the partnership assumed the liability of
the partner, such obligations should be deducted in the partner’s capital account.
Recognition of Bonus on Initial Investments.

There is bonus if the capital interest of a partner exceeds his contributed capital, assets of the partnership will not
increase, and however, the capital account of the other partner will decrease in proportion to bonus allocated to the
capital account of the partner who received the bonus.
Illustration ASA decided to form a partnership JKA. The former contributed cash amounting to Php150,000 and
JKA contributed property with a fair market value of Php200,000, cost of Php300,000 and with accumulated
depreciation of Php150,000. However, the partners agreed that each of them have equal interest in the partnership
capital. How would these contributions reflect in the books of the partnership?
Accounts Effects
ASA Capital JKA capital
Sole proprietor and another individual form a Partnership. Both the assets and liabilities of the sole proprietor
are transferred to the newly formed partnership and the assets are revalued before they are transferred to the
partnership. Adjustments are made to the capital of the proprietor in proportion any adjustments made to both
assets and liabilities as a result of revaluation.
Problem 1
On June 18, 2018, J and K formed a partnership and agreed to share profits and losses in the ratio of 3:7,
respectively. J contributed a computer that cost him Php500,000. K contributed Php2 million cash. The computer
was sold for Php550,000 on June 18, 2018 immediately after the formation of the partnership.
Required: prepare journal entries (what amount should be recorded in J’s capital account on formation of the
partnership?)
Problem 2
J, K, and A form a partnership on June 18, 2018. They agree that J will contribute office equipment with a total fair
value of Php 400,000; K will contribute delivery equipment with a fair value of Php800,000; and A will contribute
cash. If partner A wants a 1/3 interest in the capital and profits, how much cash that he must contribute?
Problem 3
Luke and Caleb formed a partnership on June 18, 2018 and contributed the following assets:
Accounts Luke Caleb
1. Cash Php 3,000,000 Php 1,000,000
2. Land 3,000,000
The land was subject to a mortgage of Php500,000, which was assumed by the partnership. Under the partnership
contract, Luke and Caleb will share profit and loss in the ratio of 1/3 and 2/3 respectively. Prepare journal entries to
record the transaction on June 18, 2018.
Problem 4
Ruth and Anna form a new partnership. Ruth invests P3million in cash for her 60% interest in the capital and
profits of the business. Anna contributes land that has an original cost of Php 400,000 and a market of
Php700,000; and a building that has a tax basis of Php500,000 and a market value of Php900,000. The building is
subject to a Php400,000 mortgage that the partnership will assume. What amount of cash should Anna contribute?
Problem 5
Toni and Amor formed a partnership and agreed to divide initial capital equally, even though Toni contributed
Php1,000,000 and Amor contributed Php840,000 in identifiable assets. Under the bonus method, to adjust the
capital accounts, prepare the journal entries.
Problem 6
Love and Joy drafted a partnership agreement that lists the following assets contributed at the partnership
formation:
Accounts Contributed by
Love Joy
Cash Php 2,000,000 Php3,000,000
Inventory - 1,500,000
Building - 4,000,000
Equipment 1,500,000 -
The building is subject to a mortgage of Php1,000,000, which the partnership has assumed. The partnership
agreement also specifies the profits and losses are to be distributed evenly. What amount should be recorded as
capital for Love and Joy at the formation of the partnership?
Problem 7
On June 18, 2018, AKO, IKAW, and SIYA formed a partnership by combining their separate business
proprietorships. AKO contributed cash of Php50,000. IKAW contributed property with a Php36,000 book value, a
Php40,000 original cost, and Php80,000 fair value. Partnership accepted responsibility for the Php35,000
mortgage attached to the property. SIYA contributed equipment with Php30,000 book value, a Php75,000 original
cost and Php55,000 fair value. The partnership agreement specifies that profits and losses are to be shared
equally but is silent regarding capital contributions. Which partner(s) has the largest capital balance on June 18,
2018?
Problem 8
Kay and Dali entered into a partnership on June 18, 2018 by investing the following assets:
Accounts Kay Dali
Cash Php 30,000 Php –
Merchandise inventory - 90,000
Computer equipment - 160,000
Furniture and fixtures 200,000
The agreement between Kay and Dali provides that profits and losses are to be divided into 40% to Kay and 60%
to Dali, and that the partnership is to assume a liability on the computer equipment of Php60,000. The partners
further agree that Dali is to receive a capital credit equal to her profit and loss ratio. How much cash is to be
invested by Dali?
Problem 9
Kury and Pot are combining their separate businesses to form a partnership. Cash and noncash assets are to be
contributed to a total capital of Php300,000. The noncash assets to be contributed and the liabilities to be assumed
are:
Accounts Kury Pot
Book value Fair value Book value Fair value
Accounts Php 20,000 Php 20,000 Php - Php –
receivable 30,000 40,000 20,000 25,000
Inventories 60,000 45,000 40,000 50,000
Equipment 15,000 15,000 10,000 10,000
Accounts payable
The partners’ capital accounts should be equal after all the contributions of assets and the assumption of liabilities.
How much cash is to be contributed by Kury?
Problem 10
On June 18, 2018, Tried admits Me for an interest in his business. On this date, Tried’s capital account shows a
balance of Php158,400. The following were agreed upon before the formation of the partnership:
1. prepaid expenses of Php 17,500 and accrued expenses of Php5,000 are to be recognized.
2. 5% of the outstanding accounts receivable of Tried amounting to Php100,000 is to be recognized as
uncollectibles.
3. Partner Me is be credited with a 1/3 interest in the partnership and is to invest cash aside from the Php50,000
worth of merchandise.
Required: compute the amount of cash to be invested by partner Me and the total capital of the partnership and
prepare journal entries in the books of the partnership and in the books of Tried to close the accounts.
PROBLEM 11
As of June 21, 2018, Amor and Toni decided to form a partnership. Their balance sheets on this date are:
Accounts Amor Toni
Cash Php 15,000 Php 37,500
Accounts receivable 540,000 225,000
Merchandise inventory - 202,500
Machinery and equipment 150,000 270,000
___________ ___________
Total Php 705,000 Php 735,000
Accounts payable Php 135,000 Php 240,000

Amor, capital 570,000
Toni, capital 495,000
___________ ___________
Total Php 705,000 Php 735,000
The partners agreed that the machinery and equipment of Amor is understated by Php15,000 and that of Toni by
Php45,000. Allowance for doubtful accounts is to be set up amounting to Php120,000 for Amor and Php45,000 for
Toni. The partnership agreement provides for a profit and loss ratio and capital interest of 60% to Amor and 40% to
Toni. How much cash must Amor invest to bring the partner’s capital balances proportionate to their profit and loss
ratio? Prepare journal entries to record the investment of partners to the partnership.
Problem 12
Esau and Jacob are partners sharing profits in this proportion – 60:40. A balance sheet prepared for the partners
on June 21, 2018:
Assets Liabilities & Capital
Cash Php 480,000 Accounts payable Php 890,000
Accounts receivable 920,000 Esau, capital 1,330,000
Inventories 1,650,000 Jacob, capital 1,080,000
Equipment 700,000
Accumulated depreciation (450,000)
____________ ____________
Total assets Php 3,300,000 Total liabilities & capital Php 3,300,000
On this date, the partners agree to admit Isaac as a partner. The terms of the agreement are summarized below.
Assets and liabilities are to be restated as follows:
1. An allowance for possible uncollectibles of Php45,000 is to be established.
2. Inventories are to be restated at their present replacement value of Php1,700,000.
3. Accrued expenses of Php40,000 are to be recognized.
Esau, Jacob and Isaac will divide profits in the ratio of 5:3:2. Capital balances of the partners after the formation of
the new partnership are to be in the aforementioned ratio, with Esau and Jacob making cash settlement between
themselves outside of the partnership to adjust their capitals and Isaac investing cash in the partnership for his
interest. How much cash is to be invested by Isaac?
Problem 13
On June 21, 2018, Alvin and Bino form a partnership. Alvin invests certain business assets at values which are yet
to be agreed upon. He is to transfer his business liabilities and is to contribute sufficient cash to bring his total
capital to Php1,800,000, which is 60% of the total capital as had been agreed upon.
Details regarding the book value of Alvin’s business assets and liabilities and their corresponding valuation follow:
Book values Agreed valuations
Accounts receivable Php 540,000 Php 540,000
Allowance for bad debts 36,000 60,000
Merchandise inventories 966,000 1,050,000
Store equipment 270,000 -
Accumulated depreciation-SE 180,000 132,000
Office equipment 180,000 -
Accumulated depreciation-OE 96,000 48,000
Accounts payable 480,000 480,000
Bino agrees to invest cash Php300,000 and merchandise valued at current market price. Compute The value of
the merchandise to be invested by Bino and the amount of cash by Alvin.
Problem 14
On June 21, 2018, Jhen and Kat pooled their assets to form a partnership, with the firm to take over their business
assets and assume the liabilities. Partners’ capitals are to be based on net assets transferred after the following
adjustments: Kat inventory is to be increased by Php30,000; allowance for doubtful accounts of Php10,000 and
Php15,000 are to be set up in books of Jhen and Kat respectively; and accounts payable of Php40,000 is to
recognized on Jhen’s books. The individual trial balances on June 21, 2018, before adjustments follow:
Jhen Kat
Assets Php 750,000 Php 1,130,000
Liabilities 50,000 345,000
Capital 700,000 785,000
How much is the capital of Jhen and Kat after the above adjustments to their books?
Problem 15
Reuben admits Judah for a partnership interest in his business. The balance sheet accounts of Reuben of June
21, 2018 prior to the admission of Judah are as follows:
Cash Php ? Accounts payable Php496,000
Accounts receivable 960,000 Reuben, capital ?
Merchandise inventory 1,440,000
It is agreed that for purposes of establishing Reuben’s interest, the following adjustments should be made: (1) an
allowance for bad debts of 2% of accounts receivable is to be established; (2) the merchandise inventory is to be
valued at Php1,600,000; and (3) prepaid expenses of Php52,000 and accrued expenses of Php 32,000 are to be
recognized. Judah invested cash of Php1,136,400 to give him a 1/3 interest in the total capital of the firm. What is
the capital balance of Reuben and after the admission of Judah?
Income Allocations
The partnership agreement should include how the net income or loss will be allocated to the partners. If the
agreement is silent, the net income or loss is allocated equally to all partners. As partners an owner of the
business, they do not receive a salary but each has the right to withdraw assets up to the level of his/her capital
account balance. Some partnership agreements refer to salaries or salary allowances for partners and interest on
investments. These are not expenses of the business, they are part of the formula for splitting net income. Many
partners use the components of the formula for splitting net income or loss to determine how much they will
withdraw in cash from the business during the year, in anticipation of their share of net income. If the partnership
uses the accrual basis of accounting, the partners pay federal income taxes on their share of net income,
regardless of how much cash they actually withdraw from the partnership during the year.
Once net income is allocated to the partners, it is transferred to the individual partners' capital accounts through
closing entries. For example, assume AVELACRUZ's Consultants, Inc., a partnership, earned Php 60,000 and their
agreement is that all profits are shared equally. Each of the three partners would be allocated Php 20,000 (Php
60,000 ÷ 3). The journal entry to record this allocation of net income would be:
General Journal
Date Account Title and Description Ref. Debit Credit
20X0
Dec.31 Income Summary 60,000
Avila, Capital 20,000
Abel, Capital 20,000
Dela Cruz, Capital 20,000
Transfer net income to partners' capital accounts
Remember that allocating net income does not mean the partners receive cash. Cash is paid to a partner only
when it is withdrawn from the partnership.
In addition to sharing equally, net income may also be split according to agreed upon percentages (for example,
50%, 40%, and 10%), ratios (2:3:1), or fractions ( 1/3, 1/3, and1/3). Using AVELACRUZ's Consultants net income of
Php 60,000 and a partnership agreement that says net income is shared 50%, 40%, and 10% by its partners, the
portion of net income allocated to each partner is simply the Php 60,000 multiplied by the individual partner's
ownership percentage. Using this information, the split of net income would be:
Avila 50% Php30,000
Abel 40% 24,000
Dela Cruz 10% 6,000
Total net income Php 60,000
Using the 2:3:1 ratio, first add the numbers together to find the total shares (six in this case) and then multiply the
net income by a fraction of the individual partner's share to the total parts (2/6,3/6, and 1/6). Using the three ratios, the
Php 60,000 of AVELACRUZ's Consultants net income would be split as follows:
Avila 2/ 20,000
6
Abel 3/ 30,000
6
Dela Cruz 1/ 10,000

6
Total net income Php 60,000
1/ 1/ 1/
Using the fractions of 3, 3, and 3, the net income would be split equally to all three partners, and each partner's
capital account balance would increase by Php 20,000.
Assume the partnership agreement for AVELACRUZ's Consultants requires net income to be allocated based on
three criteria, including: salary allowances of Php 15,000, Php 12,000, and Php 5,000 for Avila, Abel, and Dela
Cruz, respectively; 10% interest on each partner's beginning capital balance; and any remainder to be split equally.
Using this information, the Php 60,000 of net income would be allocated Php 21,000 to Avila, Php 20,000 to Abel,
and Php 19,000 to Dela Cruz.
Information from the owners' capital accounts shows the following activity:
Beginning Additional
Capital Investments Withdrawals
Balance During Year During Year
Avila Php 20,000 Php 5,000 Php 15,000
Abel 40,000 5,000 10,000
Dela Cruz 100,000 10,000 5,000
Allocation of Net Income of $60,000
Avila Abel Dela Cruz Total

Salary Allowances Php 15,000 Php 12,000 Php 5,000 Php 32,000
Interest (10% of beginning capital account balance) 2,000 4,000 10,000 16,000
17,000 16,000 15,000 48,000
Remainder (equally) 4,000 4,000 4,000 12,000
Net Income Php 21,000 Php 20,000 Php 19,000 Php 60,000
The investments and withdrawal activity did not impact the calculation of net income because they are not part of
the agreed method to allocate net income. As can be seen, once the salary and interest portions are determined,
they are added together to determine the amount of the remainder to be allocated. The remainder may be a
positive or negative amount.
Assume the same facts as above except change net income to Php 39,000. After allocating the salary allowances
of Php 32,000 and interest of Php 16,000, too much net income has been allocated. The difference between the
Php 48,000 allocated and the Php 39,000 net income, a decrease of Php 9,000, is the remainder to be allocated
equally to each partner. These assumptions would result in allocations of net income to Avila of Php 14,000, Abel of
Php 13,000, and Dela Cruz of Php 12,000. The calculations are as shown:
Allocation of Net Income of Php 39,000
Avila Abel Dela Cruz Total
Salary allowances Php 15,000 Php 12,000 Php 5,000 Php 32,000
Interest (10% of beginning capital account balance) 2,000 4,000 10,000 16,000
17,000 16,000 15,000 48,000
Remainder (equally) (3,000) (3,000) (3,000) (9,000)
Net Income Php 14,000 Php 13,000 Php 12,000 Php 39,000
Problem 1
The partnership contract for the ASA and ACA Partnership provided that ASA is to receive an annual salary of
Php1,200,000, ACA is to receive an annual salary of Php800,000, and the remaining profit or loss is to be divided
equally between the partners. Net income of the ASA and ACA Partnership for the year ended December 31,2010
was Php1,800,000. The closing entry for net income on December 31,2010 is a debit to income summary for
Php1,800,000 and credits to ASA, capital Php __________ and ACA, capital respectively Php______
Problem 2
The partnership contract of Rose, Green and Janet Partnership provided for the following division of net income or
losses in the following manner:
1. Bonus of 20% of income before the bonus is given to Rose.
2. Interests are given at 15% on average capital account balances to each partner.
3. Remaining income or loss, are equally distributed to each partner.
The net income of the partnership for 2010 was Php900,000 and the average capital account balances for that year
were: Rose, Php100,000; Green, Php2,000,000; and Janet, Php3,000,000. How much of the P900,000 should be
distributed to Rose, Green, and Janet?
Problem 3
The partnership agreement of Ancient and Alpha provided for salary allowances of Php450,000 to Ancient and
Php350,000 to Alpha, and residual profit was allocated equally. During the year, the partners each withdraw cash
equal t0 80% of their salary allowances. If during the 2010, the partnership had profits in excess of Php1,000,000
without regard to salary allowances and withdrawals, Ancient’s capital in the partnership would:
a) Increase more than Alpha’s. c) Decrease more than Alpha’s
b) Increase the same as Alpha’s d) Decrease the same as Alpha’s
Problem 4
Jhen and Kat are partners. Their capital accounts during 2010 were as follows:
Jhen Kat
8/28 Php60,000 1/1 Php400,000 3/5 Php90,000 1/1 Php600,000
4/3 80,000 7/6 70,000
10/31 180,000 10/7 120,000
Net income of the partnership is Php395,000 for the year 2010. The partnership agreement provides for division of
income as follows: (1) each partner is to be credited 10% interest on his simple average capital, and (2) any
remaining income or loss is to be divided equally.
What is the amount of profit to be distributed to Jhen and Kat?
Problem 5
The partnership agreement of Ruth and Anna provides that interest at 10% is to be credited to each partner on the
basis of average capital balances. A summary of Anna Capital account for the year ended December 31,2010
follows:
Balance, 1/1 Php1,400,000
Additional investment, 7/1 400,000
Withdrawal, 8/1 150,000
What is the amount of interest should be credited to Anna capital account for 2010?
Problem 6
Jew and Gentile formed a partnership on January 1, 2010 with Jew contributing Php160,000 cash and Gentile
contributing equipment with a book value of Php64,000 and a fair value of Php48,000 and inventory items with a
book value of Php24,000 and fair value of Php32,000. During 2010, Jew made additional investment of Php16,000
on April 1 and Php16,000 0n June 1, and on September 1, he withdrew Php40,000. Gentile had neither additional
investment nor withdrawal during the year. What is the average capital balance the end of 2010 for Jew?
Problem 7
The partners of Arlyn and Alvin partnership, share profits 3:2. However, Arlyn is to receive a yearly bonus of 20%
for the net profits after deducting said bonus, in addition to his profit share. The partnership made net income for
the year of Php24,000 before the bonus. How much profit share will Arlyn receive?
Problem 8
Easy and Fun have capital account balances at the beginning of the year of Php400,000 and Php450,000
respectively. They share net income and losses as follows:
a) 8% interest on beginning capital balances
b) Salary allowances of Php150,000 to Easy and Php75,000 to Fun
c) Remainder in 3:2
The partnership reported net income of Php100,000 for the year, before interest and salary allowances to partners.
What are the profit shares of Easy and Fun, respectively?
Problem 9
Grace and Kind share profits and losses in a ratio of 4:6. Grace and Kind receive salary allowances of P10,000
and P20,000, respectively, and both partners receive 10% on the balance in their capital accounts on January 1.
Partners’ drawings are not used in determining the average capital balances. Total net income for 2005 is
P60,000. If net income after deducting the salary allocations is greater than P20,000. Kind receives a bonus of 5%
of the original amount of net income.
Grace Kind
January 1 Capital Balances 200,000 300,000
Yearly drawings (1,500 a month) 18,000 18,000
Permanent withdrawals of capital
June 1 (15,000)
May 1 (20,000)
Additional investment of capital
July 1 25,000
October 1 30,000
How much in total allocations have been made for interest, salary, and bonus allocations, and how much in over-
allocations have been made?
Problem 10
L, M, and N are partners sharing profits 40%, 35% and 25%. Partners original capitals were in this ratio but on June
30, 2018, capital balances are as follows: L – 780,000; M – 650,000 and N – 650,000. Partners want to bring their
capital balances into the profit and loss ratio. Assuming that the capital balances are to be brought into the profit
and loss ratio by payments outside of the firm among the partners, the total firm’s capital to remain the same, what
cash transfers are required between the partners?
a. L should pay N 130,000 and M 78,000 b. M should pay N 78,000 and L 52,000
c. N will receive from L 52,000 and M 78,000 d. N will pay L 52,000 and M 78,000
Problem 11
Ask, You, and Receive are partners with average capital balance during 2018 of Php120,000, Php60,000; and
Php40,000, respectively. Partners receive 10% interest on their capital balances. After deducting salaries of
Php30,000 to Ask and Php20,000 to Receive, the residual profit and loss is divided equally. In 2019, the
Partnership sustained a loss before interest and salaries to partners. By what amount should Ask’s capital account
change?
Problem 12
The partnership agreement of Arlyn, Alvin and Able provides for the year-end allocation of net income in the
following order:
• First, Arlyn is to receive 10% of net income up to Php100,000 and 20% over Php100,000.
• Second, Alvin & Able each are to receive 5% of the remaining income over Php150,000.
• The balance of income is to be allocated equally among the three partners.
The partnership’s 2018 net income was Php250,000 before any allocations to partners. What amount should be
allocated to Arlyn?
Problem 13
The partnership agreement of Yan² and Kat² provides for Yan² to receive a 20% bonus on profits before the bonus.
Remaining profits and losses are divided between Yan² and Kat² in the ratio of 2:3, respectively. Which partner has
a greater advantage when the partnership has a profit or when it has loss?
Profit Loss Profit Loss
a. Yan² Kat² c. Kat² Yan²
b. Yan² Yan² d. Kat² Kat²
Problem 14
Partners AA, BB, and CC share profits and losses 5:3:2, respectively. The balance sheet at April 30,2018 follows:
Cash 40,000 Accounts payable 100,000
Noncash assets 360,000 AA, Capital 74,000
BB, Capital 130,000
CC, Capital 95,000
The assets and liabilities are recorded and presented at their respective fair values. DD is to be admitted as new
partner with a 20% capital interest and a 20% share of profits and losses in exchange for cash contribution. If no
bonus or goodwill is to be recorded, how much cash must DD contribute?
a. 60,000 b. 72,000 c. 75,000 d. 80,000
Problem 15
At the end of its fiscal year on June 30, 2005, the Beauty, Baeuty, and Buaety partnership had account balances as
follows:
Accounts receivable 30,000 Loan from Baeuty 25,000
Inventories 70,000 Beauty, capital – 20% 70,000
Plant assets-net 60,000 Baeuty, capital – 30% 50,000
Loan to Beauty 30,000 Buaety, capital – 50% 30,000
The percentages shown are the residual profit sharing ratios. Buaety also gets a P12,000 annual salary allowance.
The partners dissolved the partnership on July 1,2018 and began the liquidation process. During, July, the
following events occurred:
▪ Receivables of P 15,000 were collected,
▪ The inventory was sold for P20,00, and
▪ All available cash was distributed on July 31, except for P10,000 of expected expenses.
1. The (1) book value of the partnership equity on June 30,2005 and (2) the amount of cash Baeuty should
receive on July 31,2018 are:
a. 145,000 and 10,000 c. 145,000 and 3,000
b. 210,000 and 6,000 d. 120,000 and 9,000
Problem 16
The after-closing trial balance of PPP Partnership at December 31,2018 is summarized as follows:
Loan to Peter 40,000 Loans from Paul 50,000
Other assets 480,000 Peter, capital (25%) 70,000
Paul, capital (25%) 80,000
Pete, Capital (50%) 150,000
1. The partners agree to liquidate the business and distribute cash, as it becomes available. A cash
distribution plan for the partnership will show that cash available after non-partner liabilities are paid will go
to:
a. Paul in the amount of P55,000 c. Peter in the amount of P 20,000
b. Paul in the amount of P45,000 d. Pete in the amount of P 90,000
Problem 17
James desires to purchase a ¼ capital and profit and loss interest in the partnership of JAM. The three partners
agree to sell James ¼ of their respective capital and profit and loss interests in exchange for a total payment of
P40,000. The capital accounts and respective percentage interest in profits and losses immediately before the sale
to James are:
JA, capital – 60% 80,000
JM, capital – 30% 40,000
AM, capital – 10% 20,000
All other assets and liabilities are fairly valued, and implied goodwill is to be recorded prior to the acquisition by
James. Immediately after James’ admission, what should be the capital balances of JA, JM, & AM, respectively?
a. 60,000; 30,000; 15,000 c. 77,000; 38,500; 19,500
b. 69,000; 34,500; 16,500 d. 92,000; 46,000; 22,000
Problem 18
X, Y and Z are partners in a wholesale business. On Jan. 1, 2018 the total capital and drawings presented as
follows:
Capital Drawing- credit
X 375,000 36,000
Y 550,000 24,000
Z 1,125,000 17,000
Partners agree that profit and loss are shared equally. Because of the failure of some debtors to pay their
outstanding accounts, the partnership lose heavily and are complied to liquidate. The operating loss in 2018 is
P252,000. After exhausting the partnership assets they still owe P207,000 to creditors on Dec. 31, 2018. Y has no
personal assets but the others are well off. How much was absorbed by Z to eliminate the capital deficiency of Y?
a. 103,333 b. 103,000 c. 102,000 d. 204,000
Problem 19
The following information is provided in connection with the liquidation of a partnership: Abel advances the amount
to pay the partnership creditors.
Partnership capital Personal assets Personal liabilities
Partner P & L ratio Balance (Dr) Cr
Abel 10 520,000 650,000 440,000
Luis 30 260,000 390,000 325,000
May 20 (390,000) 520,000 485,000
Ystahl 40 (585,000) 260,000 390,000
What amount of cash did Abel received in the final settlement?
Problem 20
If a partner is insolvent, his personal properties shall be first distributed
a. to partnership creditors
b. to the partners by way of additional contributions when the assets of the partnership were insufficient to
settle all obligations.
c. to partnership and separate creditors in the ratio of their loan exposures
d. to separate creditors
Problem 21
Cortez, Pajarillo and Abel have capital balances of 52,500, 26,250 and 8,750, respectively in the CPA partnership.
The general partnership agreement is silent as to the manner in which partnership losses are to be allocated but
does provide that partnership profits are to be allocated as follows: 40% to Cortez, 25% to Pajarillo and 35% to
Abel. The partners have decided to dissolve and liquidate the partnership. After paying all the creditors, the amount
available for distribution will be 35,000. Cortez, Pajarillo and Abel are individually solvent. Under the circumstances,
Abel will:
a. Receive 12,250 c. Personally have to contribute an additional 9,625
b. Receive 21,000 d. Personally have to contribute an additional 8,750
CONCEPTUAL
1. In a situation where section 24 of the Partnership Act applies, which one or more of the following statements
are correct?
a) Profits and losses have to be shared equally
b) If any partner contributes more capital interest may be allowed at 5%
c) No interest can be paid on a loan received from a partner
d) No interest may be charged on amounts drawn by any partners
a. a & d b. c & d c. a & c d. b & c
2. With regard to a business carried on as a partnership which one or more of the following statements are
correct?
a) A partner may agree to join on condition he would risk only his capital amount
b) As a sleeping partner, a partner may be excused from management responsibility
c) By agreement a partner may require interest on his loans at 12% per annum
d) If registered with the Registrar of Companies as a Limited Liability Partnership partners’ liability could be
restricted to the amount of capital contributed
a. b & d b. b & c c. c & d d. a & d
3. For which one or more of the following reasons would you advise partners to have their financial statements
professionally audited?
a) So that each partner may feel assured that his / her interests are protected.
b) It is a legal requirement.
c) To avoid disputes and possible litigation.
d) It enhance the prestige of the business.
a. b & c b. c & d c. a & c d. a & d
4. Where a partnership maintains separate Capital accounts and Current accounts for each partner, which one or
more of the following should be credited to the Current accounts?
a) Share of profit from the partnership
b) Gain on fair valuing an asset or recording partnership goodwill
c) Unpaid portion or any rent, salary or interest due to a partner
d) Additional capital introduced by a partner during the year
a. b & c b. a & d c. a & c d. c & d
5. Which one or more of the following are charges (rather than appropriation) of profit among partners?
a) Salary payable to a partner
b) Rent payable to a partner
c) Interest payable to a partner on any loan received by the partnership
d) Interest allowed on partners’ capital account balances
a. a & d b. a & c c. c & d d. b & c
6. In which of the following circumstances would you suggest that a partnership agreement should provide that
salary and interest on capital should be allowed to partners?
a) If there is a difference in the effort contribution made by all partners
b) If there is a difference in the amount contributed as capital by each partner
c) If that is fashionable in the trade or business carried on by the partnership.
d) If one or more partners are cleverer than others
a. a & b b. a & c c. b & c d. c & d
7. In which of the following circumstances is there a need for fair valuing partnership assets and recording any
partnership goodwill?
a) When a new partner is admitted
b) When an existing partner retires or dies
c) Whenever the partnership prepares its financial statements
d) When there is a change in the profit sharing arrangements among existing partners
a. All four b. a, b & d c. a & c d. b, c & d
8. Having recognised goodwill in specific circumstances, for which of the following reasons are partners usually
reluctant to continue recording goodwill in their books?
a) Goodwill is an intangible asset
b) Goodwill does not bring in future economic benefit
c) Goodwill cannot be realised unless the whole business is sold as a going concern
d) Goodwill is a fiction of business imagination
a. a & c b. a, b & d c. b, c & d d. All four
9. Whenever there is a change in the profit sharing arrangements among partners, which of the following need
adjustments?
a) Goodwill not recorded or partly recorded in the books
b) Work in progress which is usually not recorded in partnership of professionals
c) Any asset not recorded at its fair value on that date
d)partnership joint life policy where the premiums paid have been written off
a. a, b & d b. All four c. b, c & d d. a, c & d
10. With regard to interest charged on partners’ drawings which one or more of the following statements is / are
correct?
a) Interest is charged to ensure partners do not draw their profit share at all
b) Interest is charged to discourage drawings prior to the year end
c) Irrespective of the date of drawing interest is payable for the whole accounting year
d) Interest is an additional earning for the partnership
a. c & d b. a & b c. b only d. b & d
11. Which of the following is the correct way of accounting for interest charged on a partner’s drawings?
a. Debit an expense account (to be shown in Income Statement) and credit Current account
b. Debit in the appropriation section of the Income Statement and credit Current account
c. Debit Current account and credit an income account ( to be added to partnership gross profit)
d. Debit Current account and credit in the appropriation section of the Statement of income
12. With regard to death or retirement of a partner which of the following statement (s) is / are correct
a) When a partner leaves his dues should be settled at once
b) If retiring partner’s due are not immediately settled interest becomes payable at 5%
c) A deceased partner’s dues, if not immediately settled, is recorded as an Estate
d) Interest on a deceased partner’s dues is a charge (rather than appropriation) of profit
a. a, b & c b. a & b c. c & d d. b, c & d
13. When a partnership is dissolved, piece-meal, and the following claims need to be met out of the cash realised,
which is the correct sequence in which these claims have to be met?
a) Any partner’s loan
b) Return capital & current account balances
c) Expenses of dissolution
d) Outsider’s claims (payables and accruals)
a. Appropriation of partnership profit c. a, b, d & c
b. c, d, a & b d. b, c, a & d
Peter and Quintus were in partnership sharing profits in the ratio 3:2 respectively. They admitted Rufus for a fourth
share of profit. What will be the new profit sharing ratio of all three partners in each of the following independent
scenarios:
14. If the examiner gives no instruction what ever
a. Peter: 1; Quintus: 1; Rufus: 1;
b. Peter: 9; Quintus: 6; Rufus: 5;
c. Peter: 3; Quintus: 2; Rufus: 1
15. If Peter and Quintus agreed to hand over equally the portion of profit Rufus is being admitted to.
a. Peter: 1; Quintus: 1; Rufus: 1
b. Peter: 3; Quintus: 2; Rufus: 1
16. If partners agree that the whole of the share Rufus is entitled to should be given up by Peter.
a. Peter: 3; Quintus: 2; Rufus: 1
b. Peter: 1; Quintus: 1; Rufus: 1
17. Under an installment liquidation of the company:
a. A safe payment schedule must be prepared before each cash distribution to avoid excessive payments to
partners
b. A cash distribution program must be prepared so that each partner will know when he or she will be
included in the cash distribution
c. Cash will be distributed in the profit and loss sharing ratio as it becomes available
d. No cash should be distributed until all Noncash assets are converted into cash
MULTIPLE CHOICE PROBLEMS

18. A, B and C are in partnership without an agreement. However, C is entitled to rent from the partnership at
Php2,000 per month, while B has provided a loan of Php 50,000 to the partnership. The partnership profit for
the year ended 31 December 2018, without deducting rent payable to Carol and any interest to B, is Php
438,400. Identify the share of partnership profit each partner is entitled to.
a. A: Php 137,300; B: Php 137,300; C: Php 161,300
b. A: Php 137,300; B: Php 137,300; C: Php 137,300
c. A: Php 137,300; B: Php 139,800; C: Php 137,300
d. A: Php 137,300; B: Php 139,800; C: Php 161,300
19. A, B and C are in partnership without an agreement. The partnership profit for the year ended 31st March 2018,
after writing off Php 58,400 as bad debts, has been determined as Php 398,000. The partners have agreed,
however, that A should bear Php 28,000 of the bad debt .Identify the share of partnership profit each partner is
entitled to.
a. A: Php 114,000; B: Php 142,000; C: Php 142,000
b. A: Php 123,334; B: Php 123,333; C: Php 123,333
c. A: Php 142,000; B: Php 142,000; C: Php 142,000
d. A: Php 132,667; B: Php 132,667; C: Php 132,666
20. A, B and C are in partnership with an agreement that provides for a salary of Php 2,000 per month to A, interest
of their fixed capital balances at 6% per annum and profit sharing in the ratio 3: 2: 1 respectively. Capital
account balances of A, B and C were Php 500,000, Php 300,000 and Php 200,000 respectively. Profit for the
year ended 31st March 2018 was Php 728,400. Identify the partnership profit each partner is entitled to in that
year.
a. A: Php 137,300; B: Php 139,800; C: Php 161,300
b. A: Php 376,200; B: Php 232,800; C: Php 119,400
c. A: Php 214,800; B: Php 214,800; C: Php 214,800
d. A: Php 268,800; B: Php 232,800; C: Php 226,800
21. E, F and G, with capital balances of Php 300,000, Php 200,000 and Php 200,000, are in partnership, sharing
profits and losses in the ratio 2: 2: 1 respectively, after allowing G a salary of Php 1,500 per month, and all
partners’ interest at 8% per annum on their capital account balances. Rent is payable to G at Php 3,000 per
month. Profit for the year ended 30th June 2012, without deducting rent, has been calculated at Php
104,000.Identify the partnership profit each partner would be entitled to in respect of the year ended 30th June
2018.
a. E: Php 26.400; F: Php 18,400; G: Php 35,200
b. E: Php 21,600; F: Php 13,600; G: Php 32,800
c. E: Php 12,000; F: Php 12,000; G: Php 6,000
d. E: Php 21,600; F: Php 13,600; G: Php 68,800
L and M were in partnership without any agreement. They admitted Newton to partnership on 1st October 2018.
Profit of the partnership for the year ended 31st December 2018 was Php 714,000 .Determine each partner’s share
of profit in each of the following independent scenarios:
22. Assuming that profit accrued consistently throughout the year.
a. L: Php 357,000; M: Php 357,000; N: -
b. L: Php 238,000; M: Php 238,000; N: Php 238,000
c. L: Php 327,250; M: Php 327,250; N: Php 59,500
23. If sales in each of the three months after admission of Newton was double that in the previous nine months.
a. L: Php £309,400; M: Php 309,400; N: Php 95,200
b. L: Php 327,250; M: Php 327,250; N: Php 59,500
c. L: Php 238,000; M: Php 238,000; N: Php 238,000
24. If sales in the three months after admission of N was double that in the previous nine months and you are
informed that when arriving at the profit of Php 714,000 for the year, distribution cost of Php 280,400 and
administrative expenses of Php 989,100 have been written off.
a. L: Php 284,673; M: Php 284,672; N: Php 144,655
b. L: Php 238,000; M: Php 238,000; N: Php 238,000
c. L: Php 327,250; M: Php 327,250; N: Php 59,500
25. Profits accrued consistently through out the year. But at admission, N’s share of partnership profit was
guaranteed by the partnership at Php 240,000 per annum.
a. L: Php 237,000; M: Php 237,000; N: Php 240,000
b. L: Php 327,000; M: Php 327,000; N: Php 60,000
c. L: Php 137,300; M: Php 139,800; N: Php 161,300
26. Profits accrued consistently through out the year. But at admission N’s share of partnership profit was
guaranteed by L at Php 240,000 per annum.
a. L: Php 326,750; M: Php 327,250; N: Php 60,000
b. L: Php 146,750; M: Php 327,250; N: Php 240,000
c. L: Php 268,800; M: Php 232,800; N: Php 226,800
27. Profits accrued consistently throughout the year. But at admission, M was assured by L that if N’s share of
profit exceeds Php 200,000 per annum, L will bear the whole of the excess.
a. L: Php 317,750; M: Php 336,750; N: Php 59,500
b. L: Php 322,500; M: Php 332,000; N: Php 59,500
c. L: Php 326,750; M: Php 327,250; N: Php 60,000
28. M, N and O are in partnership on the basis of an agreement which provides for equal sharing of profits after
allowing M salary at Php 3,000 per month, but requires interest to be charged on drawings at 6% per annum. M
drew her salary regularly at the end of each month. Partnership profit for the year ended 30th June 2018 was
Php312,700. Identify the share of partnership profit each partner in each of the following independent
scenarios:
M drew an additional Php 10,000 on 1st December 2017 while Nelly drew Php 20,000 on 1st January and Olive
Php 15,000 on 1st April 2018
a. M: Php 92,625; N: Php 92,625; O: Php 92,625
b. M: Php 127,491; N: Php 91,242; O: Php 91,617
c. M: Php 128,275; N: Php 92,025; O: Php 92,400
29. N and O each drew Php 2,000 per month, Nelly mid-way through the month and O on the last day of each
month.
a. M: Php 127,774; N: Php 91,053; O: Php 91,113
b. M: Php 128,694; N: Php 91,973; O: Php 92,033
c. M: Php 104,234; N: Php 104,233; O: Php 104,233
R and I, sharing profits in the ratio 2:1 respectively and finalizing annual accounts on 31st December, admit L for a
fourth share of profit on 1st March 2018. Until L’s admission the balances in the Capital accounts of R and I were
Php 300,000 and Php 200,000 respectively. L introduced Php 200,000 as capital. Their partnership agreement
provides for a salary to R of Php 2,000 per month and interest on capital at 6% per annum. Apart from the
adjustment to profit sharing ratio other terms of the agreement are to continue after the admission of L. Profit for the
year ended 31st December 2018 was Php 480,000 and it may be assumed to have accrued consistently
throughout the year. Identify the share of profit each partner would be entitled to in each of the following alternative
scenarios:
30. If goodwill, not appearing in the books, is valued on L’s admission at Php 300,000 and is to be recorded in the
books.
a. R: Php 234,833; I: Php 123,166; L: Php 92,500
b. R: Php 264,333; I: Php 123,167; L: Php 92,500
c. R: £258,833; I: Php 123,417; L: Php 97,750
31. If goodwill, not appearing in the books, is valued on L’s admission at Php 300,000, and should be adjusted for,
but is not to appear in the books.
a. R: Php 240,333; I: Php 123,167; L: Php 92,500
b. R: Php 264,333; I: Php 123,167; L: Php 92,500
c. R: Php 261,833; I: Php 121,917; L: Php 96,250
32. If goodwill, reported already in the books at Php 120,000, is valued at Php 300,000 on the date of L’s admission
and is to be reported in the books at the new value.
a. R: Php 241,833; I: Php 126,417; L: Php 87,750
b. R: Php 265,833; I: Php 126,417; L: Php 87,750
c. R: Php 263,333; I: Php 122,667; L: Php 94,000
33. If goodwill, reported in the books at Php 120,000, is valued on L’s admission at Php 300,000. However, the
partners have decided that goodwill should not appear in the books.
a. R: Php 261,833; I: Php 121,917; L: Php 96,250
b. R: Php 263,333; I: Php 122,667; L: Php 94,000
c. R: Php 239,333; I: Php 122,667; L: Php 94,000
34. On the date of L’s admission, noncurrent assets reported at Php 400,000 had a fair value of Php 760,000 and
goodwill, not recorded in the books is valued at Php 300,000. The partners have decided to report noncurrent
assets at their fair value but not to record goodwill in the books.
a. R: Php 240,333; I: Php 123,167; L: Php 92,500
b. R: Php 264,333; I: Php 123,167; L: Php 92,500
c. R: Php 267,333; I: Php 124,667; L: Php 88,000
The Statement of financial position as at 31st March 2018, of S and T, sharing profits equally, reported their
position as below. Current assets included Php 30,000 cash. Expenses of dissolution amounted to Php 4,000.
Answer the questions below treating each as an independent scenario:
Tangible noncurrent assets Php 180,000
Current assets 120,000
Current liabilities 80,000
35. On a piecemeal dissolution of the assets realized Php 240,000 and liabilities were discharged subject to 10%
discount; identify the gain or loss on dissolution of the partnership.
a. Loss Php 26,000 b. Loss Php 56,000 c. Gain Php 30,000
36. Sarah’s, capital and current accounts totalled £140,000, She took over from the partnership a vehicle acquired
for £30,000 and depreciated by £8,000, while the remaining assets were sold for £280,000 and liabilities
discharged subject to 20% discount. How much will Sarah receive on closure of the partnership.
a. Php 125 b. Php 142 c. Php 140
The Statement of financial position as at 30th June 2018 of G and A, equal partners, appear as below. Current
assets include £30,000 cash. C Ltd acquired the partnership on this date as a going concern. The total of the
Capital and Current account balances of G and A, on this date, were Php 150,000 and Php 70,000 respectively.
Answer the questions below treating each as an independent scenario:
Tangible non current assets Php 180,000
37. If goodwill was valued at Php 50,000, while tangible noncurrent assets and current assets were valued at
Php240,000 and Php 110,000 respectively, what is the purchase consideration receivable by the partners from
C?
a. Php 320,000 b. Php 400,000 c. Php 480,000
38. If C agreed to discharge the purchase consideration by an allotment to G and A, in their profit sharing ratio,
300,000 ordinary shares of Php 1 each at 120 each and a payment of Php 40,000 in cash, how much would C
be paying for the partnership goodwill, assuming that all assets were taken over at book value.
a. Php 400,000 b. Php 180,000 c. Php 100,000
39. If C valued the tangible noncurrent assets of the partnership at £240,000 and agreed to discharge the purchase
consideration by an allotment equally to both partners 800,000 ordinary shares of 50p each, at 60p per share
and an issue to Amber of £50,000 6% Loan Notes, how much would have been paid for goodwill?
a. Php 200,000 b. Php 170,000 c. Php 250,000
40. If C valued the tangible noncurrent assets at £300,000 and as purchase consideration agreed to allot equally to
both partners one million ordinary shares of 20p each at 25p per share and, in addition pay £50,000, how much
will Green receive in cash when the dissolution of the partnership is completed?
a. Php 50,000 b. Php 65,000 c. Php 105,000
The Statement of financial position as at 31st March 2012, of R and P, equal partners, appear as shown below.
Current assets include Php 30,000 cash. C Ltd acquired the business on this date as a going concern. The total of
the Capital and Current account balances of Rose and Pink, on this date, were Php 200,000 and Php 150,000
respectively. Partners have resolved to convert their books of account in to those of a company.
Tangible noncurrent assets Php 180,000
41. If purchase consideration is to be discharged by an allotment of 400,000 ordinary shares of Php 1 each at 120
per share and a payment of Php 20,000 in cash, what amounts will be reported in the Statement of financial
position of C Ltd as goodwill and cash upon the conversion?
a. Goodwill: Php 150,000; Cash: Php 10,000;
b. Goodwill: Php 150,000; Cash: Php 20,000;
c. Goodwill: Php 50,000; Cash: Php 10,000;
42. If in addition to the information in (a) above you are informed that at conversion the the tangible noncurrent
assets are fair valued at Php 380,000 and an allowance for doubtful debts set up at Php 5,000, at what value
will C Ltd report goodwill immediately after the conversion?
a. Goodwill: Php 225,000 b. Goodwill: Php 65,000 c. Goodwill: Php 75,000

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LYCEUM OF THE PHILIPPINES UNIVERSITY

ACCOUNTANCY REVIEW asa cpa

Characteristics of a Partnership. It is an unincorporated association of two or more individuals to carry on a

Recognition of Bonus on Initial Investments.

Accounts payable Php 135,000 Php 240,000

Dela Cruz 1/ 10,000

Allocation of Net Income of $60,000

Avila Abel Dela Cruz Total

MULTIPLE CHOICE PROBLEMS

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