Drill #1: On May 1, 2023. Jose and Maria formed a partnership and shared 3:7.

Jose
contributed a computer costing 50,000 and Maria 200,000 cash. The computer was sold
worth 55,000 on May 1, 2013. What amount should be recorded in Jose's Capital
Account?

Jose Maria Partnership

Cash 200,000 200,000
Computer (FMV) 55,000 55,000
255,000

Answer: 55,000 Fair Market Value

Note: 55,000 is the answer because we need to consider the “order of priority.” Una sa
order of priority is ang AGREED VALUE, pangalawa is FAIR MARKET VALUE, pangatlo
CARYING AMOUNT. Sa problem, ang 50,000 na unang na banggit na value ng computer
ay ang CARRYING AMOUNT nito. Sumunod na binanggit na value para sa computer ay
55,000 which is ang FAIR MARKET VALUE na nung computer. Kaya ang final answer
natin ay 55,000.
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Drill#2: Red, White, and Blue formed a partnership on May 1, 2013. Red contributed
office equipment with a fair market value of 40,000. White contributed a delivery
equipment worth 80,000. Suppose Blue wants 1/3 capital interest and profits. How
much should he contribute to the partnership?

66.6666% 33.3333% 100%

Red White Blue Partnership
Cash 60,000 60,000
Office Equipment 40,000 40,000
Delivery Equipment 80,000 80,000
180,000

Solution: If we add the contributions of Red and White, we can get the 2/3 or 66.6666%
of the contributions considering that Blue supposedly has a 1/3 capital interest.

(Red + White) 1
Blue(1/3) = ×
2/3 3
120,000 1
= ×
2/3 3
= 60,000
Drill#3: Mateo and Julio formed a partnership on April 1. Mateo contribute a cash of
300,000. Julio also contributes cash of 100,000 and Land worth 300,000 with a Mortgage
value of 50,000 that the partnership will assume. What is the total capital of Julio?

Mateo Julio Partnership

Cash 300,000 100,000 400,000
Land 300,000 300,000
Mortgage (50,000) (50,000)
650,000

Journal Entry
Julio’s Capital
Debit Credit
Cash 100,000
Land 300,000
Mortgage 50,000
Julio, Capital 350,000

Answer: 350,000

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Drill#4: Elsa and Perla formed a partnership. Elsa wants a 60% capital interest and she
contributed 300,000. Perla contributes Land worth 40,000 with a fair market value of
70,000, additionally Tax based of 50,000, she also contribute a building worth 90,000
with mortgage value of 40,000 that the partnership will assume. How much cash
should Perla contribute?

60% 40%
Elsa Perla Partnership
Cash 300,000 80,000 380,000
Land 70,000 70,000
Building 90,000 90,000
Mortgage (40,000) (40,000)
500,000
Solution:
Step 1 - We need to know the total value of contributions in the partnership
(Partner's total contributions)
Total Contributions =
(Partner's Capital Interest)
300,000
=
60%
= 500,000
Step 2 - We need to less all the given contributions to the Total Contributions for us to
be able to find how much cash should Perla need to contribute to the partnership.
 Elsa’s Cash 300,000
Perla: Land (FMV); 70,000
Building 90,000
Mortgage (40,000)
=420,000

Perla's Cash Contribution = 500,000 − 420,000

Answer = 80,000