PAMANTASAN NG LUNGSOD NG VALENZUELA

College of Business, Accountancy and Public Administration Accountancy Department

SET A Partnership Multiple Choice

Identify the choice that best completes the statement or answers the question. 1. Shue, a partner in the Financial Brokers Partnership, has a 30
percent share in partnership profits and losses. Shue's capital account had a net decrease of P100,000 during 2013. During 2013 Shue withdrew P240,000 as withdrawals and contributed equipment valued at P50,000 to the partnership. What was the net income of the Financial Brokers Partnership for 2013? a. P300,000 b. P190,000 c. P633,334 d. P466,666

6. Albion and Blaze share profits and losses equally. Albion and
Blaze receive salary allowances of P20,000 and P30,000, respectively, and both partners receive 10% interest on their average capital balances. Average capital balances are calculated at the beginning of each month balance regardless of when additional capital contributions or permanent withdrawals are made subsequently within the month. Partners drawings are not used in determining the average capital balances. Total net income for 2013 is P120,000. Albion Blaze January 1 capital balances P100,000 P 120,000 Yearly drawings (P1,500/mo) 18,000 18,000 Permanent withdrawals of capital: June 3 (12,000) May 2 (15,000) Additional investments of capital: July 3 40,000 October 2 50,000 What is the weighted-average capital for Albion and Blaze in 2013? a. P113,000 and P124,500 b. P110,667 and P119,583 c. P105,333 and P126,667 d. P100,000 and P120,000

2. Partner Alta had a capital balance on January 1, 20X5 of

P45,000 and made additional capital contributions during 20X5 totaling P50,000. During the year 20X5, Alta withdrew P8,000 per month. Altas postclosing capital balance on December 31, 20X5 is P30,000. Altas share of 20X5 partnership income is _________________. a. P31,000 b. P96,000 c. P50,000 d. P8,000

3. In the RST partnership, Ron's capital is P80,000, Stella's is

P75,000, and Tiffany's is P50,000. They share income in a 3:2:1 ratio, respectively. Tiffany is retiring from the partnership. Refer to the above information. Tiffany is paid P56,000, and all implied goodwill is recorded. What is the total amount of goodwill recorded? a. P36,000 b. P6,000 c. P30,000 d. P0

4. In the AD partnership, Allen's capital is P140,000 and Daniel's

is P40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. Allen and Daniel agree that some of the inventory is obsolete. The inventory account is decreased before David is admitted. David invests P40,000 for a one-fifth interest. What are the capital balances of Allen and Daniel after David is admitted into the partnership? a. P137,000; P39,000 b. P125,000; P35,000 c. P120,000; P36,000 d. P140,000; P40,000

7. Partners A and B have a profit and loss agreement with the

following provisions: salaries of P30,000 and P45,000 for A and B, respectively; a bonus to A of 12% of net income after salaries and bonus; and interest of 10% on average capital balances of P50,000 and P65,000 for A and B, respectively. One-fourth of any remaining profits are allocated to A and the balance to B. If the partnership had net income of P108,600, how much should be allocated to Partner A? a. P47,850 b. P43,225 c. P43,816 d. P65,375

5. 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? a. P11,650. b. P11,450. c. P11,000. d. P12,100.

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SET A
8. Davis has decided to retire from the partnership of Davis,
Eiser, and Foreman. The partnership will pay Davis P200,000. Goodwill is to be recorded in the transaction as implied by the excess payment to Davis. A summary balance sheet for the Davis, Eiser, and Foreman partnership appears below. Davis, Eiser, and Foreman share profits and losses in a ratio of 1:1:3, respectively.

13. Callie is admitted to the Adams & Beal Partnership under the
bonus method. Callie contributes cash of P20,000 and non-cash assets with a market value of P30,000 and book value of P15,000 in exchange for a 20% ownership interest in the new partnership. Prior to the admission of Callie, the capital of the existing partnership was P130,000 and an appraisal showed the partnership net assets were fairly stated. What will be Callies initial capital balance? a. P50,000 b. P35,000 c. P36,000 d. P30,000

Assets Cash P Inventory Marketable securities Land Building-net Total assets P

75,000 82,000 38,000 150,000 255,000 600,000

14. Don and Key form a partnership. Don contributes into the
partnership a personal computer that he has used at home in nonbusiness related activities. Don had paid P10,000 for the computer 2 years ago. The current market value of the computer is P9,000. The partners assigned the computer a useful life of 5 years. For financial reporting purposes, at what amount should the computer be recorded in the partnership ledger? a. P6,000 b. P10,000 c. P7,500 d. P9,000

Equities Davis, capital 160,000 Eiser, capital 140,000 Foreman, capital 300,000 Total equities P 600,000 What partnership capital will Eiser have after Davis retires? a. P100,000. b. P140,000. c. P220,000. d. P180,000.

15. Palit buys Quincy's partnership interest in the Q-R-S

partnership. Quincy thus retires, leaving Reale and Susien as Palit's co-partners. Prior to Palit entering the partnership, Quincy, Reale, and Susien split profits and losses equally. Palit pays P75,000 for Quincy's capital which, at the time, totaled P60,000. No revaluation of partnership assets or liabilities occurs at the time. In recording this event on the partnership books a. Palit capital is created in the amount of P60,000. b. Goodwill is booked based on the book value/fair value difference. c. P7,500 bonuses are added to Reale and Susien capital. d. P5,000 bonuses are added to Quincy, Real, and Susien capital.

9. Assume the existing capital of a partnership is P100,000. Two

partners currently own the partnership and split profits 40/60. A new partner is to be admitted and will contribute net assets with a fair value of P50,000. An appraisal of existing partnership assets indicates accounts receivable overstated by P10,000, inventory overstated by P12,000 and land understated by P25,000. What is the total capital of the new partnership if the bonus method is being used? a. P150,000 b. P153,000 c. P128,000 d. P175,000

10. Partners A and B have a profit and loss agreement with the
following provisions: salaries of P41,600 and P38,400 for A and B, respectively; a bonus to A of 10% of net income after salaries and bonus; and interest of 10% on average capital balances of P20,000 and P35,000 for A and B, respectively. One-third of any remaining profits are allocated to A and the balance to B. If the partnership had a net income of P36,000, how much should be allocated to Partner A, assuming that the provisions of the profit and loss agreement are ranked by order of priority starting with salaries? a. P18,000 b. P41,600 c. P18,720 d. P12,000

16. In the RST partnership, Ron's capital is P80,000, Stella's is

P75,000, and Tiffany's is P50,000. They share income in a 3:2:1 ratio, respectively. Tiffany is retiring from the partnership. Tiffany is paid P60,000, and no goodwill is recorded. What is the Ron's capital balance after Tiffany withdraws from the partnership? a. P71,000 b. P74,000 c. P75,000 d. P86,000

17. Partners Acker, Becker & Checker have the following profit
and loss agreement: (1) Acker & Becker receive salaries of P40,000 each (2) Checker gets a bonus of 10 percent of net income after salaries and bonus (the bonus is zero if salaries exhaust net income) (3) Remaining profits are shared by Acker, Becker & Checker in the following ratios respectively: 3:4:3. The partnership had a net income of P91,000. How much should be allocated to Checker? a. P1,000 b. P4,000 c. P10,300 d. P3,300

11. In the AD partnership, Allen's capital is P140,000 and Daniel's

is P40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. Allen and Daniel agree that some of the inventory is obsolete. The inventory account is decreased before David is admitted. David invests P40,000 for a one-fifth interest. What is the amount of inventory written down? a. P15,000 b. P4,000 c. P10,000 d. P20,000

18. The partnership of X and Y shares profits and losses in the

ratio of 60 percent to X and 40 percent to Y. For the year 2013, partnership net income was double X's withdrawals. Assume X's beginning capital balance was P80,000, and ending capital balance (after closing) was P140,000. Partnership net income for the year was: a. P500,000. b. P600,000. c. P120,000. d. P300,000.

12. Ace & Barnes partnership has income of P110,000 and Partner
A is to be allocated a bonus of 10% of income after the bonus, Partner A's bonus would be ______________. a. P11,000 b. P9,000 c. P9,091 d. P10,000

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SET A
19. In the AD partnership, Allen's capital is P140,000 and Daniel's
is P40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. What amount will David have to invest to give him one-fifth percent interest in the capital of the partnership if no goodwill or bonus is recorded? a. P36,000 b. P60,000 c. P45,000 d. P50,000

23. Partner A first contributed P20,000 of capital into an existing

partnership on February 1, 20X1. On June 1, 20X1, the partner contributed another P20,000. On September 1, 20X1, the partner withdrew P15,000 from the partnership. Withdrawals in excess of P5,000 are charged to the partner's capital account. The partnership's fiscal year end is December 31. The annual weighted-average capital balance is a. P25,000 b. P30,000 c. P26,667 d. P28,334

20. Caine, Osman, and Roberts formed a partnership on January

1, 20x4, agreeing to distribute profits and losses in the ratio of original capitals. Original investments were P625,000, P250,000 and P125,000 respectively. Earnings of the firm and drawings by each partner for the period 20x4-20x6 follows: Drawings Net income (loss) Caine Osman Roberts 20x4 P440,000 P150,000 P78,000 P52,000 20x5 185,000 150,000 78,000 52,000 20x6 ( 105,000) 100,000 52,000 52,000 At the beginning of 20x7, Caine and Osman agreed to permit Roberts to withdraw from the firm. Since the books for the firm had never been audited, the partners agreed to an audit in arriving at the settlement amount. In withdrawing, Roberts was allowed to take certain furniture and was charged P15,000, although the book value was P45,000; the balance of Roberts interest was paid in cash. The following items were revealed in the course of the audit at the of each year: 20x4 20x5 20x6 Under of accrued expenses P 4,000 P 5,000 P 6,500 Under of accrued revenue 2,500 1,000 1,500 Over of inventories 15,000 20,000 20,000 Under of depreciation expense on assets still held 1,500 3,500 2,000 How much must Roberts received from the partnership? a. P15,250 b. P511,250 c. P156,500 d. P11,250

24. Partners A and B have a profit and loss agreement with the
following provisions: salaries of P40,000 and P45,000 for A and B, respectively; a bonus to A of 10% of net income after salaries and bonus; and interest of 15% on average capital balances of P40,000 and P60,000 for A and B, respectively. One-third of any remaining profits or losses are allocated to B and the balance to A. If the partnership had net income of P52,000, how much should be allocated to Partner A? a. P14,000 b. P38,000 c. None of the above d. P30,000

25. Roel, Jekell and Mike, CPAs, decide to form a partnership and
agree to distribute profits in the ratio 5:3:2. It is agreed, however, that Roel and Jekell shall guarantee fees from their own clients of P600,000 and P500,000 respectively, that any deficiency is to be charged directly against the account of the partner failing to meet the guarantee, and that any excess is to be credited directly to the account of the partner with fees exceeding the guarantee. Fees earned during 20x4 are classified as follows: From clients of Roel P1,000,000 From clients of Jekell 400,000 From clients of Mike 100,000 Operating expenses for 20x4 are P200,000. Determine the share of Roel on the operating results for the year 20x4. a. P200,000 b. P500,000 c. P900,000 d. P300,000

26. Allen, Branden & Caylin are in the process of liquidating their
partnership. They have the following capital balances and profit and loss percentages: Capital Balance Profit/Loss % Allen 5,000 debit 20% Branden 18,000 credit 50% Caylin 6,000 credit 30% The partnership balance sheet shows cash of P5,000, non-cash assets of P14,000, and no liabilities. Assuming no liquidation expenses, what safe payment could be made? a. P5,000 split between Branden & Caylin by a ratio of 5/8 and 3/8, respectively. b. P18,000 to Branden only c. P1,000 to Allen, P2,500 to Branden, and P1,500 to Caylin d. P5,000 to Branden only

21. In the RST partnership, Ron's capital is P80,000, Stella's is

P75,000, and Tiffany's is P50,000. They share income in a 3:2:1 ratio, respectively. Tiffany is retiring from the partnership. Each of the following questions is independent of the others. Tiffany is paid P60,000, and no goodwill is recorded. In the journal entry to record Tiffany's withdrawal: a. Stella, Capital will be debited for P4,000. b. Cash will be debited for P60,000. c. Tiffany, Capital will be credited for P60,000. d. Ron, Capital will be debited for P5,000.

22. In the AD partnership, Allen's capital is P140,000 and Daniel's

is P40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. David invests P40,000 for a one-fifth interest in the total capital of P220,000. The journal to record David's admission into the partnership will include: a. a credit to Daniel, Capital for P1,000. b. a credit to Cash for P40,000. c. a credit to David, Capital for P40,000. d. a debit to Allen, Capital for P3,000.

27. A partnership has the following capital balances: A (20% of

profits and losses) _ P100,000; B (30% of profits and losses) _ P120,000; C (50% of profits and losses) _ P180,000. If the partnership is to be liquidated and P30,000 becomes immediately available, who gets that money? a. P22,000 to A, P3,000 to B, P5,000 to C. b. P24,000 to A, P6,000 to B, 0 to C. c. P22,000 to A, P8,000 to B, 0 to C. d. P6,000 to A, P9,000 to B, P15,000 to C.

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SET A
28. After all noncash assets have been converted into cash in the
liquidation of the Guiron and Horacio Partnership, the ledger contains the following accounts: Cash P141,000 Accounts payable P96,000 Loan payable to Guiron 45,000 Guiron, capital 21,000 Horacio, capital 21,000 Available cash should be distributed with P96,000 going to accounts payable and a. P21,000 to Guiron and P24,000 to Horacio b. P45,000 to the loan payable to Guiron c. P22,500 each to Guiron and Horacio d. P24,000 to Guiron and P21,000 to Horacio

29. G. Doria and H. Elima are partners with capital balances and profit and loss ratio as follows: Capital P/L Ratio G. Doria P24,500 60% H. Elima 15,500 40% P40,000 100% The partners decided to liquidate the partnership. The firms liabilities amount to P36,000, including P4,000 owing to Doria and P3,500 owing to Elima on loans After realization of assets, the cash on hand amounts to P37,500. In the settlement to partners. Doria and Elima would receive a. P22,500 and P15,000, respectively b. P 5,400 and P 3,600 respectively c. P 1,500 and P 1,000 respectively d. P 4,000 and P 3,500 respectively 30. Partner T is personally insolvent, owing P400,000. Personal assets will only bring P150,000 when liquidated. At the same time, T has a credit capital balance in the partnership of P85,000. The capital amounts of the other partners total a (credit) balance of P200,000. Under the doctrine of marshaling of assets, the personal creditors of T can collect up to __________. a. P235,000 b. P400,000 c. P435,000 d. P150,000 31. The balance sheet for the partnership of Delima, Endaya, and Florante, whose shares of profits and losses are 40%, 50%, and 10%, is as follows: Cash P150,000 Accounts payable P450,000 Inventory 1,080,000 G. Delima, capital 480,000 H. Endaya, capital 135,000 I. Florante, capital 165,000 Assets P1,230,000 Liabilities and equity P1,230,000 If the inventory is sold for P900,000, how much should Delima receive upon liquidation of the partnership? a. P480,000 b. P300,000 c. P408,000 d. P104,000

32. The assets and equities of the NOP Partnership at the end of its fiscal year on October 31, 2013 are as follows: Cash P 150,000 Liabilities P500,000 Receivables- net 200,000 Loan, M. Perez 100,000 Inventory 400,000 E. Nera, (30%) 450,000 Plant assets- net 700,000 R. Oropesa,(50%) 300,000 Loan to F. Oropesa 50,000 M. Perez, (20%) 150,000 P1,500,000 P1,500,000 The partners decide to liquidate the partnership. They estimate that the noncash assets other than the loan to Oropesa can be converted into P1,000,000 cash over the two- month period ending December 31,2013. Cash is to be distributed to the appropriate parties as it becomes available during the liquidation process. If P650,000 is available for the first distribution, it should be paid to Priority creditors, E. Nera, F. Oropesa, M. Peres, respectively? a. P600,000 ;P 50,000 ;P 0;P 0 b. P500,000;P120,000; P 0; P 30,000 c. P500,000 ;P50,000;P 0;P100,000 d. P600,000 ; P15,000;P25,000; P 10,000 33. A. Mandela, B. Clarion, C. Yamson, and D. Lobregat are partners sharing profits and losses equally. The partnership is insolvent and is to be liquidated. The status of the partnership and each partner is as follows: Personal Personal Assets Liabilities Partnership (exclusive of (exclusive of Capital partnership partnership Balance interest) interest) Mandela (P45,000) P300,000 P120,000 Clarion ( 30,000) 90,000 180,000 Yamson 60,000* 240,000 15,000 Lobregat 90,000* 3,000 84,000 *Deficit The partnership creditors may obtain recovery of their claims a. from the personal assets of either Yamson or Lobregat b. from the personal assets of either Mandela or Yamson for all or some of their claims. c. in the amount of P18,750 from each partner d. from the personal assets of either Mandela or Clarion

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SET A
34. M. Diaz, L. Guevarra, and A. Miranda have capital balances of P90,000,P45,000, and P15,000 respectively, in the DGM 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 M. Diaz, 25% to L. Guevarra, and 35% to A. Miranda. The partners have decided to dissolve and liquidate the partnership. After paying all creditors, the amount available for distribution will be P60,000. M. Diaz, L. Guevarra, and A. Miranda are individually solvent. Using the preceding information, A. Miranda will a. receive P21,000 b. receive P36,000 c. personally have to contribute an additional P16,500 d. personally have to contribute an additional P15,000 35. W. Aguila, R. Balingit, and J. Corpuz are partners. On January 3, 2013, their capital balances and profit and loss ratio are as follows: Capital Profit & loss Ratio W. Aguila P25,000 60% R. Balingit 50,000 25% J. Corpuz 60,000 15% Corpuz withdrew P10,000 during the year. Net loss on December 31, 2013 totaled P20,000. Hence, the partners decided to liquidate the partnership. It is uncertain how much of the assets will ultimately yield but favorable realization is expected. It is, therefore, agreed to distribute cash as it becomes available. There are unpaid liabilities of P5,000 and cash on hand of P700. The amount to be realized by the partnership on the sale of its assets so that Aguila will receive a total of P19,000 in the final settlement of his interest is a. P6,000 b. P9,300 c. P103,300 d. P119,300 36. On December 31, the partnership accounts of I. Gabon, J. Hipolito and K. Imperial who share profits and losses in the ratio of 5:3:2 follow: I. Gabon, drawing debit P12,000 K. Imperial, drawing credit 4,800 Loans receivable Gabon 7,200 Loans payable Hipolito 14,400 I.Gabon, capital 59,400 J.Hipolito, Capital 44,400 K. Imperial, capital 39,000 Total partnership assets on this day stands at P211,200, including cash of P64,200. The partnership is liquidated and Imperial ultimately receives P33,000 in final liquidation. How much is the total loss on realization of the partnership? a. P54,000 b. P64,200 c. P10,800 d. P31,200 37. Carney, Pierce, Menton, and Hoehn are partners who share profits and losses on a 4:3:2:1 basis, respectively. They are beginning to liquidate the business. At the start of this process, capital balances are as follows: Carney, capital . . . . . . . . . . . P60,000 Pierce, capital . . . . . . .. . . . . . . . 27,000 Menton, capital . . . . . . . . . . . . . 43,000 Hoehn, capital . . . . . . . . . . . . . . 20,000 Which of the following statements is true? a. Carney will collect a portion of any available cash before Hoehn receives money. b. The first available P2,000 will go to Hoehn. c. Carney will be the last partner to receive any available cash. d. The first available P3,000 will go to Menton. 38. On July 1, 2013 the records of Mr. X, trustee in bankruptcy for B Corporation, showed the following: Cash P 57,400 Assets to be realized: Furnitures 70,000 Buildings 301,000 Machinery 196,000 Copyright 30,800 Liabilities to be liquidated: Accounts payable 560,000 Notes payable 280,000 Estate Deficit 184,400 During July, Mr. X sold machinery having a book value of P105,000 for P61,600 and sold the copyright for P84,000. Mr. X was paid P9,100 as trustee fee and P147,000 was distributed proportionately to the creditors. How much is the net income/(loss) at the end of the period? a. P1,100 b. (P700) c. (P1,100) d. P700 39. The following balance sheet summary, together with residual profit sharing ratios, was developed on April1, 2013, when the RST partnership began its liquidation: Cash P280,000 Liabilities P120,000 Receivable 120,000 Loan, D. Santos 40,000 Inventories 170,000 A. Reyes, (20%) 150,000 Plant assets- net 400,000 D. Santos, (40%) 400,000 Loan, A. Reyes 50,000 A. Torres, (40%) 310,000 P1,020,000 P1,020,000 If available cash except for a P10,000 contingency fund is distributed immediately, A. Reyes and D. Santos,and A.Torres, respectively, should receive a. P0; P160,000; and P30,000 b. P0, P145,000, and P15,000 c. P 0, P140,000; and P10,000 d. P32,000; P64,000, and P64,000

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SET A
40. A partnership is currently holding P400,000 in assets and P234,000 in liabilities. The partnership is to be liquidated, and P20,000 is the best estimation of the expenses that will be incurred during this process. The four partners share profits and losses as shown. Capital balances at the start of the liquidation follow: Kevin, capital (40%) . . . . . . . . . P59,000 Michael, capital (30%) . . . . . . . . . 39,000 Brendan, capital (10%) . . . . . . . . 34,000 Jonathan, capital (20%) . . . . . . . 34,000 The partners realize that Brendan will be the first partner to start receiving cash. How much cash will Brendan receive before any of the other partners collect any cash? a. P17,000. b. P19,500. c. P12,250. d. P14,750. 41. The following data were taken from the statement of realization and liquidation of XYZ Corporation for the quarter ended September 30, 2013: Assets to be realized P 330,000 Assets acquired 360,000 Assets realized 420,000 Assets not realized 150,000 Liabilities to be liquidated 540,000 Liabilities assumed 180,000 Liabilities liquidated 360,000 Liabilities not liquidated 450,000 Supplementary credits 510,000 Supplementary charges 468,000 The ending balances of capital stock and retained earnings are P300,000 and P120,000, respectively. What is the net income (loss) for the period? How much is the ending balance of cash? a. P(168,000); P720,000 b. P42,000; P560,000 c. P(210,000); P560,000 d. P168,000; P720,000 42. As of December 31, 2013, the books of GTB Partnership showed capital balances of Gueco P40,000; Tiongco P25,000; Barcelona P5,000. The partners profit and loss ratio was 3:2:1, respectively. The partners decided to dissolve and liquidate. They sold all the noncash assets for P37,000 cash. After settlement of all liabilities amounting to P12,000, they still have P28,000 cash cash left for distribution. The loss on realization of the noncash assets was: a. P40,000 b. P45,000 c. P28,000 d. P42,000 43. Kent Co. filed a voluntary bankruptcy petition on August 15, 2013, and the statement of affairs reflects the following book values and estimated current values. Assets Pledged with fully secured P300,000 P370,000 Pledged with partially secured 180,000 120,000 Free assets 420,000 320,000 P 900,000 P810,000 Liabilities Liabilities with priority P 70,000 Fully secured creditors 260,000 Partially secured creditors 200,000 Unsecured creditors 540,000 P1,070,000 Assume that the assets are converted to cash at the estimated current values and the business is liquidated. What amount of cash will be available to pay unsecured nonpriority claims? a. 240,000 b. 320,000 c. 360,000 d. 280,000 44. The trustee for John Corp. prepares a statement of affairs which shows that unsecured creditors whose claims total P 540,000 may expect to receive approximately P 405,000 if assets are sold for the benefit of creditors. a. Danielle Corp. holds a note for P22,500 on which interest of P1,350 is accrued, property with a book value of P18,000 and a realizable amount of P 27,000 is pledged on the note. b. Randolph, an employee is owed P6,750 for his salary. c. Baltimore Corp. holds a note of P54,000 on which interest of P2,700 is accrued, securities with a book value of P 58,500 and a realizable amount of P45,000 is pledged on the note. d. Nick Corp. holds a note for P9,000 on which interest of P500 is accrued, nothing has been pledged for the note. How much may each of the following creditors receive? Danielle Corp; Randolph Corp; Baltimore Corp.; Nick Corp., respectively. a. P 27,000 ; P5,063; P53,775 ; P 0 b. P 23,850; P 6,750; P56,700; P7,125 c. P27,000 ; P6,750; P56,700 ; P 0 d. P23,850; P6,750; P53,775 ; P 7,125

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SET A
45. On January 1, 2013, the partners of Cobb, Davis, and Eddy, who share profits and losses in the ratio of 5:3:2, respectively, decided to liquidate their partnership. On this date the partnership condensed balance sheet was as follows: Assets Cash P50,000 Other assets 250,000 P300,000 Liabilities and Capital Liabilities P60,000 Cobb, capital 80,000 Davis, capital 90,000 Eddy, capital 70,000 P300,000 On January 15, 2013, the first cash sale of other assets with a carrying amount of P150,000 realized P120,000. Safe installment payments to the partners were made the same date. How much cash should be distributed to each partner: Cobb, Davis, and Eddy, respectively ? a. P60,000;36,000;24,000 b. P15,000;51,000;44,000 c. P40,000;45,000;35,000 d. P55,000;33,000;22,000 46. Seco Corp. was forced into bankruptcy and is in the process of liquidating assets and paying claims. Unsecured claims will be paid at the rate of 40 cents on the dollar. Hale holds a P30,000 noninterest-bearing note receivable from Seco collateralized by an asset with a book value of P35,000 and a liquidation value of P5,000. The amount to be realized by Hale on this note is a. P 5,000 b. P12,000 c. P15,000 d. P17,000 47. L. Jurado , M. Kabigting , N. Lacosta, and O. Marcelo are partners, sharing earnings in the ratio of 3:4:6:8. The balance of their capital accounts on December 31, 2013 are as follows: L. Jurado P1,000 M. Kabigting 25,000 N. Lacosta 25,000 O. Marcelo 9,000 P60,000 The partners decided to liquidate, and they accordingly convert the noncash assets into P23,200 of cash. After paying the liabilities amounting to P3,000, they have P22,200 to divide. Assume that a debit balance in any of the partners capital is uncollectible. The book value of the noncash assets amounted to: a. P 61,000 b. P63,000 c. P25,200 d. P45,400 48. Partners Dalton, Edwards, and Finley have capital balances of P40,000, P90,000 and P30,000, respectively, immediately prior to liquidation. Total remaining assets have a book value of P160,000, the liabilities having been paid. Among these remaining assets is a machine with a fair value of P35,000. The partners split profits and losses equally. Edwards covets the machine and is willing to accept it for P35,000 in lieu of cash. The other partners have no designs on specific assets, only cash in liquidation. How much cash, in addition to the machine, would be first distributed to Edwards, before any of the other partners received anything? a. P50,000 b. P15,000 c. P300,000 d. P166,667 49. A review of the assets and liabilities of G Company in bankruptcy on June 30, 2013, discloses the ff: a. A mortgage payable of P118,000, is secured by building valued at P39,000 less than its book value of P172,000. b. Notes payable of P57,000 is secured by furniture and equipment with a book value of P76,000 that is 3/5 realizable. c. Assets other than those referred to have an estimated value of P44,000, an amount that is 75% of its book value d. Liabilities other than those referred to total P91,000, which included claims with priority of P23,000. How much was paid to the partially secured creditors? a. P48,260 b. P50,769 c. P49,380 d. P52,340 50. The following condensed balance sheet is presented for the partnership of Smith and Jones, who share profits and losses in the ratio of 60:40, respectively: Other assets P450,000 Smith, loan 20,000 Total P470,000 Accounts payable P120,000 Smith, capital 195,000 Jones, capital 155,000 Total P470,000 The partners have decided to liquidate the partnership. If the other assets are sold for P385,000, what amount of the available cash should be distributed to Smith? a. 159,000 b. 136,000 c. 195,000 d. 156,000

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Partnership Answer Section MULTIPLE CHOICE

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: ANS: A A A B C A B C C C D D C D A B B B C D A D A D C D B B B A C B B C D A D D C A A D C D B C PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: PTS: 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

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47. 48. 49. 50.

ANS: ANS: ANS: ANS:

A A B B

PTS: PTS: PTS: PTS:

1 1 1 1

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