Junior Phi
Junior Philippine
lippine Institut
Institute of Accoun
e of Accountants
tants
Baliwag Polytechnic College
Baliwag Polytechnic College
Baliwag, Bulacan
Baliwag, Bulacan
Mock Exam Part 1
Mock Exam Part 1
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Partnership #ormation Partnership #ormation Read and analyze
Read and analyze the questions the questions carefullycarefully.. "trictly no erasure"trictly no erasure. Encircle your answer. You are. Encircle your answer. You are given 1.5 hour to
given 1.5 hour to nish the exam. 1 pnish the exam. 1 point each answer. !5 points"oint each answer. !5 points" 1.
1. #n $pril %&' !&#n $pril %&' !&1!' $1!' $ye' (ee anye' (ee and )ee formd )ee formed a partnered a partnership *y com*ship *y com*ining their sepining their separatearate *usiness proprietorships. $ye contri*uted cash of +5'&&&. (ee contri*uted property with a *usiness proprietorships. $ye contri*uted cash of +5'&&&. (ee contri*uted property with a 5,'&&& carrying amount' a -&'&&& original cost and 1!&'&&& fair value.the partnership 5,'&&& carrying amount' a -&'&&& original cost and 1!&'&&& fair value.the partnership accepted responsi*ility for the
accepted responsi*ility for the mortgage paya*le of 5!'5&& attached to the mortgage paya*le of 5!'5&& attached to the propertyproperty. )ee. )ee contri*uted equipment with a carrying amount of ,5'&&&' 11!'5&& cost and !'5&& fair contri*uted equipment with a carrying amount of ,5'&&&' 11!'5&& cost and !'5&& fair value. /heir prot and losses are to *e shared equally *ut silent regarding capital
value. /heir prot and losses are to *e shared equally *ut silent regarding capital contri*utions. 0hich partner has the largest capital *alance $pril %&' !&1!
contri*utions. 0hich partner has the largest capital *alance $pril %&' !&1! $
$.. $$yyee )).. ))eeee
(.
(. (ee (ee 2. 2. $ll $ll capitacapital l accoaccount unt *alanc*alances es areare equal
equal
!.
!. #n 2ecem*e#n 2ecem*er 1' !&1! ' 3alou and 3atr 1' !&1! ' 3alou and 3att formed a partt formed a partnership' agrnership' agreeing to shareeing to share for prote for protss and losses in
and losses in the ratio !4% respectivelythe ratio !4% respectively. 3alou invested . 3alou invested a parcel of land that cost a parcel of land that cost himhim !5'&&&. 3att invested %&'&&& cash. /he land was sold for 5&'&&& on the same date three !5'&&&. 3att invested %&'&&& cash. /he land was sold for 5&'&&& on the same date three hours after formation of the partnership. ow much should *e the capital *alance of malou hours after formation of the partnership. ow much should *e the capital *alance of malou right after the formation
right after the formation $
$.. !!55''&&&&&& )). . --&&''&&&&&& (.
(. %&%&'&'&&& && 2. 2. 5&5&'&'&&&&& %.
%. #n marc#n march 1' !&1! 6h 1' !&1! 6atniss anatniss and 7ucas fod 7ucas formed a partrmed a partnership with eanership with each contrch contri*uting thei*uting the following assets4
following assets4
6atniss 7ucas
6atniss 7ucas
)
)aasshh %%&&&&''&&&&&& ++&&&&''&&&&&& 3
3aacchhiinneerry y !!55&&''&&&&&& ++55&&''&&&&&& (uilding
(uilding 8 8 !!5&'&&&!!5&'&&& 9
9 anandd 99 11&&&&''&&&&&& 88
/he *uilding is su*:ect o a mortgage loan of &&'&&& which is to *e assumed *y the /he *uilding is su*:ect o a mortgage loan of &&'&&& which is to *e assumed *y the
partnership. /heir ; < 7 ratio is %&= and +&=. #n march 1' !&1! the *alance in 7ucas>s partnership. /heir ; < 7 ratio is %&= and +&=. #n march 1' !&1! the *alance in 7ucas>s capital account should *e
capital account should *e
$
$. %. %++&&&&''&&&&&& ). ). %%&&55&&''&&&&&& (
(. %. %11,,&&''&&&&&& 22..!!??&&&&''&&&&&&
,.
,. #n 3arc#n 3arch 1' !&1!' )h 1' !&1!' )hesca ahesca and @a*ee decnd @a*ee decide to comide to com*ine their *usi*ine their *usinesses and fonesses and form arm a partnership. /heir *alance sheets on march 1' *efore ad:ustments' showed the following4 partnership. /heir *alance sheets on march 1' *efore ad:ustments' showed the following4
)
)hheessccaa @@aa**eeee
)
)aasshh ??''&&&&&& %%''++55&& $
$RR 11''55&&&& 11%%''55&&&& AAnnvveennttoorriieess %%&&''&&&&&& 11??''55&&&& 9
9 anand d 99' ' nneett %%&&''&&&&&& ??''&&&&&& #
#BBcce e eeqquuiipp>>tt' ' nneett 1111''55&&&& !!''++55&& ;
;rreeppaaiid d eexxppeennsseess --''%%++55 %%''&&&&&& /
/otal otal 1&5'%+51&5'%+5 51'5&&51'5&&
$
)apital 5?'-!5 %%'5&&
/otal 1&5'%+5 51'5&&
/hey agreed to have the C. items recorded in their *ooDs4 1. ;rovide != allowance for dou*tful accounts.
!. )hesca>s 9 and f should *e %1'&&& ' while @a*ee>s #Bce Equip>t is under depreciated *y !5&.
%. Rent expense incurred previously *y )hesca was not yet recorded amounting to 1'&&& while salary expense incurred *y @a*ee was not also recorded amounting to &&.
,. /he fair marDet value of inventory amounted to4 )hesca !?'5&&
@a*ee !1'&&&
)ompute the net de*it" credit ad:ustment for )hesca and @a*ee4
$. -1'?5& ). -5'55&
(. -%'+5& 2. -%'?5&
5. /he same info in no. , ' compute the total lia*ilities after formation4
$. 15+'?5 ). 1-&'+-5
(.15-'+5 2.15!'?5
)hicDen *a 0ell' let>s try it without choices.
-. #n 2ecem*er 1' !&1%' )arla and )lara :oined a partnership. )arla contri*uted cash while )lara contri*uted merchandise worth !5'&&& and a second hand delivery trucD currently valued at 5&'&&&' *ut encum*ered *y one year chattel mortgage note for 15'&&&. Af initial capital *alances are to conform to the prot sharing ratio !4%' the amount of cash contri*uted *y )arla was
Required4
a. /he capital *alance of )lara on 2ecem*er 1' !&1%. *. /he amount of cash contri*uted *y )arla.
c. /he total partnership assets on 2ecem*er 1' !&1%.
+. 3arie admits Fella as a partner in *usiness. Gust *efore the partnership>s formation' 3arie>s *ooDs showed the C4
)ash !'-&&
$R 1!'&&&
3. inventory 1'&&& $ccounts paya*le -'!&&
3arie' )apital !-',&&
At was agreed that' for purposes of esta*lishing 3arie>s investment in the rm' the C ad:ustments shall *e reHected4
• $llowance for *ad de*ts of != should set up.
• 3. inventory should *e valued !&'!&&
• ;repaid expenses of %5& and accrued expenses of ,&& should *e recognized.
Required4
a. /he ad:usted capital of 3arie.
*. Anvestment of Fella to secure 1I% interest in the partnership. c. /otal lia*ilities of the partnership.
. /aylor and @aga formed a partnership. /aylor contri*uted 5&'&&& cash. @aga contri*uted land and *uilding he purchased for 5&'&&& some time ago. is tax *asis in the property is now %&'&&& although it was recently appraised for +&'&&&. /here is a mortgage
paya*le attached to the *uilding that the partnership will assume. 0hat is the amount of @aga>s capital account after his contri*ution
?. @eorgina and Jolenn formed a partnership with each contri*uting the C assets4
@eorgina Jolenn
)ash %&'&&& +&'&&&
3achine !5'&&& +5'&&&
(uilding 8888 !!5'&&&
9 and 9 1&'&&& 8888
/he *uilding is su*:ect to mortgage paya*le of &'&&& which will not assumed *y the partnership. /heir ; and 7 ratio is 5&45&. /he *alance on Jolenn capital account should *e
1&. the same info in no. ? if the partnership assumed the mortgage paya*le the *alance of @eorgina>s capital account should *e
Partnership $perations
1. ;a*e*e and ;a*ae*ae are partners who share prots and losses in the ratio of -&=K ,&=. ;a*e*e salary is -&'&&& and %&'&&& for ;a*ae*ae. /he partners are also paid on their average capital *alances of %&'&&& and 1!'&&&. /he prot and loss allocation is
determined after deductions for the salary and interest payments. Af ;a*ae*ae share in the residual income income after salaries and interest" was -&'&&& in !&1!' what was the partnership income
a. 1?!'&&& *. %,5'&&& c. !!'&&& d. %+'&&&
!. /he partnership has the C accounting amounts4
Jales L +&'&&& )ogsL ,&'&&&
#perating ExpL 1&'&&&
Jalary allocations to partnersL1% '&&& Anterest paid to *anDs L !'&&&
;artner>s withdrawalL '&&&
/he partnership net income loss" is4 a. !&'&&&
*. 1'&&& c. 5&&& d. %&&&"
%. /he partnership agreement of M'Y' and N provides for the year8end allocation of net income in the following order4
• 9irst' M is to receive 1&= of net income up to !&&'&&& and !&= over !&&'&&&. • Y and N each are to receive 5= of the remaining income over %&&'&&&.
• /he *alance of income is to *e allocated equally mong the three partners.
/he partnership>s !&11 net income was 5&&'&&& *efore allocations to partners. 0hat amount should *e allocated to M
a. !&!'&&& *. !1-'&&& c. !&-'&&&
d. !!&'&&&
,. (a' (e and (i are partners with average capital *alances during !&1! of %-&'&&&' 1&'&&& and 1!&'&&&. ;artners receive 1&= interest on their average capital *alances. $fter
deducting salaries of ?&'&&& to (a' and -&'&&& to (i the residual ;<7 is divided equally. An !&1! the partnership sustained a ??'&&& loss *efore interest and salaries to partners. (y what amount should (a>s capital accounts change
a. !1'&&& increase *. %%'&&& decrease c. 1&5'&&& decrease d. 1!-'&&& increase
5. #n Ganuary 1' !&1! ' 2 and E decided to form a partnership. $t the end of the year' the partnership made a net income of 1!&'&&&. /he capital accounts of the partnership show the transactions.
2' capital E' capital
Gan.1 ,&'&&& !5'&&&
$pril1 5'&&&" 888
Gune 1 888 1&'&&&
$ug1. 1&'&&& 888
Jept1 888 %&&&"
#ct1 5'&&& 1'&&&"
2ec1 ,'&&& 5'&&&
$ssuming that an interest of !&= per annum is given on average capital and the *alance of the prots is allocated equally' the allocation of prots should *e4
a. 2 -&'&&&K E 5?',&& *. 2 -1'!&&K E 5'&& c. 2 -+!&&K E 5!'&& d. 2 -'&& K E 51'!&&
-. 6at' Ri' Fa are partners with average capital *alances during !&&+ of ?,5'&&& ' ,++'%&& and %!,'+&&. /he partners receive 1&= interest on their average *alances' salaries of !--'&&&to Ri and 1??'&& to 6at' any residual prot is divided in the raio of 1&4%&4,& Ri' 6at < Fa.
Af the partnership had a net loss of !-?'&&&' the share of Fa and 6at in the prot is
+. Af the partnership had a prot of 1&!'&&&' the share of Ri and 6at is
. 9ernan'(ernard' Ramil < 0enzcarlo are partners. /heir capital accounts during the year !&1! were s follows4
)apital' 9ernan )apital' Ramil
?I1 1!&'&&& 1I+ &&'&&& %I% 1&'&&& 1I+ 1!&&'&&&
,I1, 1-&'&&& +I% 1,&'&&&
11I1 -&'&&& ?I! 1&&'&&&
11I! +5'&&& 1I+ -&&'&&& 5I1- !&&'&&& 1I+ 15&&'&&&
O 1!I5 1&'&&& -I1! !1&'&&& 1!I1! 55&'&&& !I!1 -&'&&& 1!I!& %,&'&&& +I%1 1,&'&&&
$ssumption 1. Anterest at ?= is to *e allowed on the *eginning capital of each partner. Jalaries of 1,5'&&&K 11&'&&&K1+&'&&&K1-5'&&& to fernan' wenzcarlo'(ernard and ramil. Residual income is to *e divided in the ratio if !4%414, to (ernard' wenzcarlo' fernan' ramil. ;rot for the year is 11,&'&&&.
/otal share of wenzcarlo in the prot is
?. /otal share of (ernard and Ramil in the prot are PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP
1&.Ending *alance of (ernard PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP
11.Jhare of 9ernan in the remaining income PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP
1!./otal capital of 0enzcarlo and fernan after allocation of prot PPPPPPPPPPPPPPPPPPPPPPPPPP
$ssumption !. Anterest at 1!= is to *e allowed on the *eginning capital of each partner. Jalaries of 115'&&& and !&&'&&& to fernan and wenzcarlo respectively. (onus of 15= and !&= after
interest and salaries to Ramil and (ernard. Residual incomeloss" is to *e divided equally among the partners. Fet loss for the year is 1,5&'&&&.
1%.(onus receive *y Ramil is PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP
1,./otal share of (ernard in the loss PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP
15./otal capital *alance of 9ernan and Ramil after allocation PPPPPPPPPPPPPPPPPPPP
You cannot cross the ocean unless you>re not afraid to lose sight of the shore.
;repared *y4
Junior Philippine Institute of Accountants
Baliwag Polytechnic College
Baliwag, Bulacan
Basic Accounting %efresher Part 1
Fame4 Jection4
Read carefully and answer *y heart. 0rite the correct answer i n the space provided.
&'1 I(entify the accounting term that is )est (escri)e( )y the following
sentences*
1. /he *usiness is regarded as having a separate and distinct personality from its owner.
!. Resources or things owned *y a *usiness.
%. $ccountants generally choose a method or procedure that will yield a lower amount of income and asset value.
,. /his principle states that the acquired asset should *e recorded at their actual or historical value.
5. /he concept requiring that at least two accounts are aCected *y each *usiness transaction.
-. /he standard *asic accounting equation.
+. 9inancial reporting is concerned only with information that is signicant enough to aCect valuations and decisions.
. nder this concept' money is used as the unit of measure in preparing the various nancial reports of the company.
?. $ de*t that is secured *y a collateral in the form of *usiness property such as land' *uildings and equipment.
1&./he report that shows the worth of a *usiness in terms of assets' de*ts and the investment of the owner.
&'+ &%E #R #A-"E*
1. $ccounting is often descri*ed as the Slanguage of *usinessT *ecause it is the medium of communication *etween a *usiness rm and other parties. !. 9riar 7uca ;acioli was the author of the rst Dnown *ooD of dou*le entry
*ooDDeeping'
%. $ccounting deals primarily with the step *y step accomplishments of the accounting cycle.
,. Anternal nancial statement users are those who are directly involved in the *usiness organization.
5. $ccounting provides a vital source in supplying information to decision maDers who will maDe decisions for the conduct of *usiness and its various economic activities.
-. $ manufacturing *usiness is engaged in the processing of products that are intended for sale.
+. /he 9RJ) is the *ody that formulates the accounting standards in the ;hilippines.
. /he three elements that report the nancial status of an entity are assets' lia*ilities and income.
?. /he relationship among assets' lia*ilities and equity is expressed *y the accounting equation4 assetsL lia*ilities U equity
1&.$ny two elements of the *asic accounting equation may *e rearranged alge*raically to determine the peso amount of the missing element.
&'. Arrange the following steps in the accounting cycle*
J/E; V
PPPPPPP/rial *alance preparation.
PPPPPPP;reparation of 1& column worDsheet.
PPPPPPP;osting :ournal entries to the ledger.
PPPPPPPGournalizing and posting ad:usting entries.
PPPPPPP;reparing nancial statements.
PPPPPPP(alancing the accounts and preparing a post closing trial *alance'
PPPPPPP$nalyzing the source documents.
PPPPPPPGournalizing and posting reversing entries.
PPPPPPPGournalizing and posting closing entries.
Every accomplishment starts with a decision to try.
;repared *y4
$izelle )hesca /im*ang 8 Q;F$
$perations8 $nswer Dey 1. ). !. (. %. (. ,. $. 5. (. -. ,!!'!&"K ,-'+-!.5&" +. !,-',1+.5&K ?!'%-!.5& . !1'%&& ?. --'-&& 1&.1!?1'!&& 11.1'1&& 1!.!%!&',&& 1%.& 1,.%,'!5&" 15.1%-'5&&
#ormation W $nswer 6ey 1. ).
!. 2. %. 2. ,. ). 5. $.
-. $. -&'&&& (. ,&'&&& ). 115'&&& +. $. !'%1& (. 1,'155 ). -'-&& . 55'&&&
?. %+&'&&& 1&.-5'&&&
Basic Accounting &heories
$nswers4 &'1 1. (usiness entity !. $ssets %. )onservatism ,. )ost principle 5. 2ou*le entry *ooDDeeping -. $L7U#E +. 3ateriality . 3onetary unit ?. 3ortgage paya*le 1&.(alance sheet $nswers! &'+ 1. / !./ %./ ,./ 5./ -./ +.9 .9 ?./ 1&./ $nswers4 &'. , 5 % + -? 1 1& !
Junior Philippine Institute of Accountants Baliwag Polytechnic College
Baliwag, Bulacan A/E %e0iewer o* 1
Multiple Choice - Theories (Encircle the correct answer)
1. /he legal characteristic of a partnership where*y each partner is an agent of the partnership and is a*le to *ind the partnership to contracts within the normal scope of the partnership *usiness is Dnown as4
a. unlimited lia*ility *. mutual contri*ution
c. co8ownership d. mutual agency
!. /he dissolution of a *usiness partnership *y 1" selling noncash assets for cash and allocating the gain or loss according to partnersX income8and8loss ratio !" paying lia*ilities %" distri*uting remaining cash to partners *ased on capital *alances is called
partnership . a. Realization *. 7iquidation
c. 9ormation d. Ancorporation %. 0hich of the following statements is correct
a. Jalaries to partners and interest on partnersX capital are expenses of the partnership. *. Jalaries to partners are expenses of the partnership *ut interest on partnersX capital is not. c. Anterest on partnersX capital is an expense of the partnership *ut salaries are not.
d. Feither salaries to partners nor interest on partnersX capital are expenses of the partnership. ,. /he admission of a partner *y purchase of an existing partnerXs interest in the rm4
a. increases total partnership assets. *. increases total partnership capital.
c. is a personal transaction *etween an existing partner and the new partner d. can result in a *onus to the other partners.
5. /he admission of a partner *y an investment of assets in a partnership4 a. will not aCect the net assets of the partnership.
*. increases total partnership capital.
c. is a personal transaction *etween an existing partner and the new partner. d. does not require an entry in the partnership records.
-. 0hen a new partnerXs capital credit is less than hisIher investment in the rm' the diCerence is allocated to the old partners4 a. equally.
*. on the *asis of their income ratios.
c. on the *asis of their original investments. d. in proportion to their capital *alances .
+. /he *onus that results when a new partnerXs capital credit is greater than hisIher investment in the rm is recorded *y de*iting4 a. *onus expense.
*. the existing partnersX capital accounts. c. the existing partnersX drawing accounts. d. the new partnerXs capital account.
. /he rst step in the liquidation of a partnership is to4 a. allocate gainIloss on realization to the partners. *. distri*ute remaining cash to partners.
c. pay partnership lia*ilities.
d. sell noncash assets and recognize a gain or loss on realization.
?. 0hen a partnership is liquidated' the remaining cash should *e distri*uted to partners4 a. equally..
*. on the *asis of their income8sharing ratios. c. on the *asis of their capital *alances d. on the *asis of their original investments.
1&. Af a partner with a capital deciency is una*le to pay the amount owed to the partnership' the deciency is allocated to the partners with credit *alances4
a. equally.
*. on the *asis of their income ratios. c. on the *asis of their capital *alances d. on the *asis of their original investments.
II* I(enti2cation 34rite your answers on the space pro0i(e(5 316 pts5
PPPPPPPPPPPPPP1. #ne who does not taDe active part in the *usiness of the partnership though may *e Dnown as a partner. PPPPPPPPPPPPPP!. At is the amount of capital or equity transferred *y one partner to another partner.
PPPPPPPPPPPPPP%. At is the total capital of the partnership after considering the capital credits given to each of the partners. PPPPPPPPPPPPPP,. At represents the portion of a partner>s interest which should remain availa*le to a*sor* possi*le future losses. PPPPPPPPPPPPPP5. /his program is prepared at the start of the liquidation process which will help the partners to pro:ect when they can
expect to *e included in the cash distri*ution.
PPPPPPPPPPPPPP-. /he conversion of non8cash assets into cash.
PPPPPPPPPPPPPP+. /he excess of a partner>s share in losses over the partner>s capital credit *alance.
PPPPPPPPPPPPPP. #ne who does not taDe active part in the *usiness of the partnership and is not Dnown as a partner. PPPPPPPPPPPPPP?. #ne who is actually not a partner *ut who represents himself as one.
PPPPPPPPPPPPPP1&. $ partnership that has complied with all the legal requirements for its esta*lishment.
II* "traight Pro)lem 7 "how your solution in a separate worksheet 316 pts5
/he condensed *alance sheet of R)$ ;artnership :ust *efore the liquidation is shown *elow4 ;oDemon ;artnership
Jtatement of 9inancial ;osition 2ecem*er %1' !&1%
$ssets 7ia*ilitiesand)apital
#ther$ssets !--'&&& 3eow'7oan -'&&& Qictini' 7oan 1&'&&& ;iDachu' )apital 1!&'&&& 3eow')apital 5&'&&& Qictini' )apital ?&'&&& /otal $ssets ; %5&'&&& /otal 7ia*ilities and )apital ; %5&'&&&
/he partners shared prot and loss in the ratio of ,4,4!' respectively. /he other assets were sold for ; 11&'&&&. /he partner with capital deciency is insolvent.
Required4
1. ;repare a statement of liquidation.
!. ;repare :ournal entries to record the liquidation process.
I8* Multiple Choice ' Pro)lems 3Encircle the correct answer' show your solution in a separate worksheet5
1. #n 3arch 1' !&1%' ;; and decide to com*ine their *usiness and form a partnership. /heir *alance sheets on 3arch 1' *efore ad:ustments' showed the following4
/hey agreed to have the following items recorded in their *ooDs4 1. ;rovide != allowance for dou*tful accounts.
!. ;;>s furniture and xtures should *e ;%1'&&&' while >s oBce equipment is under8depreciated *y ;!5&.
%. Rent Expense incurred previously *y ;; was not yet recorded amounting to ;1'&&&' while salary expense incurred *y was not also recorded amounting to ;&&.
,. /he fair marDet value of inventory amounted to4 9or ;;ZZZZZZZZZZZZZZZZZZZ..;!?'5&& 9or ZZZZZZZZZZZZZZZZZZZ.;!1'&&& )ompute for the net de*it" credit ad:ustment for ;; and 4
;;
a" !'+& !'!& *" !'+&" !'!&" c" +&" 1& d" +& 1&"
!. /he same information in num*er 1' compute the total lia*ilities after formation. a" -1'?5&
*" -%'+5& c" -5'55& d" -%'?5&
%. /he same information in num*er 1' compute for the total assets after formation. a" 15+'?5
*" 15-'+5 c" 1-&'+-5
d" 15!'?5
,. Yaya 2u* and $lden are considering forming a partnership where*y prots will *e allocated through the use of salaries and *onuses. (onuses will *e 1& = of net income after total salaries and *onuses. Yaya 2u* will receive a salary of ;%&'&&& and a *onus. $lden has the option of receiving a salary of ;,&'&&& and a 1&= *onus or simply receiving salary of ;5!'&&&. (oth partners will receive the same amount of *onus.
2etermine the level of net income that would *e necessary so that $lden would *e indiCerent to the prot sharing option selected. a" !,&'&&& *" %&&'&&& c" ?,'&&& d" %%,'&&& e"
5. /he partnership agreement of $nne and Qhong provides that interest at 1&= per year is to *e credited to each partner on the *asis of weighted8average capital *alances. $ summary of Qhong capital for the year ended 2ecem*er %1' !&1% is as follows4
f" (alance' Ganuary 1ZZZZZZZZZZZZZZZZ; ,!&'&&& g" $dditional investment' Guly 1ZZZZZZZZZZZZ 1!&'&&& h" 0ithdrawal' $ugust 1ZZZZZZZZZZZZZZZ. ,5'&&&" i" (alance' 2ecem*er %1ZZZZZZZZZZZZZZ.. ,?5'&&&
:" 0hat amount of interest should *e credited to Qhong>s capital account for !&1% D"
a" ,5'+,& *" ,?'5&& c" ,-'1!5 d" 51'+5&
-. Fidora' /idora and Asadora are partners with average capital *alances during !&1%of ;,+!'5&&' ;!%'-5& and ;1-!'%5&' respectively. /he partners receive 1&= interest on their average capital *alancesK after deducting salaries of ;1!!'%!5 to Fidora and ;!'-!5 to Asadora' the residual prots or loss is divided equally. An !&1%' the partnership had a net loss of ;1!5'-!, *efore the interest and salaries to partners.
l"
m" (y what amount should Fidora>s and Asadora>s capital account change W increase Idecrease"
n" $$ ))
a" %&'!-+ ,&',," *" !?',+- 1+'5%-c" ,&',," %1'!%5 d" !'%5 %!',5 o"
p"
+. /he same information in num*er -' except the partnership had a loss of ;1!5'-!, after the interest and salaries to partners' *y what amount should /idora>s capital account change W increase I decrease".
q" a" 115',,%" *" !%'-5 c" ,1'+5" d" 1'&1&" r"
. #n Gune %&' !&1%'the *alance sheet of 9airy /ail 3arDeting' a partnership' is summarized as follows4 s" Jundry $ssetsZZZZZ.; 15&'&&&
t" Fatsu' )apitalZZZZZZ ?&'&&& u" 7ucy' )apitalZZZZZZ -&'&&&
v" Fatsu and 7ucy share prot and losses at a -&4,& ratio' respectively. /hey agreed to taDe in @ray as a new partner' who purchases 1I interest of Fatsu and 7ucy for ;!5'&&&. 0hat is the amount of @ray>s capital to *e taDen up in the partnership *ooDs if *ooD value method is used
w" a" 1!'5&& *" 1'+5& c" !5'&&& d" %1'!5& x"
?. 2aimler contri*uted ; !,'&&& and Ro*in contri*uted ;,'&&& to form partnership' and they agreed to share prots in the ratio of their original capital contri*utions. 2uring the rst year of operations' they made a prot of ; 1-'!?&K 2aimler withdrew ;5'&5& and Ro*in ;'&&&. $t the start of the following year' they agreed to admit 3ichael into the partnership. e was to receive a one8fourth interest in the capital and prots upon payment of ;%&'&&& to 2aimler and Ro*in' whose capital accounts were to *e reduced *y transfers to 3ichael>s capital account.
y" ow much gain was realized *y 2aimler and Ro*in z" a." 11'1?& *." 1!'1?& c." 1&'1?& d." & aa"
a*"
ac" /he partner>s share prots and losses as follows 4 ((' !&=K ))' %&=K 22' 5&=' )) is retiring from the partnership and the partners have agreed that Sother assetsT should *e ad:usted to their fair values of ;-&&'&&& at 2ecem*er %1'!&1%' they further agree that )) will receive ;!,,'&&& cash for his partnership interest exclusive of the loan' which is to *e paid in full' and that no goodwill implied *y ))>s payment will *e recorded.
ad" ow much *onus did )) received ae" a." & *." 1!'&&& c." 1,'&&& d." 1-'&&& af"
11. $fter ))>s retirement ' the capital *alances of (( and 22' respectively' will *e4 ag"
a." 11-'&&& and !,&'&&& *." 1&1'+1, and !5,'!-c." 1&&'&&& and !&&'&&& d." +%'1,% and 1!'5+
ah" ai"
1!. 2uterte' 3iriam and 3ar' partners to a rm ' have capital *alances of ;11'!&&' ;1%'&&&' and ;5'&&' respectively' and share prots in the ratio of ,4!41. ;repare a schedule showing how availa*le cash will *e given to the partners as it *ecomes availa*le. 0ho among the partners shall *e paid rst with an availa*le cash of ;1',&&
a:" a." 3iriam *." Fo one c." 3ar d." 2uterte e."
1%. $s of 2ecem*er %1' !&&' the *ooDs of Fight Raid $ssassin ;artnership showed )apital *alances of4 /atsumi ;,&'&&&K $Dame' ;!5'&&&K 3ine' ;5'&&&. /he partners> prot and loss ratio was %4!41' respectively. /he partners decided to liquidate and they sold all non8cash assets for ;%+'&&&. $fter settlement of all lia*ilities amounting to ;1!'&&&' they still have cash of ;!'&&& left for distri*ution. $ssuming that any capital deciency is uncollecti*le' the share of /atsumi in the distri*ution of the ;!'&&& cash would *e4
f." a." 1+'&& *." 1'&&& c." 1?'&&& d." 1+'&&& g."
1,. /he *alance sheet of the partnership of ;recious' Ganet and 3ichelle who share prot and losses in the respective ratio of 54%4!' follows4
h."
i." /he partners agreed to liquidate the partnership *y installments. Ammediately' there was a realization of ;1&&'&&& cash from selling other assets with *ooDs value of ;15&'&&&. #f the cash availa*le' the priority is the payment of the lia*ilities and the *alance is to *e distri*uted to the partners.
:." ow should the remaining cash *e distri*uted to ;recious' Ganet and 3ichelle' respectively D."
a." ;5&'&&&K %&'&&& and !&'&&& *." ;,&'&&&K !,'&&& and 1-'&&& c." ;8&8K %1'&&& and ,?'&&& d." ;8&8K ,'&&& and %!'&&& l."
15. sing the same information in num*er 1,' how much cash should 3ichelle receive assuming the remaining assets were sold for ;1,&'&&& m." a." & *." 5&'&&& c." -&'&&& d." ,&'&&& n." o." p."
q."
PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP PPPPPPPPPP
r." @ood lucD sa *attery test niyo. Jome pro*lems are really long and complicated so when you encounter things liDe that' taDe this a piece of advice. You should sDip it rst then proceed to simpler pro*lems. Remind yourself that whether it>s easy or diBcult' it only counts as one point on your exam or *attery test except for the domino pro*lems. 2on>t waste time. 7earn to maximize it.
s."
t." ;.J. Jcan rst the whole test paper *efore you proceed answering pro*lems. 3alay niyo nasa dulo yung mga madadaling pro*lems di *a. uwag malungDot Dung saDali mang walang luma*as sa mga reviewer na naprovide namin. $t least napaghandaan at nasanay yung analytical sDills nyo sa i*a>t i*ang pro*lems. 6aya niyo yan. 3agpray lagi. @od *less you (J$ !$. A>ll try to provide more reviewers sa mga susunod na araw. 6apit lang. 0ag susuDo.
u." v." w*5 88888P #$% ACA9" 38PA5 x." y." z." aa." a*." ac." ad." ae." af." ag." ah."
ai."6ey $nswer 9or $E Reviewer Fo. 1 a:."A. 3ultiple )hoice 8 /heories
aD." 1 al."d am." ! an." * ao." % ap." d aq." , ar." c as." 5 at." * au." -av." * aw." + ax." * ay." az." d *a." ? **." c *c." 1& *d." * *e." AA. Adentication
*f."1 *g." Jilent ;artner
*h."
! *i."(onus
*l.", *m." Restricted Anterest *n."
5 *o." )ash ;riority ;rogram
*p."
- *q." realization
*r."
+ *s." capital deciency
*t."
*u." 2ormant partner
*v."
? *w." Fominal partner I partner *y estoppel
*x."
1& *y." de :ure partnership
*z." AAA.Jtraight ;ro*lems ca." c*." cc." cd." ce." cf." cg." ch." ci." c:." cD." cl." cm." cn." co." ;oDem on ;artne rship cp." cq." cr." cs." ct." cu." cv." cw." cx." cy." Jtatement of
7iquidation cz." da." d*." dc." dd." de." df." dg." dh." 2ece m*er %1' !&1% di." d:." dD." dl." dm." dn." do." dp." dq." dr." ds." dt." du." dv." dw." dx." dy." dz." ) ea." # e*." $cc ec." 3 ed." Q ee." ;iD ef." 3 eg." Qi
eh." (alances *efore realization
ei." e:." eD." el." em." en." eo." ep."
eq." Jales of $ssets and distri*ution of losses
er." es."
et." eu." ev." ew." ex." ey."
ez." (alances fa." f*." fc." fd." fe." C." fg." fh." ." f:." ;ayment of 7ia*ilities fD." H." fm." fn." fo." fp." fq." fr." fs." (alances ft." fu." fv." fw." fx." fy." fz." ga." g*."
gc." #Cset of 3eow' loan
gd." ge." gf." gg." gh." gi." g:." gD." gl." (alances gm." gn." go." gp." gq." gr." gs." gt." gu." gv." $ddtXl loss for ;iDachu < Qictini gw." gx." gy." gz." ha." h*." hc." hd." he." (alances hf." hg." hh." hi." h:." hD." hl." hm." hn." ho." )ash distri*uti on hp." hq." hr." hs." ht." hu." hv." hw." hx." hy." (alances hz."
ia." i*." ic." id." ie." if." ig." ih."
ii."
i:." iD." il." im." in." io." ip." iq." ir." is." it."
)
iu." iv." 11
&' && & ix." iy." iz." ;i Da ch u' )a pit al :a." :*." :c." :d." :e." 3 eo w' )a pit al :f." :g." :h." :i." ::." Qi cti ni' )a pit al :D." :l." :m." :n." :o." :p." :q." :r." :s." $ccounts ;aya*le :t." +, '& && :u." :v." :w." :x." )a sh :y." :z." Da." D*." Dc." Dd." De." Df." Dg." 3 Dh." Di." -' && & D:." DD." Dl." Dm." 3eow' )a pit al Dn." Do." Dp." Dq." Dr." Ds." Dt." Du." Dv." ;iDachu' )apital Dw." ,' !-+ Dx."
Dy." Dz." Qictini' )apital
la." !' 1% % l*." lc." ld." le." 3 eo w' )a pit al lf." lg." lh." li." l:." lD." ll." lm." ln." Q lo." lp." 1& '& && lq." lr." ls." ;iDachu' )apital lt." 5% '% %% lu." lv." lw." Qictini' )apital lx." 5- '--+ ly." lz." ma." m*." )ash mc." md."
me." mf." mg." mh."
mi." 6ey $nswer 9or $E Reviewer Fo. 1 )ontinuation"
m:." A. 3ultiple )hoice 8 ;ro*lems mD." 1 ml." c mm." mn." ! mo." c mp." mq." % mr." a ms." mt." , mu." d mv." mw." 5 mx." c my." mz." -na." a n*." nc." + nd." d ne." nf." ng." * nh." ni."? n:." a nD." nl."1& nm." c nn." no." 11 np." a nq." nr." 1! ns." a nt." nu." 1% nv." a nw." nx." 1, ny." c nz." oa." 15 o*." d oc." od."
