COLEGIO DE DAGUPAN

Arellano Street, Dagupan City

School of Business and Accountancy

FUNDAMENTALS OF ACCOUNTING 2
Summer, AY 2017-2018
Quiz No. 1

PROBLEM 1
Sofia has successfully operated a store for a number of years. She wishes to expand the business, but to
do so she needs additional capital. She therefore invited three friends, Adrian, Venus and Eddie and it
was agreed that the partnership be called SAVE Supermarket subject to the following conditions:
a. Adrian will invest furniture and equipment costing P200,000, book value of P175,000 with a
market value equal to half the cost.
b. Venus will invest a delivery truck with a current market price of P500,000 but with a P200,000
mortgage attached to it. It was agreed that the partnership will assume the mortgage.
c. Sofia and Eddie will invest their net assets as follows:

Sofia Eddie
Cash P11,675 P15,250
Accounts Receivable 18,650 17,275
Allowance for Bad Debts 2,750 1,500
Merchandise Inventory 27,200 35,250
Store Equipment 43,500 15,880
Accumulated Depreciation 1,700 750
Furniture and Fixtures 25,500 12,300
Accumulated Depreciation 2,500 350
Accounts Payable 15,000 6,275

d. The partners with lower contributions agree to make additional cash investments so that each
partner will have an equal share in the net assets and profits.
Requirements:
a. List down the adjusted invested of each partner.
b. Who would make the additional cash investment and at what amount?
c. Adjust and close the books of Sophie and Eddie.
d. Entries in the partnership book.

PROBLEM 2

CC Partnership began operations on June 1, 2014. On that date, CY and CR have capital credits of
P175,000 and P240,000, respectively. The partnership has the following profit-sharing plan:

a.) 10% interest on partners’ capital balances at the end of the year
b.) P60,000 and P75,000 annual salaries for CY and CR, respectively.
c.) Remaining profit will be divided to CY and CR on a 3:2 ratio, respectively.

During the year, CY invested P150,000 worth of merchandise and withdrew P40,000 cash, while CR
invested P120,000 cash. The partnership earned a profit of P266,375 during the year.

How much is the share in net income of CY and CR at the end of 2014? Also, how much is the capital
balances of the partners at the end of the year?

---END ---

parcor/q1/summer17/scs Page 1