Set C

Fundamentals of Accounting P2
(ABM 4)

Quiz # 1

Name:_________________________________ Program:_____________________ Date:________

I. Solve the following problems.

A. Copy and Cat both owners of an existing single proprietorship business. They agreed to combine their business into a
partnership named CopyCat Partnership. They agreed to start with a total capitalization of P 400,000.00 to be
contributed equally. They also agreed to the following valuation of their businesses noncash assets.
a. Their receivables are 95% collectibles.
b. The inventory has realizable value of P75,000.00
c. The equipment has fair value of P75,000.00
They will invest additional cash if needed to complete their agreed contribution. The trial balance of the single proprietorship
business is as follows:

Copy Business: Cat Business:

Debit Credit Debit Credit
Cash 75,000.00   Cash 75,000.00  
Accounts Receivable 95,000.00   Accounts Receivable 60,000.00  
Inventory 85,000.00   Store Equipment 85,000.00  
Accounts Payable   90,000.00 Accum. Depreciation   30,000.00
Copy, Capital   165,000.00 Copy, Capital   190,000.00
255,000.00 255,000.00 220,000.00 220,000.00

Prepare CopyCat Partnership Trial Balance after formation. (15 points)

B. Using the following data, computes for the amount of profits distributed for each partner of Think Ahead Partnership.
Profits for the year 2019 amounted to P 150,000.00. Show your solution.
MR. THINK MS. AHEAD
Original Capital Contributions (2018) 60,000.00 88,000.00
Capital Balances
Capital Balance, January 1, 2019 45,000.00 65,000.00
Addt’l Investment, March 30   18,000.00
Addt’l Investment, May 28   14,000.00
Addt’l Investment, June 28 16,000.00  
Withdrawal, August 10 15,000.00 10,000.00
Withdrawal, September 30   25,000.00
Addt’l Investment, October 30 35,000.00 15,000.00
Withdrawal,November 30 15,000.00 25,000.00
Capital Balance, December 31, 2019 66,000.00 52,000.00

1. If partners profit is divided equally (2points)

2. If the partners agree to divide the profit with 65% for Mr. Think and 35% for Ms. Ahead. (2points)
3. If the partners agree to divide the profit using their original capital contribution. (2points)
4. If the partners agree to divide the profit using their beginning capital balances. (2points)
5. If the partners agree to divide the profit using their ending capital balances. (2points)
6. If the partners agree to divide the profit using their current year’s average capital balances. (4 points)
7. If the partners agree to divide the profit based on weighted average capital balances. (20 points)
8. If the partners agree to divide the profits with the following considerations:
a. Weighted average capital balance are entitled to a 12% interest per year (2points)
b. Cash balance to be distributed 65% for Mr. Think and 35% for Ms. Ahead. (2points)