Set B

Fundamentals of Accounting P2
(ABM 4)

Quiz # 1

Name:_________________________________ Program:_____________________ Date:________

I. Solve the following problems.

A. Kilua and Gon both owners of an existing single proprietorship business. They agreed to combine their business into a
partnership named KiluaGon Partnership. They agreed to start with a total capitalization of P 300,000.00 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 P60,000.00
c. The equipment has fair value of P50,000.00
They will invest additional cash if needed to complete their agreed contribution. The trial balance of the single proprietorship
business is as follows:

Kilua Business: Gon Business:

Debit Credit Debit Credit
Cash 58,000.00 Cash 25,000.00  
Accounts Receivable 65,000.00 Accounts Receivable 45,000.00  
Inventory 50,000.00 Store Equipment 65,000.00  
Accounts Payable 88,000.00 Accum. Depreciation   30,000.00
Kilua, Capital 85,000.00 Gon, Capital   105,000.00
173,000.00 173,000.00 135,000.00 135,000.00

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

B. Using the following data, computes for the amount of profits distributed for each partner of Por Tea Partnership. Profits
for the year 2019 amounted to P 250,000.00. Show your solution.
MR. POR MS. TEA
Original Capital Contributions (2018) 60,000.00 88,000.00
Capital Balances
Capital Balance, January 1, 2019 50,000.00 60,000.00
Addt’l Investment, March 30   20,000.00
Addt’l Investment, May 28   15,000.00
Addt’l Investment, June 28 85,000.00  
Withdrawal, August 10 25,000.00 15,000.00
Withdrawal, September 30   10,000.00
Addt’l Investment, October 30 35,000.00 65,000.00
Withdrawal,November 30 25,000.00 10,000.00
Capital Balance, December 31, 2019 120,000.00 125,000.00

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

2. If the partners agree to divide the profit with 65% for Mr. Por and 35% for Ms. Tea. (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. Por and 35% for Ms. Tea. (2points)