Partnership Problems

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Partnership Problems
Accountancy (La Consolacion College)
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1. On March 1, 2013, Santos and Pablo formed a partnership with each contributing the
following assets
Santos Pablo
Cash P30,000 P70,000
Machinery and equipment 25,000 75,000
Building - 225,000
Furniture and fixtures 10,000 -
The building is subject to a mortgage loan of P80, 000which is to be assumed by fee

partnership. The partnership provides that Santos and Pablo share profits and losses 30%and
70%, respectively. On March l, 2013 the balance in Pablo's capital account should be:
a. P290, 000
b. P305,000
c. P314,000
d. P370,000
2. On March 1, 2013, Eva and Helen decides to combine their businesses and form a
partnership. Statement of financial position on March 1 , before adjustments, showed
following:
Eva Helen
Cash P 9,000 P 3,750
Accounts receivable 18,500 13,500
Inventories 30,000 19,500
Furniture and fixtures (net) 30,000 9,000
Office equipment (net) 11,500 2,750
Prepaid expenses 6,375 3,000
Total P105, 375 P51,500
No. 2 — Continued
They agreed to provide 3% for doubtful accounts receivable, and also agree that Helen's
furniture and fixture are underdepreciated by P900.
If each partner's share in equity is to be equal to the net assets invested, the capital
accounts of Eva and Helen would be:
a. P104,820 and P50,195, respectively
b. P59,070 and P32,195, respectively
c. P58,320 and P32,945, respectively

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d. P58,170 and P33,095, respectively
3. On July l, 2013, Monuz and Pardo form a partnership, agreeing to share profits and losses in
the ratio of 4:6, respectively. Monuz contributed a parcel of land that cost him P25, 000.
Pardo contributed P50, 000 cash. The land was sold for P50, 000 on July 1, 2013 four hours
after formation of the partnership. How much should be recorded in Monuz capital account
on formation of the partnership?
a. P10,000
b. P20,000
c. P25,000
d. P50,000
4. The business assets and liabilities of John and Paul appear below:
John Paul
Cash P11,000 P22,354
Land 603,000 -
Building - 428,267
Furniture and fixtures 50,345 34,789
Other Assets 2,000 3,600
Total P1,020,916 P1,317,002
Accounts payable 178,940 243,650

Notes payable 200,000 345,000
John, capital 641,976 -
Paul, capital - 728,352
Total P1,020,916 P1,317,002
No. 4 — Continued
John and Paul agreed to form a partnership contributing their respective assets and equities
subject to the following adjustments:
a. Accounts receivable of P20,000 in John’s books and P35,000 in Paul’s are
uncollectible.
b. Inventories of P5,500 and P6,700 are worthless in John’s and Paul’s respective books.
c. Other assets of P2,000 and P3,600 in John’s and Paul’s respective books are to be
written off.
The capital account of the partners after the adjustments will be:
a. John’s P614,476
Paul’s 683,052
b. John’s P615,942

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Paul’s 717,894
c. John’s P649,876
Paul’s 712,345
d. John’s P613,576
Paul’s 683,350
5. Red, White, and Blue form a partnership on May l, 2013. They agree that Red will contribute
office equipment with a total fair value of P40,000; White will contribute delivery equipment
with a fair value of P80,000; and Blue will contribute cash. If Blue wants a one third interest
in the capital and profits, he should contribute cash of:
a. P 40,000
b. P120,000
c. P60,000
d. P180,000
6. The partnership of Perez and Reyes was formed on March 31, 2013. On this date, Perez
invested P50,000 cash and office equipment valued at P30,000. Reyes invested P70,000 cash,
merchandise valued at P110,000, and furniture valued at P100,000, subject to a notes payable
of P50,000 (which the partnership assumes). The partnership provides that Perez and Reyes
share profits and losses 25: 75, respectively. The agreement further provides that the partners
should initially have, an equal interest in the partnership capital. Under the the bonus method,
what is the total capital of the partners after the formation?
No. 6 — Continued
Bonus
a. P310,000
b. P360,000
c. P300,000
d. P350,000
7. Aldo, Bert, and Chris formed a partnership on April 30, with the following assets, measured
at their fair values, contributed by each partner:
Aldo Bert Chris
Cash P10,000 P12,000 P30,000
Delivery trucks 150,000 28,000 -
Computers 8,500 5,100 -
Office furniture 3,500 2,500
Totals P168,500 P48,600 P32,500
Although Chris has contributed the most cash to the partnership, he did not have the full
amount of P30,000 available and was forced to borrow P20,000. The delivery truck

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contributed by Aldo has a mortgage of P90,000 and the partnership is to assume

responsibility for the loan. The partners agreed to equalize their interest. Cash settlement
among the partners are to be made outside the partnership. Using the Bonus Method:
a. Bert and Chris should pay Aldo, P4,600 and P20,700 respectively.
b. Aldo should pay Bert and Chris, P25,300.
c. Bert should pay Aldo, P25,300 and Chris, P20,700.
d. Chris should pay Aldo, P25,300 and Bert, P4,600.
8. Cong and Dong have just formed a partnership. Cong contributed cash of P126,000 and
computer equipment that cost P54,000. The computer had been used in his sole
proprietorship and had been depreciated to P24,000. The fair value of the equipment is
P36,000. Cong also contributed a note payable of P12,000 to be assumed by the partnership.
Cong is to have 60% interest in the partnership. Dong contributed only P90,000 cash.
Cong should make an additional investment (withdrawal) of:
a. P96,000
b. 84,000
c. (P76,800)
d. (P15,000)
9. On March l, 2013, Jose and Kiko decides to combine their businesses to form a partnership.
Statement of financial position on March I before the formation, showed the following:
Jose Kiko
Cash P9,000 P3,750
Furniture and fixture (net) 30,000 9,000
Office equipment (net) 11,500 2,750
Prepaid expenses 6,375 3,000
Total P105, 375 P51,500
Accounts payable P45,750 P18,000

Capital 59,625 33,500
Total P105,375 P51,500
They agreed to following adjustments before the formation:
a. Provide 2% allowance for doubtful accounts,
b. Jose’s furniture should be valued at P31,000, while Kiko's office equipment is
underdepreciated by P250.

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c. Rent expense incurred previously by Jose was not yet recorded amounting to P 1,000,
while salary expense incurred by Kiko was not also recorded amounting to P800.
d. The fair value of inventories amounted to P29,500 for Jose and P21,000 for Kiko.
The net (debit) credit adjustment to partner's capital accounts are:
Jose Kiko
a. (P2,870) (P2,820)
b. P1,870 P2,820
c. P 870 (P 180)
d. (P 870) P 180
10. On June l, 2013, May and Nora formed a partnership. May is to invest assets at fair value
which are yet to be agreed upon. She is to transfer her liabilities and is to contribute sufficient
cash to bring her total capital to P210,000 which is 70% of the total capital of the partnership.
11 — Continued
Details regarding the book values of May’s business assets and liabilities and their
corresponding valuations are:
Book Agreed
values valuations
Accounts receivable P58,000 P58,000
Allowance for doubtful accounts 4,200 5,000
Merchandise inventory 98,400 107,000
Store equipment 32,000 32,000
Accumulated Depreciation – Store equipment 19,000 16,400
Office equipment 27,000 27,000
Accumulated depreciation – Office equipment 14,200 8,600
Accounts payable 56,000 56,000
Nora agrees to invest cash of P42,000 and merchandise valued at current market price. The
value of the merchandise to be invested by Nora and the cash to be invested by May are:
a. P 90,000 and P 62,000 respectively
b. P252,000 and P138,000 respectively
c. P 48,000 and P138,000 respectively
d. P 48,000 and P 62,000 respectively
11. The capital accounts of the partnership of Nakpil, Ortiz, and Perez on June l, 2013 are
presented below with their respective profit and loss ratios:
Nakpil P139,200 1/2
Ortiz 208,800 1/3
Perez 96,000 1/6

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On June l, 2013, Quizon is admitted to the partnership when he purchased, for P 132,000, a
proportionate interest from Nakpil and Ortiz in the net assets and profits of the partnership. As a
result of a transaction, Quizon acquired a one-fifth interest in the net assets and profits of the
firm. Assuming that implied goodwill is not to be recorded, what is the combined gain realized
by Nakpil and Ortiz upon the sale of a portion of their interest in the partnership to Quizon?
a. P 0
b. P43,200
c. 62,400
d. P82,000
12. Moonbits partnership had a net income of P8,000.00 for the month ended September 30,
2013.
Sunshine purchased an interest in the Moonbits partnership of Liz and Dick by paying Liz
P32,000 for half of her capital and half of her 50% percent profit sharing interest on October
l, 2013. At this time Liz capital balance was P24,000 and Dick capital balance was P56,000.
Liz should receive a debit to her capital account of:
a. P12,000
b. P20,000
c. 350,000
d. 200,000
13. Partners Andy, Boy and Ken sharing profit and loss based on 4:3:2 ratio have the following
condensed statement of financial position:
Total assets P1,880,000
Liabilities P 480,000
Andy, capital 620,000
Boy, capital 400,000
Ken, capital 380,000
Total liabilities and capital P1,880,000
Dondon will be admitted as a new partner for 20% interest after he pays the three partners
with a minimum of 10%. Thus, the old partner will have to transfer to Dondon 20% of their
interest. How much should old partners transfer to Dondon?
a. P376,000
b. P280,000
c. P350,000
d. P200,000
14. Partners Alba, Basco, and Castro share profits and losses 50:30:20, respectively. The
statement of financial position at April 30, 2013 follows:
Cash P40,000 Accounts payable P100,000
Other assets 360,000 Alba, capital 74,000

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Baspo, capital 130,000

Castro, capital 96,000
Total P400,000 Total P400,000
The assets and liabilities are recorded and presented at their respective fair values, Jocson is
to be admitted as a new partner with a 20% capital interest and a 20% share of profits and
losses in exchange for a cash contribution. No goodwill or bonus is to be recorded. How
much cash should Jocson contribute?
a. P60,000
b. P72,000
c. P75,000
d. P80,000
15. The following is the condensed statement of financial position of the partnership Jo, Li and
Bi who share profits and losses in the ratio of 4:3:3.
Cash P 180,000 Accounts payable P 420,000

Other assets 1,660,000 Bi, Loan 60,000
Jo, receivable 40,000 Jo, Capital 620,000
Li, Capital 400,000
Bi, capital 380,000
Total P1,880,000 Total P1,880,000
No. 17 — Continued
Assume that the assets and liabilities are fairly valued on the balance sheet and the
partnership decides to admit Mac as a new partner, with a 20% interest. NO goodwill or
bonus is to be recorded. How much Mac should contribute in cash or other assets?
a. P350,000
b. P280,000
c. P355,000
d. P284,000
16. Carlos and Deo are partners who share profits and losses in the ratio of 7:3, respectively. On
October 5, 2013, their respective capital accounts were as follows:
Carlos P35,000
Deo 30,000
On that date they agreed to admit Sotto as a partner with a one-third interest in the capital and
profits and losses, and upon his investment of P25,000. The new partnership will begin with
a total capital of P90,000. Immediately after Sotto’s admission, what are the capital balances
of Carlos, Deo, and Sotto, respectively?
a. P30,000; P30,000; P30,000;

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b. P31,500; P28,500; P30,000;

c. P31,667; P28,333; P30,000;
d. P35,000; P30,000 P25,000;
17. The capital account for the partnership of Lucas and Mateo at October 31, 2013 are as
follows:
Lucas, capital P 80,000
Mateo, capital 40,000
The partners share profits and losses in the ratio of 6:4 respectively.
The partnership is in desperate need of cash, and the partners agree to admit Naron as a
partner with one-third in the capital and profits and losses upon his investment of P30,000.
Immediately after Naron’s admission, what should be the capital balance of Lucas, Mateo
and Naron respectively, assuming goodwill is not to be recognized?
a. P50,000; P50,000; P50,000.
b. P60,000; P60,000; P50,000.
c. P66,667; P33,333; P50,000.
d. P68,000; P32,000; P50,000.
18. Ell and Emm are partners sharing profits 60% and 40%, respectively. On January l, Ell and
Emm decided to admit Enn as a new partner upon his investment of P8,000. On this date,
their interests in the partnership are as follows: Ell, P11,500; Emm, P9,300.
Assuming that the new partner is given a 1/3 interest in the firm, with bonus being allowed
the new partner, the new capital balances of Ell, Emm and Enn, respectively, would be:
a. P11,500, P9,300, and P8,000
b. P12,480, P8,320, and P8,000
c. P11,520, P7,680, and P9,600
d. P10,540, P8,660, and P9,600.
19. Partners Chito and Ditas share profits in the ratio of 6:4 respectively. On December 31, 2013
their respective capital balances were Chito, P120,000 and Ditas, P100,000. On that date
Meng was admitted as partner with a one-third interest in capital and profits for an
investment of P80,000. The new partnership began in 2011 with total capital of P300,000.
Immediately after Meng’s admission, Chito’s capital should be:
a. P120,000
b. P108,000
c. P100,000
d. P160,000
20. Pal and Mall are partners with capitals of P200,000 and P 100,000 and sharing profits and
losses 3:1 respectively. They agree to admit Kent as partner, Kent invests P150,000 for a
50% interest in the firm. Pal and Mall transfer part of their capitals to Kent as a bonus.
The capital balances of the partners after Kent’s admission are:

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a. Pal, P168,750; Mall, P56,250; and Kent, P225,000.

b. Pal, P112,500; Mall, P37,500; and Kent, P150,000.
c. Pal, P200,000; Mall, P100,000; and Kent, P150,000.
d. Pal, P143,750; Mall, P 81,250; and Kent, P225,000
21. Pol and Loc are partners with capitals of P200,000 and P100,000 and sharing profits and
losses 3:1 respectively. They agree to admit Chic as partner. Chic invests P 125,000 for a
25% interest in the firm. Parties agree that the total firm capital after Chic’s admission is to
be P425,000.
The capital balance of the partners after Chic’s admission are:
a. Poi, P214,062.50; Loc, P104,687.50; and Chic, P106,250.00
b. Poi, P200,000.00; Loc, P100,000.00; and Chic, P125,000.00
c. Poi, P239,062.50; Loc, P 79,687.50; and Chic, P125,000.00
d. Poi, P250,000.00; Loc, P125,000.00; and Chic, P100,000.00Ben,
22. Joe and Fortune are new CPA’s and are to form a partnership. Ben is to contribute cash of
P50,000 and his computer originally costing P60,000 but has a second hand value of
P25,000. Joe is to contribute cash of P80,000. Fortune, whose family is selling computers, is
to contribute cash of P25,000 and a brand new computer plus printer with regular price at
P60,000 but which cost their family’s computer dealership, P50,000. Partners agree to share
profits equally. The capital balances upon formation are:
a. Ben, P 75,000; Joe, P80,000; and Fortune, P85,000.

b. Ben, P110,000; Joe, P80,000; and Fortune, P75,000.
c. Ben, P 80,000; Joe, P80,000; and Fortune, P80,000.
d. Ben, P 88,333; Joe, P88,333; and Fortune, P88,335.
23. Mitz, Marc and Mart are partners sharing earnings in the ratio of 5:3:2 respectively. As of
December 3 1, 2010, their capital balance showed P95,000 for Mitz, P80,000 for Marc, and
P60,000 for Mart.
On January 1, 2013 the partnership admitted Vince as a new partner and according to the
partnership agreement, Vince will contribute P80,000 in cash to the partnership and will also
pay P10,000.00 for 15% of Marc’s share. Vince will share 20% in the earnings while the
ratio of the original partners will remain proportionately the same as before Vince admission.
After Vince’s admission, the total capital of the partnership will be P330,000 while Vince’
capital account will be P70,000.
The balance of Marc’s capital account after the admission of Vince would be:
a. P81,100
b. P79,100
c. P74,600
d. P72,600

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24. The partnership of Cat and Dog provides for 3:2 sharing in profits and losses. Prior to the
admission of a third partner Elf, the capital accounts are Cat, P120,000 and Dog, P80,000.
Elf invests P50,000 for a P75,000 interest and partners agreed that the net assets of the new
partnership would be P300,000.
How much is Dog’s capital in the new partnership?
a. P105,000
b. P90,000
c. P70,000
d. P136,000
25. Ace, Boy and Cid are partners sharing profits in the ratio of 3:3:2. On July 31, their capital
balances are as follows:
Ace P700,000
Boy 500,000
Cid 400,000
The partners agree to admit Deo on the following agreement:
1. Deo is to pay Ace P500,000 for 1/2 interest of Ace’s interest.

2. Deo is also to invest P400,000 in the partnership.
3. The total capital of the partnership is to be P2,400,000, of which Deo’s interest is to be
25%
What are the capital balances of the partners after the admission of Deo?
Ace Boy Cid
a. P206,250 P206,250 P137,500
b. 350,000 500,000 400,000
c. 556,250 706,250 537,500
d. 500,000 400,000 350,000
26. In its first year of operations, Alba and Company, a partnership, made a net income of
P20,000 before providing for salaries of P5,000 and P3,000 per annum for Alba and Bana,
respectively, as stipulated in the partnership agreement. Capital contributions are as follows:
Alba P30,000
Bana 20,000
Cada 10,000
Assuming that no profit-and-loss ratios are provided in the partnership agreement and that
there has been no change in the capital contributions during the year, how much profit share
would Alba be entitled to received?
a. P10,000
b. P 5,000
c. P11,000

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d. P15,000
27. On January l, 2013, Zeep and Beep have capital balances of P20,000 and P16,000
respectively. On July l, 2013 Zeep invests an additional P4,000 and Beep withdraws P 1,600.
Profits and losses are divided as follows: Beep is the managing partner and as such shall
receive P 16,000 salary and Zeep shall receive P7,200; both partners shall receive interest of
10% on their beginning capital balances to offset whatever difference in capital investments
they have and any remainder shall be divided equally.
Income of the Zeep-Beep partnership for the year 2013 is P9,600. Zeep’s share in the net
income is:
a. P9,200
b. P 880
c. P4,800
d. P 600
28. Dexter and Joliver are partners agreeing to allow monthly salaries (P6,000 and P5,000
respectively), 6% interest on the capital investment at the beginning of the year (P300,000
and P230,000 respectively) and on the remaining balance, to be equally shared. The first year
registered a net income of P 100,000 Profit share of the partners are:
a. Dexter, P58,100 and Joliver, P41,900.

b. Dexter, P50,000 and Joliver, P50,000.
c. Dexter, P54,500 and Joliver, P45,500.
d. Dexter, P56,600 and Joliver, P43,400.
29. Mr. Zoom and his very close friend Mr. Boom formed a partnership on January 1, 2013 with
Zoom contributing P16,000 cash and Boom contributing equipment with a book value
ofP6,400 and a fair value of P8,000. During 2013 Boom made additional investments of
P1,600 on April 1 and P1,600 on June l, and on September 1, he withdrew P4,000. Zoom had
no additional investments nor withdrawals during the year. The average capital balance at the
end of 2013 for Mr. Boom is:
a. P9,600
b. P8,000
c. P8,800
d. P7,200
30. On January l, 2013, David and Enrile decided to forn a partnership. At the end of the year,
the partnership made a net income of P120,000. The capital accounts of the partnership show
the following transactions.
David, Capital Enrile, Capital
Dr. Cr Dr Cr
January 1 - P40,000 - P25,000
April 1 P5,000 - - -
June 1 - - - 10,000

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August 1 - 10,000 - -
September 1 - - P3,000 -
October 1 - 5,000 1,000 -
December 1 - 4,000 - 5,000
Assuming that an interest of 20% per annum is given on average capital and the balance of
the profits is divided equally, the sharing of the profits shall be:
a. David, P60,000; Enrile, P59,400
b. David, P61,200; Enrile, P58,800
c. David, P67,200; Enrile, P52,800
d. David, P68,800; Enrile, P51,200
31. The partnership agreement of Eve and Fred provides that interest at 10% per year is to be
credited to each partner on the basis of weighted-average capital balances. A summary of
Fred’s capital account for the year ended 31 December 2013 is as follows:
Balance, 1 January P280,000.00
Additional Investment, July 1 80,000.00
Withdrawal, 1 August ( 30,000.00 )
Balance, 31 December 330,000.00
The amount of interest that should be credited to Fred’s capital account for 2013 is
a. P30,750
b. P30,500
c. P34,500
d. P33,000
32. A, B and C are partners in the accounting firm. Their capital account balances at year-end
were: A, P90,000; B, P110,000; C, P50,000. They share profits and losses in a 4:4:2 ratio,
after the following special terns:
(1) Partner C is to receive a bonus of 10% of the net income after bonus.
(2) Interest of 10% shall be paid on that portion of a partner’s capital in excess of P100,000.
(3) Salaries of P 10,000 and P12,000 shall be paid to partners A and C, respectively.
Assuming a net income of P44,000 for the year, the total profit share of partner C would be:
a. P 7,800
b. P16,800
c. P19,400
d. P19,800
33. A and B entered into a partnership as of March l, 2013 by investing P125,000 and P75,000,
respectively, they agreed that A, as the managing partner, was to receive a salary; P30,000
per year and a bonus computed at 10% of the net profit after adjustment for the salary; the

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balance of the profit was to be distributed in the ratio of their original capital balances. On
December 31, 2013, account balances were as follows:
Cash P 70,000 Accounts Payable P 60,000

Accounts receivable 7,000 A, capital 125,000
Furniture and fixtures 45,000 B, capital 75,000
Sales returns 5,000 A, drawing ( 20,000)
Purchases 196,000 B, drawing ( 30,000)
Operating expenses 60,000 Sales 233,000
Inventories on December 31, 2013 were as follows: supplies, P2,500, merchandise, P73,000,
prepaid insurance was P950 while accrued expenses were P1,550. Depreciation rate was 20%
per year.
The partners’ capital balances on December 3 1, 2013, after closing the net profit and
drawing accounts, were:
a. P135,940 P47,960
b. P139,540 P49,860
c. P139,680 P48,680
d. P142,350 P47,670
34. ABCs partnership provided for the following distribution of profits and losses; “First”, A to
receive 10% of the net income up to P 1,000,000 and 20% on the amount of excess thereof;
“Second”, B and C each, are to receive 5% of the remaining income in excess of P 1,500,000
after A’s share as per above and; “The balance to be divided equally among the partners.”
For the year just ended, the partnership realized a net income of P2,500,000 before
distribution to partners. The share of A is:
a. P1,300,000
b. P1,000,000
c. P1,080,000
d. P1,100,000
35. The partners, A and B, share profits 3:2. However, A is to receive a yearly bonus of 20% of
the profits, in addition to his profit share. The partnership made a net income for the year of
P24,000 before the bonus. Assuming A’s bonus is computed on profit after deducting said
bonus, how much profit share will B receive?
a. P15,200
b. P 9,600
c. P 8,000
d. P 9,000
36. Michelle, an active partner in the Michelle-Esme partnership receive an annual bonus of 25%
of the partnership income after deducting the bonus. For the year ended, December 31, 2013,
partnership income before the bonus amounted to P240,000. The bonus of Michelle for the
year 2013 is:

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a. P45,000
b. P48,000
c. P80,000
d. P60,000
37. Garcia and Henson formed a partnership on January 2, 2013 and agreed to share profits 90%,
10%, respectively. Garcia contributed capital of P25,000. Henson contributed no capital but
has a specialized expertise and manages the firm full time. There were no withdrawals during
the year. The partnership agreement provides for the following:
Capital accounts are to be credited annually with interest at 5% of beginning capital.
Henson is to be paid a salary of P1,000 a month.
Henson is to receive a bonus of 20% of income calculated before deducting his salary and
interest on both capital accounts.
Bonus, interest, and Henson’s salary are to be considered partnership expenses.
The partnership 2011 income statement follows:
Revenues P96,450
Expenses(including salary, interest and bonus) 49,700
Net income P46,750
What is Henson’s 2013 bonus?
a. P11,688
b. P12,000
c. P15,000
d. P15,738
38. On January 2, 2013, Bueno and Perez formed a partnership. Bueno contributed capital of
P175,000 and Perez, P25,000. They agreed to share profits and losses 80% and 20%,
respectively. Perez is the general manager and works in the partnership in full time. Perez is
given a salary of P5,000 a month; an interest of 5% of the starting capital (of both partners)
and a bonus of 15% of net profit before the salary, interest and the bonus.
The condensed statement of comprehensive income of the partnership for the year ended
December 31, 2013 is as follows:
Net Sales P875,000

Cost of Sales 700,000
Gross profits on sales P175,000
Expenses (including the salary, interest and the bonus) 143,000
Total comprehensive income P 32,000

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The bonus of Perez in 2013 is:

a. P13,304.35
b. P18,000.00
c. P16,456.00
d. P20,700.00
39. On January 1, 2013, A, B, C and D formed Bekha Trading co., a partnership, with capital
contributions as follows: A, P50,000; B, P25,000; C, P25,000; and D, P20.000. The
partnership contract provided that each partner shall receive a 5% interest on contributed
capital, and that A and B shall receive salaries of P5,000 and P3,000, respectively. The
contract also provided that C shall receive a minimum ofP2,500 per annum, and D a
minimum of P6,000 per annum, which is inclusive of amounts representing interest and share
of remaining profits. The balance of the profits shall be distributed to A, B. C, and D in a
3:3:2:2 ratio.
What amount must be earned by the partnership, before any charge for interest and salaries,
so that A may receive an aggregate of P12,500 including interest, salary and share of profits?
a. P16,667
b. P30,000
c. P30,667
d. P32,333
40. Arturo Perez, a partner in the AP Partnership, has a 30% participation in partnership profits
and losses. Perez’s capital account has a net decrease of P60,000 during the calendar year
2013. During 2013, Perez withdrew P130,000 (charged against his capital account) and
contributed property valued at P25 ,000 to the partnership. What was the net income of the
AP Partnership for 2013?
a. P150,000
b. P233,333
c. P350,000
d. P550,000
41. K, L, and M are partners with average capital balances during 2013 of P472,500, P238,650,
and P162,350, respectively. The partners receive 10% interest on their average capital
balances; after deducting salaries of P 122,325 to K and P82,625 to M, the residual profits or
loss is divided equally.
In 2013, the partnership had a net loss of P125,624 before the interest and salaries to
partners.
By what amount should K’s and M’s capital account change?
K’s Capital Account M’s Capital Account
a. P40,844 decrease P28,358 increase
b. P28,358 increase P32,458 increase
c. P29,476 increase P17,536 increase
d. P30,267 increase P40,448 decrease

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42. Henry, Marta and Nestor are partners with average capital balances in 2013 of P240,000,
P120,000 and P80,000 respectively. Partners receive 10% interest on their average capital
balances. After deducting salaries of P60,000 to Henry and P40,000 to Nestor, the residual
profit or loss is divided equally. In 2008 the partnership sustained a P66,000 loss before
interest and salaries to partners. By what amount should Nestor’s capital account change?
a. P30,000 decrease
b. P22,000 decrease
c. P48,000 increase
d. P28,000 increase
43. Abe, Bert, and Carl are partners sharing profit on a 7:21 ratio. On January 1, 2013, Dave was
admitted into the partnership with 15% share in profits. The old partners continue to
participate in profits in their original ratios.
For the year 2013, the partnership showed a profit of P15,000. However, it was discovered
that the following items were omitted in the firm’s book:
Unrecorded at year end 2012 2013
Accrued expense P1,050
Accrued income 875
Prepaid expenses P1,400
Unearned income P1,225
The share of partner Bert in the 2013 net profit is:

a. P2,197.50
b. P2,490.50
c. P2,637.00
d. P3,149.75
44. Herm, Mar and Ama formed a partnership on January 1, 2013 and contributed P150,000,
P200,000 and P250,000, respectively. The Articles of Co-partnership provides that the
operating income be shared among the partners as follows: As salary, for Herm in the amount
of P24,000, for Mar, P18,000 and for Ama, P12,000. Interest of 12% on the average capital
during 2013 of the three (3) partners and the remainder in the ratio 2:4:4 respectively.
Additional information:
Operating income for the year ended December 31 , 2013, P176,000.
Herm contributed additional capital on July 1, P30,000 and made a drawing on October l,
P10,000, Mar contributed additional capital on August 1, P20,000 and made a drawing on
October l, P10,000, and Ama made a drawing of P30,000 on November 1.
The partners’ capital balances on December 31, 2013 are:
a. Herm, P179,680; Mar, P229,360; Anta, P239,360
b. Herm, P179,760; Mar, P229,520; Anta, P239,520

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c. Herm, P189,680; Mar, P239,360; Anta, P269,360

d. Herm, P223,180; Mar, P272,060; Anta, P280,760
45. The partnership of Gary, Jerome, and Paul was formed on January 1, 2013. The original
investments were as follows:
Gary P 80,000
Jerome P120,000
Paul P180,000
According to the partnership agreement, net income or loss will be divided among the
respective partners as follows:
Salaries of P12,000 for Gary, PI 0,000 for Jerome, and P8,000 for Paul.
Interest of 8% on the average capital balance during the year of Gary, Jerome, and Paul
Remainder divided equally.
Additional information is as follows:
Net income of the partnership for the year ended December 31,2013 was P70,000.
Gary invested an additional P20,000 in the partnership on July 1,2013.
Paul withdrew P30,000 from the partnership on October l,2013.
Gary, Jerome and Paul made regular drawings against their shares of net income during
2013 of P 10,000 each.
The partner’s capital balances as of December 31,2013 are:
Gary Jerome Paul
a. P112,333 P132,733 P164,934
b. 102,333 122,733 154,934
c. 92,000 102,000 134,934
d. 122,333 132,733 164,934
46. On January 2, 2013 Phil, Art, and Rey formed the PAR partnership contributing cash as
follows:
Phil P192,000
Art 288,000
Rey 432,000
The partnership contract provides the following provisions in respect with partner’s
remuneration:
1. Interest of 12% on average capital balances.
2. Annual salaries as follows:
Phil P28,800
Art P24,000
Rey P27,200
3. Remainder of the net income divided 40% to Phil, 30% to Art, and 30% to Rey.

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Income before partner’s salaries and interest for the year ended December 31,2013 was
P184,160. Phil invested additional cash to the partnership on July 1,2013. Rey withdrew
P72,000 from the partnership on October l, 2013. The partners also withdrew P 1,500
monthly against their share of net income for the year.
What is the capital balance of Phil on December 31,2013?
a. P274,320
b. P286,992
c. P235,200
d. P257,280
47. Tim and Tom entered into a partnership on March l, 2013 by investing P125,000 and
P75,000, respectively. They agreed that Tim, as the managing partner, is to receive a salary
of P30,000 per year and a bonus computed at 10% of the net profit after adjustment for the
salary and bonus; the balance of the profit was to be distributed in the ratio of their original
capital balances. On December 31, 2013, account balances were as follows:
Cash P70,000 Accounts payable P60,000
Accounts receivable 67,000 Tim, Capital 125,000
Furniture and Fixtures 45,000 Tom, Capital 75,000
Sales returns and allowances 5,000 Tim, Drawing (20,000)
Net Purchases 196,000 Tom, Drawing (30,000)
Operating expenses 60,000 Sales 233,000
Inventories on December 31, 2013 were as follows: supplies, P2,500; merchandise, P73,000.
Prepaid insurance was P950 while accrued expenses were P1,550. Depreciation rate was 20%
per year.
The partner’s capital balances on December 31, 2013, after closing the net profit and drawing
accounts, were:
Tim Tom
a. P142,350 P47,670
b. P135,940 P47,960
c. P139,540 P49,860
d. P139,491 P49,909
48. FF, GG, and HH form a partnership and agree to maintain average investments of
P2,250,000, and P 1,250,000, respectively. Interest on the excess or deficiency in a capital
contribution is to be computed at 6% per annum. After the interest allowances, FF, GG and
HH are to share any balance in the ratio of 5:3:2Average amounts invested during the first
six months were as follows: FF, P3,000,000,GG, P1,000,000.A loss from operations of
P62,500 was incurred for the first six months. How is this loss distributed among the
partners?
FF GG HH
a. P21,875 P18,375 P22,250

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b. 12,500 10,000 49,500

c. 31,250 18,750 12,500
d. 18,375 21,875 22,250
49. RR, a partner in the RD partnership, is entitled to 40% of the profits and losses' During 2013,
RR contributed land to the partnership that cost her P50,000, but had a fair value of P60,000
Also during 2013, RR had drawings of P80,000. The balance of RRs capital accounts was
P120,000 at the beginning of the year and P150,000 at the end of the year.
What is the partnership's comprehensive income (loss) for 2013.
a. P(75,000)
b. P(50,000)
c. P150,000
d. P125,000
50. MM is trying to decide whether to accept a salary of P40,000 or a salary of P25,000 plus a
bonus of 10% of net income after salaries and bonus as a means of allocating profit among
the partners. Salaries traceable to the other partners are estimated to be P 100,000. What
amount of income would be necessary so that MM would consider the choices to be equal?
a. P165,000
b. P290,000
c. P265,000
d. P305,000
51. KK, SS and WW formed a partnership on January l, 2013. Each contributed P144,000.
Salaries were to be allowed as follows:
KK P36,000
SS 36,000
WW 54,000
Drawings were equal to salaries and be taken out evenly throughout the year.
With sufficient partnership net income, KK and SS could split a bonus equal to 25 percent of
partnership net income after salaries and bonus (in no event could the bonus go below zero).
Remaining profits were to be divided as follows: 30% for KK; 30% for SS, and 40% for WW.
For the year, partnership total comprehensive income was P 144,000.
What are the capital balances of the partners on December 31, 2013.
a. KK, P186,120; SS, P186,120; WW, P203,760
b. KK, 151,200; LL, 151,200; WW, 149,400
c. KK, 150,120; SS, 150,120; WW, 149,760
d. KK, 150,600; SS, 150,600; WW, 148,800
52. Adam and Eve are CPA's who have been operating their own separate practices as sole
proprietors. They decided to combine the two firms as a partnership on January 5, 2013. The
following assets were contributed by each:

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Adam Eve
Cash P100,000 P100,000
Accounts receivables 225,000 190,000
Furniture and equipment 35,000 38,000
Computer equipment 46,000
The partners agreed to split profits on the basis of gross cash collections from billing generated
from clients. During 2013, Adam's clients paid the firm a total P 1,500,000 and Eve's clients paid
P 1,625,000. Expenses for the year were P 1,080,000 of which P480,000 were attributable to
Adam and P600,000 to Eve. During 2013 Eve withdrew P750,000 cash for personal needs and
contributed an additional computer valued at P22,000.
What is the capital balance of Eve at December 3 1, 2013?
a. P576,000
b. P839,400
c. P709,400
d. P889,400
53. Roy and Sam was organized and began operations on March l, 2013. On that date, Roy
invested PI 50,000 and Sam invested computer equipment with current fair value of PI
80,000, Because of shortage of cash, on November l , 2013 Sam invested additional cash of
P60,000 in the partnership. The partnership contract Includes the following remuneration
plan:
Roy Sam
Monthly Salary (recognized expense) P10,000 P20,000
Annual interest on beginning capital 12% 12%
Bonus on the net profit before salaries and
interest but after bonus 20% -
Balance equally.
The salary was to be withdrawn by each partner in monthly installments. The partnership's net
profit for 2013 is P120,000.
What are the capital balances of the partners on December 31, 2013?
Roy Sam
a. P243,500 P266,500
b. P136,000 P350,000
c. P 86,000 P154,000
d. P 87,000 P155,000
54. TM partnership begins its first year of operations with the following capital balances:
Tan capital P200,000

May capital P100,000
According to the partnership agreement all profits will be distributed as follows:

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a. Tan will be allowed a monthly salary of P20,000 with P 10,000 assigned to May.
b. The partners will be allowed with interest equal to 10 percent of the capital balance as of
the first day of the year.
c. Tan will be allowed a bonus of 10 percent of the net profit after bonus.
d. The remainder will be divided on the basis of the beginning capital for the first year and
equally for the second year.
e. Each partner is allowed to withdraw up to P 10,000 a year.
Assume that the net loss for the first year of operations is P 15,000 with net income of
P55,000 in the subsequent year. Assume further that each partner withdraws the maximum
amount from the business each period.
What is the balance of Tan's capital account at the end of the second year?
a. P264,750
b. P284,750
c. P180,000
d. P184,750
55. On June 30, 2013 the balance sheet for the partnership ot together with their respective profit
and loss ratio, were as follows:
Assets, at cost P180,000
Cruz, loan 9,000
Cruz, capital (20%) 42,000
Merced, capital (20%) 39,000
Prieto, capital 90,000
P180,000
Cruz had decided to retire from the partnership. By mutual agreement, the assets are to be
adjusted to their fair value of P216,000 at June 30, 2013. It was agreed that the partnership would
pay Cruz P61,200 cash for Cruz's partnership interest, including Cruz’s loan which is to be
repaid in full. No goodwill is to be recorded. After Cruz’s retirement, what is the balance of
Merced capital account?
a. P36,450
b. P39,000
c. P45,450
d. P46,200
56. Cen, Deng and Lala are partners with capital balances on 31 December 2011 of P300,000,
P300,000 and P200,000 respectively. Profit are shared equally. Lala wishes to withdraw and
it is agreed that she is to take certain furniture and fixtures with second hand value of
P50,000 and note for the balance of her interest. The furniture and fixtures are carried in the
books at P65,000. Brand new, the furniture and fixtures may cost P80,000. Lala’s acquisition
of the second-hand furniture will result to:
a. Reduction in capital of P15,000 each for Cen and Deng.
b. Reduction in capital of P10,000 for Lala.

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c. Reduction in capital of P5,000 each for Cen, Deng and Lala.

d. Reduction 'in capital of P 7,500 each for Cen, and Deng.
57. On December 31, 2013 the condensed statement of financial position of ABC Partnership is
presented below:
Total assets P180,000

Amy loan P10,000
Amy capital 45,000
Bea capital 40,000
Cat capital 85,000
Total P180,000
Amy, Bea and Cat share profits and losses in the ratio of 3:2: 1 respectively. It was agreed
among the partners that Amy retires from the partnership and the partnership's assets to be
adjusted to their fair value of P210,000. The partners further agreed to pay Amy P64,000
cash for her total interest in the partnership.
What is the capital balance of Cat after the retirement of Amy?
a. P35,000
b. P92,000
c. P27,000
d. P33,000
58. Lina, Mina and Nina were partners with capital balances on January 2, 2013 of P300,000,
P200,000 and P 100,000, respectively. On July l, 2013 Lina retires from the partnership. On
the date of retirement the partnership net loss is P60,000 and the partners agreed that certain
asset is to be revalued at P80,000 from its original cost of P50,000. The partners agreed
further to pay Lina P225,000 in settlement of her interest. The remaining partners continue to
operate under a new partnership, MN partnership.
What is the total capital of MN partnership?
a. P345,000
b. P285,000
c. P340,000
d. 280,000
59. Rita, Sisa, and Tina are partners with capital balances on June 30, 2013 of P60,000, P60,000
and P40,000, respectively. Profits and losses are shared equally. Tina withdraws from the
partnership. The partners agree that Tina is to take certain furniture at their second hand
value of P2,400 and cash for the balance of her interest. The furniture is carried on the books
as fully depreciated.
The amount of cash to be paid to Tina and the capital balances of the remaining pamers after
the retirement of Tina are:
Cash Rita capital Sisa capital
a. P40,000 P60,000 P60,000

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b. P37,600 P61,200 P61,200

c. P38,400 P60,800 P60,800
d. P42,800 P58,800 P58,800
60. As of December 31,2013 , the books of AME Partnership showed balances of:
A, P40,000; M, P25,000; E, P5,000. The partners’ profit and loss ratio was 3:2:1,
respectively. The partners decided to liquidate and they sold all non-cash assets for P37,000.
After settlement of all liabilities amounting to P12,000, they still have cash of P28,000 left
for distribution. Assuming that any capital debit balance is uncollectible, the share of A in the
distribution of the P28,000 cash would be:
a. P17,800
b. P18,000
c. P19,000
d. P17,000
61. A, B and C are partners in a textile distribution business, sharing profits and losses equally.
On December 31 , 2013, the partnership capital and the partners' drawing were as follows:
A B C Total
Capital P100,000 P80,000 P300,000 P480,000
Drawing 60,000 40,000 20,000 120,000
The partnership was unable to collect on its trade receivables, and it was forced to liquidate.
The operating profits for 2013 amounted to P72,000, and was all exhausted including the
partnership assets. Unsettled creditors' claim at December 31, 2013 amounted to P84,000. B
and C have substantial private resources, but A has no available free assets.
The final cash distribution to C was:
a. P162,000
b. P108,000
c. P84,000
d. P78,000
62. After operating for five years, the books of the partnerhsip of Joe and Letty showed the
following balances:
Net assets P130,000
Joe, capital 85,000
Letty, capital 45,000
If liquidation takes place at this point and the net assets are realized at book value, the
partners are entitled to:
a. Joe to receive P90,000 & Letty to receive P40,000
b. Joe to receive P97,500 & Letty to receive P32,500
c. Joe to receive P65,000 & Letty to receive P65,000
d. Joe to receive P85,000 & Letty to receive P45,000

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63. The following statement of financial position is presented for the partnership of David, Ebro,
and Franco who share profits and losses in the ratio of 5:3:2 respectively:
Cash P 60,000 Liabilities P140,000
Other assets 540,000 David, capital 280,000
Ebro, capital 160,000
Franco, capital 20,000
The partners decide to liquidate the partnership. If the other assets are sold for P400,000, how
should the available cash be distributed to each partner?
a. David, P280,000; Ebro, P160,000; Franco, P20,000
b. David, P210,000; Ebro, P118,000; Franco, P8,000
c. David, P206,000; Ebro, P114,000; Franco, P0
d. David, P205,000; Ebro, P115,000; Franco,P0
64. Gilbert, Joseph and Li are partners with capital balance of P350,000, P250,000 and P350,000
and sharing profits 30%, 20% and 50% respectively. Partners agree to dissolve the business
and upon liquidation, all of the partnership assets are sold and sufficient cash is realized to
pay all the claims except ore for P50,000. Li is personally insolvent, but the other two
partners are able to meet any indebtedness to the firm. On the remaining claim against the
partnership, Gilbert is to absorb.
a. P40,000
b. P15,000
c. P30,000
d. P25,000
65. The partners Aiko, Bren, Cinia and Dior who share profits and losses at 30%, 30%, 20% and
20% respectively decided to liquidate. All partnership assets are to be converted into cash.
Prior to the liquidation, the condensed statement of financial position is as follows:
Cash P 100,000 Liabilities P 750,000
Other assets 1,800,000 Bren,Loan 60,000
Dior, Loan 50,000
Aiko, Capital 420,000
Bren, Capital 315,000
Cinia, Capital 205,000
Dior, Capital 100,000
Total P1,900,000 Total P1,900,000
The non-cash assets realize P800,000, resulting to a loss of P1,000,000. All the partners are
solvent, and can contribute any additional cash to cover any deficiency. In the process of
liquidation, deficiency (ies) will occur and will require additional investment as follows:
a. Cinia at P7,500
b. Dior and Cinia for P50,000 and P 7,500 respectively

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c. Dior at P50,000
d. None
66. Silverio, Domingo, Reyes, and Pastor are partners, sharing earnings in the ratio of 3/21 ,
4/21, 6/21 and 8/21, respectively. The balances of their capital accounts on December 31,
2011 are as follows:
Silverio P1,000
Domingo 25,000
Reyes 25,000
Pastor 9,000
The partners decide to liquidate, and they accordingly convert the non-cash 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 of any partner’s capital is uncollectible.
The share of Silverio in the loss upon conversion of the non-cash assets into cash
a. P4,972
b. P5,257
c. P5,400
d. P5,200
67. The condensed statement of financial position of Alex, Jay and John partnership as of March
31,2013 follows:
Cash P 28,000
Other assets 265,000
Total P293,000
Liabilities P 48,000
Alex, Capital 95,000
Jay, Capital 80,000
John, Capital 70,000
Total P293,000
Income and loss ratio is 50:25:25 respectively. The partners voted to dissolve the partnership
and liquidate by selling assets in installments. P70,000 was realized on the first cash sale of
other assets which has a book value of P150,000. After settlement with creditors, all cash
available was distributed to partners. How much cash was received by John?
a. P10,500
b. P32,500
c. P21,250
d. P20,000
68. The partnership of Javier, Karim, and Laurel share profits and losses in the ratio of 5:3:2,
respectively. The partners voted to dissolve the partnership when its assets, liabilities, and
capital were as follows:

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Assets Liabilities and Capital

Other assets 210,000 Javier, capital 48,000
Karim, capital 72,000
Laurel, capital 70,000
The partnership will be liquidated over a prolonged period of time. As cash is available it
will be distributed to the partners. The first sale of non-cash assets having a book value of
P120,000 realized P90,000. How much cash should be distributed to each partner after this
sale?
a. Javier, P0; Karim, P28,800; Laurel, P41,200
b. Javier, P0; Karim, P30,000; Laurel, P40,000
c. Javier, P35,000; Karim, P21,000; Laurel, P14,000
d. Javier, P45,000; Karim, P27,000; Laurel, P18,000
69. Bach, Johann, and Straus were partners sharing profits and losses based on 4:4:2 decide to
liquidate. All assets of the partnership were liquidated. The condensed statement of financial
position just prior to liquidation follows:
Cash P100,000 Liabilities P140,000
Other assets 400,000 Bach, Loan 10,000
Bach, capital 45,000
Johann, capital 105,000
Straus, capital 200,000
Total P500,000 Total Liabilities and Capital P500,000
Other assets were sold for P247,500 realizing a loss of P152,500. Parties agreed to fully
terminate the partnership’s business, thus, necessitating distribution of cash to partners and in
the event of capital deficiency, contribution of additional cash. The three partners were all
solvent and could answer any capital deficiency.
Name the partner and give the corresponding additional cash he had to invest due to his net
capital deficiency to finally settle the liquidation of the partnership.
a. Bach, P16,000
b. Johann, P44,000
c. Bach, P 6,000
d. Straus, P30,500
70. Partners Beth, John, and Star who shared profit and losses based on 4:4:2 decided to
liquidate. All assets of the partnership were liquidated.
The condensed statement of financial position just prior to liquidation follows:
Cash P100,000 Liabilities P140,000

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Other assets 400,000 Beth, Loan 10,000

Beth, capital 45,000
John, capital 105,000
Star, capital 200,000
Other assets were sold for P247,500 realizing a loss of P152,500. Parties agreed to fully
terminate the partnership's business thus, necessitating distribution of cash to partners and in the
event of capital deficiency, contribution of additional cash. The three partners all solvent and
could answer any capital deficiency. The realization of assets, distribution of loss and payment of
liabilities resulted to the following partners loan and capital accounts balances prior to final cash
settlement:
Beth Loan Beth, Capital John, Capital Star, Capital
a. P10,000 P10,000 P50,000 P165,000
b. 10,000 (16,000) 44,000 169,500
c. 10,000 15,000 55,000 165,000
d. 10,000 45,000 105,000 200,000
71. Jacob, Santos, and Hervas, partners, share net income and loses in the ratio of 5:3:2. The
partners decided to liquidate the partnership. Their statement of financial position prior to
liquidation is:
Assets Liabilities & Capital
Other assets 210,000 Jacob, Loan 8,000
Jacob, capital 40,000
Santos, capital 72,000
Hervas, capital 70,000
Total P250,000 Total Liabilities & Capital P250,000
The partnership is to be liquidated by installment. The first sale of non-cash assets with a
carrying amount of P120,000 realized P90,000. Liquidation expenses paid amounted to
P2,000.
How much cash should be distributed to each partner?
Jacob Santos Hervas
a. None P35,400 P45,600
b. 32,000 62,400 63,600
c. None 9,600 28,400
d. None 27,600 40,400
72. The following statement of financial position is for the partnership of D, E and F:

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Other assets 180,000 D, capital (40%) 37,000
E, capital (40%) 65,000
F, capital (20%) 48,000
Figures shown parenthetically reflect agreed profit and loss sharing percentages.
If the firm as shown on the original balance sheet, is dissolved and liquidated by selling
assets in installments, the first sale of non-cash assets having a book value of P90,000
realizes P50,000 and cash of P17,000 after settlement with creditors is distributed; the
respective partners would receive (to the nearest peso).
a. D, P8,000; E, P8,000; F, P4,000
b. D, 6,667; E, 6,667; F, 6,666
c. D, 0; E, 13,333; F 6,667
d. D, 0; E, 1,000; F, 16,000
Daniella
73. L, M, N and O partners to a law firm share profits 5:3:1:1 respectively. Partners accounts
prior to liquidation were as follows:
Advances (Dr) Loans (Cr) Capitals (Cr)
L - P5,000 P40,000
M - 10,000 30,000
N P4,500 - 15,000
O 2,500 - 25,000
At this point, cash of P 18,000 is available for distribution to the partners. How much of the
P18,000 cash should be distributed to each partner?
L M N O
a. P -0- P18,000 P -0- P -0-
b. P -0- P -0- P -0- P18,000
c. P -0- P 6,625 P -0- P11,375
d. P9,000 P 5,400 P1,800 P 1,600
74. The statement of financial position of the Watch Partnership on October 10, 2013 when it
decided to liquidate was as follows:
Other assets 125,000 Rolex capital (40%) 45,000
Swatch capital (40%) 42,000
Timex capital (20%) 18,000

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Assume the other assets with a book value of P90,000 are sold for P50,000 and that all
available cash, except for a P10,000 contingency fund, is distributed immediately. In this
case:
a. Rolex should receive nothing
b. Swatch should receive P10,000
c. Timex should receive P1,000
d. The cash should be distributed in the profit and loss ratio
75. Kay and Loy, partners who share profits and losses equally decided to liquidate their
partnership business in installment. The statement of financial position showed Cash,
P35,000; Liabilities, P20,000; Kay capital, P71,000; and Loy capital, P54,000. Anticipated
liquidation expenses amounts to P10,000.
How much cash can be distributed safely to each partner at this point?
Kay Loy
a. P5,000 P -0-
b. P5,000 P 500
c. P3,000 P -0-
d. P5,000 P1,000
76. The statement of financial position of QRST prior to liquidation shows:
Assets P90,000
Liabilities 15,000
Q, loan 5,000
Q, capital 20,000
R, capital 20,000
S, capital 20,000
T, capital 10,000
Total P90,000
Q, R, S, and T share profits and losses in the ratio of 2:1:l, respectively. Certain assets were sold
for P45,000. Creditors were paid in full amount owed and cash of P20,000 were distributed to
the partners.
How would the P20,000 cash be distributed to the partners?
Q R S T
a. P2,500 P 8,750 P 8,750 P -0-
b. P -0- P20,000 P -0- P -0-
c. P -0- P10,000 P10,000 P -0-
d. P5,000 P 5,000 P10,000 P -0-
77. On November 30, 2013 Bee, Cee, and Dee decided to liquidate BCD Partnership. Their
capital balances and profit and loss on this date are as follows:
Bee, capital P50,000 (40%)

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Cee, capital 60,000 (30%)

Dee, capital 20,000 (30%)
The net income from January 1 to November 30, 2013 is P44,000. On November 30, 2013,
cash and liabilities are P40,000 and P90,000, respectively.
For Bee to receive P55,200 in full settlement of his interest in the firm, how much must be
realized from the sale of the firm’s non-cash assets?
a. P233,000
b. P255,000
c. P149,000
d. P193,000
78. July l, 2013, Chess Partnership has the following statement of financial position:
Assets Liabilities & Capital
Cash P 20,400 Accounts payable P122,400
Other assets 219,600 Rook, Loan 14,400
Rook, capital (50%) 28,800
King, capital (50%) 74,400
As of Ju1y 1,2013,the partners have personal net worth as follows:
Rook King
Assets P62,400 P 91,200
Liabilities 56,400 122,400
The personal net worth of each partner does not include any amounts due to or from the
partnership.
Assume the other assets are sold for P 123,600 after incurring liquidation expenses of
P4,800. How much should King receive?
a. P -0-
b. P22,800
c. P24,000
d. P16,800
79. Jay, Kay, and Ell are partners in JKE Partnership and share profits and losses, 5:3:2,
respectively. The partners have agreed to liquidate the partnership. Prior to liquidation, the
partnership statement of financial position shows the following book values:
Cash P25,200
Non-cash assets 297,600
Notes payable to Ell 38,400
Other liabilities 184,800
Jay, capital 72,000

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Kay, capital (12,000)

Ell, capital 39,600
Liquidation expenses of P16,800 are paid. Non-cash assets with a book value of P240,000
are sold for P216,000.
How much cash should Ell receive?
a. P74,571
b. P46,458
c. P39,580
d. P37,600
80. Bel, Col, and Del, partners of the BCD partnership, shared profits and losses in the of 5:3:2,
respectively. On December 31,2013, the end of an unprofitable year, they decided to
liquidate the partnership. The partners’ capital account balances on the date were as follows:
Bel, capital P22,000
Col, capital 24,900
Del, capital 15,000
The liabilities of the partnership amounted to P30,000 including a loan of P10,000 payable to
Bel. The cash balance was P6,000. The partners planned to realize the non-cash cash assets in
installment and to distribute cash as it becomes available. All three partners are solvent.
If Bel received a total of P20,000 as a result of liquidation, what was the total amount
realized by the partnership on the non-cash assets?
a. P85,900
b. P91,900
c. P67,900
d. P61,900
81. The December 31,2013 statement of financial position of DJM Partnership are as follows:
Cash P20,000
Receivable from Day 20,000
Other assets 420,000
Accounts payable 170,000
Day, capital 120,000
Jay, capital 90,000
May, capital 80,000
The partners’ profit and loss percentage are Day, 50%; Jay, 30%; and May, 20%.
On January 1 of next year, the partners decide to liquidate the partnership. They agree that all
cash should be distributed as it becomes available during the liquidation process.
If cash of P220,000, including the P20,000 cash on hand becomes available, it should be
distributed first to settle the accounts payable and then to:

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Day Jay May

a. P25,000 P15,000 P10,000
b. P -0- P26,000 P24,000
c. P10,000 P32,000 P 8,000
d. P -0- P18,000 P32,000
Items 95 and 96 are based on the following data
On December 31, 2013, the accounting records of the STU Partnership included the
following ledger account balances:
(Dr) Cr
Sy, drawing P(24,000)
Uy, drawing ( 9,000)
Ty, loan 30,000
Sy, capital 123,000
Ty, capital 100,500
Uy, capital 108,000
Total assets of the partnership amounted to P478,500, including P52,500 cash. The
partnership was liquidated on December 31, 2008 and Uy received P83,250 cash pursuant to
the liquidation. Sy, Ty, and Uy shared income and losses in a 5:3:2 ratio, respectively.
82. How much is the loss on realization of assets?
a. P178,750
b. P 78,750
c. P 23,750
d. P123,750
83. How much cash is received by Sy?
a. P35,625
b. P59,625
c. P37,125
d. P13,125
84. Pepe and Pilar started a partnership some years ago and managed to operate profitably for
several years. Recently, however, they lost a substantial legal suit and incurred unexpected
losses on accounts receivable and inventories. As a result, they decided to liquidate. They
sold all assets and only P162,000 was available to pay liabilities, which amounted to
P297,000. Their capital account balances before the liquidation and their profit and loss
sharing ratios are shown below:
Capital Profit and
Balances Loss ratios
Pepe P207,000 60%
Pilar 121,500 40%

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Pepe is personally insolvent after investing cash to pay the unpaid creditors; but Pilar has
personal assets in excess of P900,000.
In the settlement to partners, how much cash should Pepe receive?
a. P63,900
b. P -0-
c. P15,300
d. P63,000
85. Batman and Robin decided to liquidate their partnership business on June l,2013, under
lump-sum liquidation. The partners had been sharing profits and losses on a 60:40 ratio. The
statement of financial position prepared on the day of liquidation began was as follows:
Cash P 18,000 Accounts payable P 42,000
Receivables 75,000 Batman, loan 24,000
Inventory 90,000 Batman, capital 102,000
Other assets 84,000 Robin, capital 90,000
Robin, drawing 9,000
During June, one-third of the receivables was collected; P45,000 of inventory was sold at an
average of 70% of book value; other assets were sold for P36,000.
How much should Batman and Robin receive upon liquidation?
Batman Robin
a. P32,100 P36,400
b. P 8,100 P27,400
c. P40,200 P41,800
d. P59,100 P54,400
86. The statement of financial position of Poe and Ping Partnership on May l, 2013 before
liquidation is as follows:
Other assets 71,000 Poe, capital (70%) 28,000
Ping, capital (30%) 22,000
Total P 85,000 Total P 85,000
In May, assets with a book value of P34,000 are sold for P29,000. Creditors are paid in full.
Liquidation expenses of P1,000 is paid, and P3,000 is paid to partners.
In May, how much did Ping receive?
a. P -0-

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b. P3,000
c. P 900
d. P2,100
87. Partners Bee, Cee, Dee and Gee who share profits 5:3:1:1, respectively, decide to liquidate
their partnership. Capital balances before liquidation are:
Bee P60,000
Cee 40,000
Dee 30,000
Gee 10,000
The partners agree to the following:
(1) Partnership’s computer equipment with a book value of P12,000 is to be taken over by
partner Bee at a price of P15,000.
(2) Partnership’s liabilities are to be paid off and the balance of cash on hand, P30,000 is to
be divided in a manner that will avoid the need for any possible recovery of cash from a
partner.
How much of the P30,000 cash be distributed to Parmer Cee?
a. P10,000
b. P -0-
c. P20,000
d. P15,000

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lOMoARcPSD|4644109

Accountancy (La Consolacion College)

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The building is subject to a mortgage loan of P80, 000which is to be assumed by fee

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d. P58,170 and P33,095, respectively

Accounts payable 178,940 243,650

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contributed by Aldo has a mortgage of P90,000 and the partnership is to assume

Total P105, 375 P51,500

Accounts payable P45,750 P18,000

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Total liabilities and capital P1,880,000

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Baspo, capital 130,000

Cash P 180,000 Accounts payable P 420,000

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b. P31,500; P28,500; P30,000;

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a. Pal, P168,750; Mall, P56,250; and Kent, P225,000.

a. Ben, P 75,000; Joe, P80,000; and Fortune, P85,000.

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The partners agree to admit Deo on the following agreement:

1. Deo is to pay Ace P500,000 for 1/2 interest of Ace’s interest.

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a. Dexter, P58,100 and Joliver, P41,900.

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Cash P 70,000 Accounts Payable P 60,000

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Net Sales P875,000

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The bonus of Perez in 2013 is:

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The share of partner Bert in the 2013 net profit is:

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c. Herm, P189,680; Mar, P239,360; Anta, P269,360

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b. 12,500 10,000 49,500

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Tan capital P200,000

According to the partnership agreement all profits will be distributed as follows:

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c. Reduction in capital of P5,000 each for Cen, Deng and Lala.

Total assets P180,000

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b. P37,600 P61,200 P61,200

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Assets Liabilities and Capital

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Other assets 400,000 Beth, Loan 10,000

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Cash P 20,000 Liabilities P 50,000

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Cee, capital 60,000 (30%)

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Kay, capital (12,000)