1.

The business assets and liabilities of John and Paul appear below:

John  Paul
Cash 11,000.00 22,354.00
Accounts Receivable 234,536.00 567,890.00
Inventories 120,035.00 260,102.00
Land 603,000.00  -
Building  - 428,267.00
Furniture and fixtures 50,345.00 34,789.00
Other Assets           2,000.00           3,600.00
Total     1,020,916.00     1,317,002.00

Accounts Payable        178,940.00        243,650.00

Notes Payable        200,000.00        345,000.00
John, Capital        641,976.00  -
Paul, Capital  -        728,352.00
Total     1,020,916.00     1,317,002.00

John and Paul agreed to form a partnership contributing their respective assets and equities subject to the follow

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: 5pts
 John Paul
11,000.00 22,354.00
214,536.00 532,890.00
114,535.00 253,402.00
603,000.00
428,267.00
50,345.00 34,789.00
- -
993,416.00 1,271,702.00

178,940.00 243,650.00
200,000.00 345,000.00
614,476.00 -
- 683,052.00
993,416.00 1,271,702.00

nd equities subject to the following adjustments:

2. 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 Aldo Bert

                           
Cash 10,000.00          12,000.00 30,000.00 10,000.00 12,000.00

Delivery                            28,000.00  - 60,000.00 28,000.00

trucks 150,000.00

                    
Computers           5,100.00  - 8,500.00 5,100.00
8,500.00

Office  -           3,500.00   2,500.00 3,500.00

furniture

                                     48,600.00 32,500.00 78,500.00 48,600.00

168,500.00

25,300.00 - 4,600.00

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 contributed by Aldo has a mortgage of P90,000 and the partnership is to assume
responsibility of 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, choose the correct answer and show your solution. 5pts

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.
Chris
30,000.00

2,500.00

32,500.00
159,600.00 53,200.00
- 20,700.00
3. Cong and Viy 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. Viy contributed only P90,000 cash.

Cong should make an additional investment

(withdrawal) of: 5pts

Cong Viy
Cash 126000 90000
FV - Equip 36000
162000
Note Payable 12000
Capital 150000 90000 240000
144000 96000
6000 -6000

Cong should withdraw 6,000 from his initial contribution while Viy should make an additional investment of 6,000
ment of 6,000
 JJ and KK are partners who share profits and losses in the ratio of 60%: 40%, respectively. JJ's salary is P60,000 and P30,000 for KK. The
partners are also paid interest on their average capital balances. In 2019, JJ received P30,000 of interest and KK, P12,000. The profit and loss
allocation is determined after deductions for the salary and interest payments. If KK's share in the residual income (income after deducting
salaries and interest) was P60,000 in 2019, what was the total partnership income? 5pts
60% 40%
JJ KK Total
Salaries 60,000.00 30,000.00 90,000.00
Interest 30,000.00 12,000.00 42,000.00
Residual Income 90,000.00 60,000.00 150,000.00
282,000.00
 nd P30,000 for KK. The
12,000. The profit and loss
(income after deducting
5. HH, MM, and AA formed a partnership on January 1, 2020, and contributed P150,000, P200,000, and P250,000, respectively. Their articles of co-partner
be shared among the partners as follows: salary, P24,000 for HH, P18,000 for MM, and P12,000 for AA; interest of 12% on the average capital during 2020
remainder in the ratio of 2:4:4, respectively.

The operating income for the year ending December 31, 2020 amounted to P176,000. HH contributed additional capital of P30,000 on July 1 and made a dr
contributed additional capital of P20,000 on August 1 and made a drawing of P10,000 on October 1; and AA made a drawing of P30,000 on November 1.

The partners' capital balances on December 31, 2020 are: 10

pts

2 4 4
HH MM AA
150,000.00 200,000.00 250,000.00 Beginning Balance
Additional Capital 30,000.00 20,000.00 Additional Inv.
Net Income 53,180.00 62,060.00 60,760.00 Drawings
233,180.00 282,060.00 310,760.00 Weighted
Drawings 10,000.00 10,000.00 30,000.00
Capital Balances 223,180.00 272,060.00 280,760.00

Beginning Balance
Additional Inv.
Drawings
Weighted

Beginning Balance
Additional Inv.
Drawings
Weighted

HH MM AA Total
Amount being allocated 176,000.00
Salaries 24,000.00 18,000.00 12,000.00 54,000.00
Interest on weighted average 19,500.00 24,700.00 29,400.00 73,600.00
Allocation of remaining 9,680.00 19,360.00 19,360.00 48,400.00
48,400.00 53,180.00 62,060.00 60,760.00 176,000.00
0,000, respectively. Their articles of co-partnership provide that the operating income
est of 12% on the average capital during 2020 of the three partners; and the

onal capital of P30,000 on July 1 and made a drawing of P10,000 on October1; MM

made a drawing of P30,000 on November 1.

HH
Balances Months outstanding Weighted Average
150,000.00 12 150,000.00
30,000.00 6 15,000.00
10,000.00 3 2,500.00
162,500.00

MM
Balances Months outstanding Weighted Average
200,000.00 12 200,000.00
20,000.00 5 8,333.33
10,000.00 3 2,500.00
205,833.33

AA
Balances Months outstanding Weighted Average
250,000.00 12 250,000.00
- -
30,000.00 2 5,000.00
245,000.00
6. On January 2, 2020, Berlin and Oslo formed a partnership. Berlin contributed capital of P175,000 and Oslo, P25,000.
They agreed to share profits and losses 80% and 20%, respectively. Oslo is the general manager and works in the
partnership full time and is given a salary of P5,000 a month; an interest of 5% of the beginning capital (of both partner)
and a bonus of 15% of net income before the salary, interest and the bonus.

The profit and loss statement of the partnership for the year ended December 31,
2020 is as follows:

Net Sales       

875,000.00

Cost of -     
goods sold 700,000.00

Gross profit       

175,000.00

Expenses (including the salary, interest -     

and the bonus) 143,000.00

        
Net Income
32,000.00

The amount of bonus to Oslo in 2020

amounted to: 5pts
 80% 20%

Berlin Oslo Total

Capital 175,000.00 25,000.00

Salary 5,000.00

Interest 8,750.00 1,250.00 10,000.00

Profit after salary 32,000.00

Annual salary 60,000.00

Interest on capital 10,000.00

Profit before annual salary and 102,000.00

interest but after bonus

Profit before annual salary and 102,000.00

interest but after bonus
Divide by 0.85
Profit before salary, bonus, int 120,000.00
Bonus rate 0.15
Bonus 18,000.00
7. Ay, Bee, and Ci are partners in an accounting firm. Their capital account balances at year-end were Ay P90,000; Bee P110,000; and Ci
P50,000. They share profits and losses on a 4:4:2 ratio, after the following special terms:

1. Partner Ci is to receive a bonus of 10% of net income

after the bonus.

2. Interests of 10% shall be paid on that portion of a partner's capital in

excess of P100,000.

3. Salaries of P10,000 and P12,000 shall be paid to partners Ay & Ci

respectively.

Assuming a net income of P44,000 for the year, the total profit share of
Partner Ci was: 5pts

4 4 2
Ay Bee Ci Total Profit
Capital Balances 90,000.00 110,000.00 50,000.00 250,000.00 Monthly salaries
Salaries 10,000.00 12,000.00 22,000.00 Profiy before salaries
Net income 135,600.00 16,600.00 155,800.00
Amount being allocated
Salaries
Bonus
Interest
Allocation of remaining

Ay Bee Ci Total
Amount being allocated 44000
Salaries 10,000.00 12,000.00 22,000.00
Bonus 4,000.00 4,000.00
Interest 1,000.00 1,000.00
Allocation 6,800.00 6,800.00 3,400.00 17,000.00
16,800.00 7,800.00 19,400.00
 44000
Monthly salaries 264,000.00
Profiy before salaries 308,000.00
Ay Bee Ci Total
Amount being allocated 308,000.00
120,000.00 144,000.00 264,000.00
4,000.00 4,000.00
- 1,000.00 1,000.00
Allocation of remaining 15,600.00 15,600.00 7,800.00 39,000.00
135,600.00 16,600.00 155,800.00