Name: Honeycris H.

Lingatong Date: 02-17-22

PARCOR PRELIM EXAM

PARTNERSHIP (THEORIES)
1. B.
2. A.
3. C.
4. A.
5. D.
6. A.

PROBLEM SOLVING
1. The amount should be recorded in Jose’s capital account on formation of the partnership is
P55,000.

2. Blue should contribute the following of cash: P40,000.

Computation:
40,000+80,000= P120,000
Ratio: 1:3
120,000x1/3= 40,000

3. The amount of cash should Perla contribute is P200,000.

Computation:
Elsa’s Cash: 300,000
Elsa’s Interest: 60% Perla: 40%

300,000/60%= 500,000 (base of 100%)

500,000x40%= 200,000 (cash should Perla contribute)

4. –
Computation:
Santos Reyes
P300,000 P200,000
P150,000 +P150,00
P400,000 P350,000
P850,000
-100,000 (mortgage)
P750,000
5. The closing entry for the net income on Dec. 31, 2021 is a debit to Income Summary for
P180,00 and credits to Lebron Capital & James Capital, respectively of: P130,000 and
P90,000.

Computation:
Lebron James Total
Salary P120,000 P80,000 P200,000
+P10,000 +P10,000 -P20,0000
P130,000 P90,000 P180,000
Lebron: 130,000
James: 90,000

6. How much of the P90,000 partnership profit for 2021 should be distributed to JJ? P27,000.

Computation:
JJ KK LL TOTAL
Bonus (20%) P18,000 - - P18,000
Interest (15%) P15,000 P30,000 P45,000 P90,000
Balance (P6,000) (6,000) (6,000) (18,000)
P27,000 P24,000 P39,000 P90,000

7. What is Michael’s share of profit for the year? 20,941.67.

Computation:
Allan & Michael
Computation of the Average Capital Balances
For the Year Ended Dec. 31, 2021

Allan, Capital
Date CAPITAL ACCOUNT PORTION* AVERAGE
BALANCES OF THE YEAR CAPITAL
UNCHANGED BALANCES
Jan 1 40,000 x 3/12 10,000
Apr 3 48,000 x 5/12 20,000
Aug 28 42,000 x 3/12 10,500
Oct 31 60,000 x 3/12 15,000
Average Capital Balance 55,500
Michael, Capital
Date CAPITAL ACCOUNT BALANCES PORTION* OF THE AVERAGE CAPITAL
YEAR UNCHANGED BALANCES
Jan 1 60,000 x 2/12 10,000
Mar 5 51,000 x 4/12 17,000
Apr 6 58,000 x 7/12 33,833.33
 Oct 7 70,000 x 3/12 17,500
Average Capital Balance 78, 333.33
TOTAL AVERAGE CAPITAL 133,833.33
BALANCES

ALLAN MICHAEL TOTAL

x% Interest on Average
Capital:
ALLAN: 55,500 x 10% 5,550
MICHAEL: 78,333.33 x 7,833.33
10%
Subtotal: 13,383.33
Balance to be Divided
Equally
(39,500 (profit) –13,383.33
(subtotal)=26,116.67)
ALLAN: 26,116.67 x 50% 13,058.34
MICHAEL: 26,116.67 x 13,058.34 26,116.68
50%
Share of Partners in Profits 13,608.34 20,941.67 34,550.01
MICHAEL SHARE OF PROFIT 20,941.67

8. What is the profit share of LT and AM, respectively? LT- P6,620 & AM- P3,380.

Computation:
LT AM TOTAL
Interest P3,200 P3,600 P6,800
Salary P15,000 P7,500 P22,500
Balance (P11,580) (P7,720) (19,300)
P6,620 P3,380 P10,000
LT: P6,620
AM: P3,380