PARTNERSHIP MOCK EXAM

PART 1
1. X and Y are partners in a firm with capitals of 18,000 and 20,000,
respectively. Z was admitted for 1/3 share in profit and brings 34,000 as
capital. Calculate the amount of goodwill.

2. May, June and July are partners with average capital balances during 2021
of 120,000, 60,000, and 40,000 respectively. Partners receive 10% interest on
their average capital balances. After deducting salaries of 30,000 to May and
20,000 to July, the residual profit is divided equally. In 2021, the partnership
sustained a 33,000 loss before interest and salaries to partners. By what
amount should May’s Capital change?

3. Under the partnership agreement, Rina is to be allowed a bonus of 20% of

net income after bonus and the remainder is to be divided as follows; 35%
each to Tina and Unna, and 30% to Vina. If the partnership’s Income is
318,000, Tina,s share would be.

4. A and B formed a partnership. The partnership agreement stipulates the

following: (1) annual salary allowances of 80,000 for A and 40,000 for B; and
(2) the partnership share in profit and losses equally. The partnership earned
profit of 100,000 after salaries. How much is the share of B?

5. K and L are equal partners. They admitted M for a 1/4 share in future
profits. New profit sharing ratio will be.

6. Red, White and Blue form a partnership on May 1, 2021. they agree that
Red will contribute office equipment with a total fair value of 40,000. White will
contribute delivery equipment with a fair value of 80,000; and Blue will
contribute cash. If Blue want a one third interest in the capital and profits he
should contribute cash of.

7. Lindsey and Ruth are partners with capital balances of 60,000 and 20,000,
respectively. Profit and losses are divided in the ratio of 6:4. Lindsey and Ruth
decided to form a partnership with jobelle, who invested land value at 15,000
for a 20% capital interest in the new partnership. Jobelle cost of land was
12,000. what is the capital balance of Lindsey after the admission of Ruth?

8. As of December 31,2021 the books of TWO partnership showed capital

balances of Tim- 40,000, Wina- 25,000, and Oca- 5,000. the partners profit
and loss ratio was 3:2:1, respectively. The partners decided to liquidate and
they sold all non-cash assets for 37,000. after settlement of all liabilities
amounting to 12,000, they still have cash of 28,000 left for distribution.
Assuming that any capital debit balance is uncollectible, the share of Tim in
the distribution of 28,000 cash would be.
PART 2

1. Partners A and B each report a Capital Account of 300,000. Partner C

wants to join the partnership as an equal on-third partner. Because the
partnership has been profitable, Partners A and B require Partner C to
contribute 600,000 in cash to the partnership in return for a one-third interest.
Assume that Partners A and B share profit of 60% and 40% respectively, prior
to the admission of partner C. After admission of Partner C, Partner A and B
retain their relative proportion of profit allocation after granting Partner C a
30% profit allocation interest. Prepare the entry/entries in the book of
partnership to record the admission of Partner C.

2. Marvin, Andrew and Arlean were partners with capital balances as of

January 1, 2021 of 100,0000, 150,000 and 200,000, respectively, sharing
profit and losses on a 5:3:2 ratio. Om July 1, 2021, Arlean withdraw from the
partnership. The partners agreed that at the time of withdrawal, certain
inventories had to be revalued at 70,000 from its cost of 50,000. for the sixth-
month period ending June 30,2008, the partnership generated a net income of
140,000. Further, partnership will pay Arlean 195,000 for her interest. What is
the capital balance of Marvin after withdrawal of Arlean?

3. Based on the information below, what is Melisa’s capital account balance

on February 28?
Melisa and Efren Partnership was formed on February 28. On that date, the
following assets invested (at current fair values)
Melisa Efren
Cash 25,000 35,000
Inventories 55,000
Building 100,000
Equipment 15,000

The building was subject to a mortgage note payable of 30,000 that was to be
assumed by the partnership. The partnership contract provided that Melisa
and Efren were to share net income or losses 25% and 75% respectively. The
partnership contract also provide that the partners initially should have equal
interest in partnership capital with no additional investment of asset.

4. Carlo and Tyron are partners in a trading company. During 2021, they
withdrew their salary allowances of 200,000 and 300,000, respectively. Profit
and losses are shared in the ratio of 3:2. the income summary account before
any allocation has a credit balances of 600,000. the partners capital account
shows the following.
Carlo Tyron
Beginning 600,000 400,000
Additional 100,000 200,000
Withdrawal other than salary allowances (200,000) (100,000)

What are the capital balances of the partners for the year 2021 after closing
the income summary and the withdrawal account?
5. Based on the information below, what is the capital of Jose and after
formation?
Assume that Jose has been operating a retail store for a number of years. A
statement of financial position or July 1, 2020 is prepared for Jose company
as follows;

Jose Company
Statement of financial Position
As of July 1, 2020
Assets
Cash 60,000
Accounts receivable 50,000
Inventory 70,000
Equipment 40,000
Less: accumulated depreciation 4,000 36,000
Total assets 216,000

Liabilities and Equity

Accounts payable 86,000
Jose, Capital 130,000
Total Liabilities and Equity 216,000

Jose needs additional capital to meet the increasing sale and offers Pedro an
interest in the business. Jose and Pedro agree to form a partnership to known
as JP partnership; Jose’s business is audited and its net assets are
appraised. The audit and appraisal show the following:

1. Allowance for bad debts of 5,000 to be provided.

2. Invetory is to be recorded at its fair market value of 80,000.
3. 20,000 of accounts payable has not been recorded.

Jose and Pedro prepare a sign articles of co-partnership that include all
significant operating policies. On July, 2020 Pedro contribute 100,000 cash for
a one-third capital interest. The JP partnership is to acquire all of Jose’s
business and assume its liabilities.

6. Partner DD, EE, FF and GG share profit 50%, 30%, 10%, and 10%.
Accounts maintained with partners just prior to liquidation follow;
Advances (Dr.) Loans (Cr.) Capital (Cr.)
DD 5,000 40,000
EE 10,000 30,000
FF 4,500 15,000
GG 2,500 25,000

At this point 18,000 is available for distribution to the partners. How much
cash is to be distributed to GG?