ACCT 102 - PARTNERSHIP ACCOUNTING

MIDTERM EXAMS
MULTIPLE CHOICE - SHORT PROBLEM (SOLUTIONS)

#1 Cabance withdrawal 130,000.00

Investment - property (25,000.00)
Movement in investment and withdrawal 105,000.00
Net decresae in capital account 60,000.00
Movement in net decrease 45,000.00
Divided by Cabance share 0.30
Partnership profit 150,000.00

#2 Salary only 40,000.00

Salary (if with bonus) 25,000.00
Derived bonus 15,000.00

Bonus = 10% (Profit - Salaries - Bonus)

15,000 = 10% (Profit - 25,000 - 100,000 - 15,000)
15,000 = 10% (Profit - 140,000)
15,000 = 0.10Profit - 14,000
15,000 + 14,000 = 0.10Profit
29,000 = 0.10 Profit
Profit = 290,000

Total Espiritu
#3 Profit 102,500.00
Salaries of Espiritu (30,000.00) 30,000.00
Salaries of Cheng (45,000.00)
Bonus to Espiritu (2,500.00) 2,500.00
Interest on average capital balance (5,500.00) 2,000.00
Remaining profit for equal distribution 19,500.00 9,750.00
Allocation of profit 44,250.00

Computation of bonus (B):

B = 10% (Profit - Salaries - B)
B = 10% (102,500 - 30,000 - 45,000 - B)
B = 10% (27,500 - B)
B = 2,750 - 0.10B
1.1B = 2,750
Bonus = 2,500

Computation of interest on averge capital balance:

Espiritu, Capital 20,000.00 0.10
Cheng, Capital 35,000.00 0.10
Total interest on average capital balance

#4 Profit before deducting bonus of 10% 24,000.00 (in terms of percentage, this is equivale
 Divided by 1.20 (divide it by its equivalent perentage to
Profit after bonus 20,000.00
Bonus rate 0.20
Computed bonus for Santos 4,000.00

Gloria's share:
Profit after bonus 20,000.00
P & L sharing ratio 2/5
Profit share of Gloria 8,000.00

#5 Sy's share in profit 40,000.00

Less salary of Sy (10,000.00)
Less interest on capital of Sy (4,000.00)
Derived share in profit 26,000.00
Divided by Sy's P & L sharing ratio 0.40
Grossed up profit of partnership 65,000.00
Add back salaries of Antiporda and Sy 30,000.00
Add back interest of Antiporda and Sy 14,000.00

Dervied partnership profit 109,000.00

#6 Overvalued assets (negative asset revaluation) (300,000.00)

Detoya's P & L sharing ratio 1/6
Detoya's share in negative asset revaluation (50,000.00)
Detoya, Capital balance before revaluation 500,000.00
Detoya, Capital after revaluation 450,000.00

#7 AC CC Bonus
Old partners 1,950,000.00 2,250,000.00 (300,000.00)
New partner 1,050,000.00 750,000.00 300,000.00
Total 3,000,000.00 3,000,000.00 -

Daganta's share in bonus given to Barros:

Bonus 300,000.00
P & L sharing ratio 1/3
Share on bonus to be given to Barros 100,000.00

Daganta's capital balance after admission of Barros:

Daganta, Capital 1,500,000.00
Less bonus to Barros (100,000.00)
Daganta, Capital after admission of Barros 1,400,000.00

#8 AC CC Bonus
Old partners 19,200.00 20,800.00 (1,600.00)
New partner 9,600.00 8,000.00 1,600.00
Total 28,800.00 28,800.00 -
 Ragasa Mendoza Gangoso
Capital contribution 11,500.00 9,300.00 8,000.00
Bonus to Gangoso, new partner:
Ragasa's share (1,600 x 3/5) (960.00) 960.00
Mendoza's share (1,600 x 2/5) (640.00) 640.00
New capital balances 10,540.00 8,660.00 9,600.00

#9
Capital Asset Rev. Total
Chan 250,000.00 30,000.00 280,000.00
Ching 150,000.00 18,000.00 168,000.00
Chen 100,000.00 12,000.00 112,000.00

500,000.00 60,000.00 560,000.00

#10 Calvo, Capital after share in profit 96,000.00

Percent sold to Carreon 0.50
Credit to Carreon's capital account 48,000.00

#11 AC CC Bonus
Old partners 420,000.00 400,000.00 20,000.00
New partner 140,000.00 160,000.00 (20,000.00)
560,000.00 560,000.00 -

Share of Cortez in bonus

Asset revaluation 20,000.00
P & L sharing ratio 2/5
Share in bonus 8,000.00

Cortez Capital after admission of Conde:

Cortez, Capital beginning 180,000.00
Share in bonus 8,000.00
Cortez, Capital 188,000.00

#12 AC CC Asset Rev.

Old partners 800,000.00 700,000.00 100,000.00

Share of existing partners in negative asset revaluation:

Asset Rev.
Cariaso 100,000.00 x 60% 60,000.00
Carino 100,000.00 x 30% 30,000.00
Carillo 100,000.00 x 10% 10,000.00
100,000.00

#13 Capital after Purchased by Capital after

Revaluation Cardel (1/4) Admission
Cariaso 460,000.00 (115,000.00) 345,000.00
 Carino 230,000.00 (57,500.00) 172,500.00
Carillo 110,000.00 (27,500.00) 82,500.00
800,000.00 (200,000.00) 600,000.00

#14 Purchased by Capital after

Capital Cardel (1/4) Admission
Cariaso 400,000.00 (100,000.00) 300,000.00
Carino 200,000.00 (50,000.00) 150,000.00
Carillo 100,000.00 (25,000.00) 75,000.00
700,000.00 (175,000.00) 525,000.00

#15 Purchased by Capital after

Capital Cardel (1/4) Admission
Cariaso 400,000.00 (100,000.00) 300,000.00
Carino 200,000.00 (50,000.00) 150,000.00
Carillo 100,000.00 (25,000.00) 75,000.00
700,000.00 (175,000.00) 525,000.00

#16 Alpha Beta Cara

1/1 280,000.00 300,000.00 170,000.00
Additional Investment 96,000.00 60,000.00 -
Drawings - (90,000.00) (70,000.00)
Capital, end before net profit 376,000.00 270,000.00 100,000.00
Capital, end after net profit
Net profit

Salary - 16,500.00 -
Interest on unadjusted ending capital 56,400.00 40,500.00 15,000.00
Allocation of remaining profit 25,150.00 30,180.00 45,270.00
Capital balance at year-end 457,550.00 357,180.00 160,270.00

#17 Gomez Aquilera Total

Investment 200,000.00 300,000.00 500,000.00

Salary 120,000.00 60,000.00 180,000.00

Allocation of remaining profit 88,000.00 132,000.00 220,000.00
Distribution of income 208,000.00 192,000.00 400,000.00

#18 Duterte Arroyo Markos

Cash 1,000,000.00 3,000,000.00 500,000.00
Land and euipment 4,000,000.00 1,500,000.00 -

Balance of equity 5,000,000.00 4,500,000.00 3,500,000.00

#19 AC CC Bonus
Old partners 5,950,000.00 6,000,000.00 (50,000.00)
New partner 1,050,000.00 1,000,000.00 50,000.00
7,000,000.00 7,000,000.00 -
 Therefore, balance of Kia, Capital after admission to the Partnership is P1,050,000.

#20 Ku Sy Ng
Capital before Kia's admission 2,200,000.00 2,400,000.00 1,400,000.00
Share in bonus given to Kia (25,000.00) (5,000.00) (20,000.00)
Capital after Kia's admission 2,175,000.00 2,395,000.00 1,380,000.00

#21 Appraised/ Increase in

Recorded Value Fair Value Value
Land 50,000.00 100,000.00 50,000.00
Inventory 62,500.00 87,500.00 25,000.00
112,500.00 187,500.00 75,000.00

Share of partners to asset revaluation:

Increase in Increase in
P & L Ratio Assets Capital
Brad 20% 75,000.00 15,000.00
Donald 30% 75,000.00 22,500.00
Cloney 50% 75,000.00 37,500.00
Total 75,000.00

#22 Capital of old partners 512,500.00

Increase in capital due to asset revaluation 75,000.00
Capital after revaluation 587,500.00
Divided by ratio of old partners to new partnership 4/5
Agreed partnership capital 734,375.00
x Share of McGyver 1/5
Cash required from McGyver 146,875.00

#23
P & L Ratio
Old parters 0.80
McGyver 0.20
1.00

Share of old partners to 80% or 4/5:

Ratio in New
Partnership Old P & L New P & L
Brad 80% or 4/5 20% 16%
Donald 80% or 4/5 30% 24%
Cloney 80% or 4/5 50% 40%
McGyver 20% or 1/5 0% 20%
Total 100%

#24 BONUS QUESTION

#25 BONUS QUESTION

#26 P & L Ratio Profit Share in Profit

Mariah 0.17 90,000.00 15,000.00
Nicki 0.33 90,000.00 30,000.00
Olery 0.50 90,000.00 45,000.00
1.00 90,000.00

#27 John (60%) Johny (40%) Total

Cash 2,205,000.00 - 2,205,000.00
Office equipment 630,000.00 - 630,000.00
Note payable (210,000.00) - (210,000.00)
Merchandise inventory - 1,575,000.00 1,575,000.00
Total 2,625,000.00 1,575,000.00 4,200,000.00

Bonus method
John (60%) Johny (40%)
Agreed capital of partnership 4,200,000.00 4,200,000.00
Ratio 0.60 0.40
Agreed capital of partners 2,520,000.00 1,680,000.00
Contributed capital 2,625,000.00 1,575,000.00
Bonus of John to Johny (105,000.00) 105,000.00

#28 No. of Mons.

Chia Balance Unchanged
Jan. 2, 2020 capital 48,000.00 48,000.00 4/12
May 1, 2020 withdrawal (6,000.00) 42,000.00 2/12
July 1, 2020 withdrawal (6,000.00) 36,000.00 6/12
Chia, average capital

No. of Mons.
Chiu Balance Unchanged
Jan. 2, 2020 capital 24,000.00 24,000.00 3/12
April 1, 2020 investment 12,000.00 36,000.00 6/12
Oct. 1, 2020 withdrawal (8,000.00) 28,000.00 3/12
Chiu, average capital

#29 Salary only 60,000.00

Salary (if with bonus) 25,000.00
Derived bonus 35,000.00

Bonus = 20% (Profit - Salaries - Bonus)

35,000 = 20% (Profit - 25,000 - 75,000 - 35,000)
35,000 = 20% (Profit - 135,000)
35,000 = 0.20Profit - 27,000
35,000 + 27,000 = 0.20Profit
 62,000 = 0.20 Profit
Profit = 310,000

#30 Maria Juan Total

Salary 120,000.00 - 120,000.00
10% interest on beg. Capital 60,000.00 80,000.00 140,000.00
Remaining profit (270,000-260,000) 5,000.00 5,000.00 10,000.00
Share in profit 185,000.00 85,000.00 270,000.00
 Cheng

45,000.00

3,500.00
9,750.00
58,250.00

2,000.00
3,500.00
5,500.00

erms of percentage, this is equivalent to 120%, that is 100% profit + 20% bonus)
de it by its equivalent perentage to get the 100%, which is the profit after bonus)
Capital Retained Capital after
(100%-25% sold) Admission
75% 210,000.00
75% 126,000.00
75% 84,000.00

420,000.00

Capital after
Capital Revaluation
400,000.00 460,000.00
200,000.00 230,000.00
100,000.00 110,000.00
700,000.00 800,000.00
BONUS QUESTION

Total
750,000.00
156,000.00
(160,000.00)
746,000.00
975,000.00
229,000.00

16,500.00
111,900.00
100,600.00
229,000.00
(100% less 1/5 share of new partner)
Average
16,000.00
7,000.00
18,000.00
41,000.00

Average
6,000.00
18,000.00
7,000.00
31,000.00