ACCTG 12 FINAL EXAMINATION

Instructor: Michael John V. Dayondon

Name: _______________________________
Section:__________Score:_____
Test I Problem Solving: Show your solutions all in good forms. Focus on your
own business. Huwag maging Daniel Padilla.

Problem 1
The RML Partnership shows the following profit and loss ratios and capital balances:
Ro 60% P252,000.00
Ma 30% 126,000.00
Li 10% 142,000.00

The partners decide to sell Kadong twenty percent of their respective capital and profit &
loss interests for a total payment of P90,000. Kadong will pay the money directly to the
partners.

Requirements:
1. If the partners agree that unrecognized goodwill is to be recorded prior to the sale
of Kadong, what are the capital balances of the partners after his admission?
2. If the partners agree that bonus method is used, what are the capital balances of
the partners after Kadong’s admission to the partnership?
3. How much cash should Ro, Ma, and Li receive respectively from Kadong?

Problem 2
The capital accounts of Alpha, Beta, and Gama are presented below with their respective
profit and loss ratio:
Alpha 60% P139,000.00
Beta 30% 209,000.00
Gama 10% 96,000.00

Freeza was admitted to the partnership when he purchased directly for P132,000 a
proportionate interest from Alpha and Beta in the net assets and profits of the
partnership. As a result, Freeza acquired a one-fifth interest in the net assets and profits
of the firm. Assuming no revaluation of assets is recorded, what is the combined gain
realized by Alpha and Beta upon the sale of a portion of their interests in the partnership
to Freeza?

Problem 3
Buknoy and Marvie are partners sharing profits and losses in the ratio of 18:12
respectively. On January 2, the partners decided to admit Dave as a new partner upon
his investment of P16,000. On this date, the interest in the partnership of Buknoy and
Marvie are as follows:
Buknoy 23,000
Marvie 18,600

Assuming that the new partner is given a 3/9 interest in the firm and the assets are
revalued. The capital balances of the partners after admission of Dave are:

Problem 4
Daniel and Kathryn, partners in the D&K partnership have capital balances of P100,000
and P40,000 with a shared income in a ratio of 4:1, respectively. Andrea is to be
admitted into the partnership with a twenty percent interest in the business.
Requirements: Record the admission of Andrea for each of the following independent
situations:
1. Andrea invests P60,000, and goodwill is to be recorded.
2. Andrea invests P60,000. Total capital is to be P200,000.
3. Andrea purchases the 20 percent interest by paying Daniel P22,000 and Kathryn
P11,000. Andrea is assigned 20 percent of each Daniel’s and Kathryn’s capital
accounts.
4. Andrea invests P32,000. Total capital is to be P172,000.
5. Andrea invests P32,000, and goodwill is to be recorded.

Problem 5
A condensed statement of financial position prepared for RM Partnership, owned by
Roma and Mida, as of October 31, 2052 is shown below. Roma and Mida invited Ardi to
their partnership. Roma and Mida have been dividing profits and losses in the ratio of
3:2 respectively, and this ratio will continue between the two after the admission of Ardi.
Then the new partnership will have a proft/loss ratio of Ardi, 50%, Roma, 30%, and
Mida, 20%.

RM Partnership
Statement of Financial Position
October 31, 2052

Current Assets P1,440,000 Liabilities P1,280,000

Property and Equipment 3,360,000 Roma, Capital 2,240,000
Total Assets P4,800,000 Mida, Capital 1,280,000
Total Liabilities & Equity P4,800,000

Below are five different conditions under which Ardi may be admitted into the
partnership. Compute the individual equity of Roma, Mida, and Ardi respectively, after
the admission of Ardi for each of the five independent conditions below.

1. Ardi purchases one-half equity in the partnership from Roma and Mida for
P2,200,000. Payment is to be made directly to Roma and Mida. Roma and Mida
each will retain one-half of their respective equities and transfer the other halves
to Ardi.
2. Ardi invests P4,000,000 to the partnership receiving 50% interest in the
partnership.
3. Ardi invests P4,000,000 to the partnership receiving 50% interest. The amount of
Ardi’s investment implies that the property, plant, and equipment were carried at
amount less than their fair values.
4. Ardi invests P2,400,000 in the partnership and receives 50% interest in the capital
and income. All partnership assets and liabilities are fairly valued.
5. Ardi invests P2,880,000 in the partnership and receives 50% interest in the capital
and profit. The bonus to Ardi will be charged against Roma and Mida in the ratio of
3:2, respectively.

Problem 6
Fred and Raul are partners who share profits and losses in the ratio of 21:9,
respectively. Their respective capital accounts are as follows:

Fred P35,000.00
Raul 30,000.00
They agreed to admit Lory as a partner with two-sixth interest in the capital and
profits/losses upon an investment of P25,000. The new partnership will begin with a
total capital of P90,000. Immediately after Lory’s admission, what are the capital
balances of Fred, Raul, and Lory, respectively?