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SET A

ACED1 – FAR REVIEW PARTNERSHIP AND CORPORATION

NAME: _______________________________ DATE:_______________

YEAR & SECTION:______________ SCORE: _____________

PROBLEM SOLVING. SHOW YOUR SOLUTIONS TO SUPPORT YOUR ANSWERS. WRITE THE LETTER OF YOUR FINAL ANSWER ( 3
POINTS EACH)

Use the following information for questions 1-3

The partners' income and loss sharing ratio is 2:3:5, respectively.

A, B, AND C PARTNERSHIP
Statement of Financial Position
December 31, 2023
Assets Liabilities and Partners' Equity
Cash P 90,000 Liabilities P300,000
Noncash assets 570,000 A, Capital 120,000
B, Capital 180,000
C, Capital 60,000
Total P660,000 Total P660,000

1. If the partnership is liquidated by selling the noncash assets for P390,000 and creditors are paid in full,
what is the amount of cash that can be safely distributed to B?

2. If the partnership is liquidated by selling the noncash assets for P750,000, and creditors are paid in full,
what is the total amount of cash that Partner A will receive in the distribution of cash to partners?

3. If the partnership is liquidated and the noncash assets are worthless, the creditors will look to whose
partner's personal assets for settlement of the creditors' claims?

a. The personal assets of Partner C.

b. The personal assets of Partners A and C.
c. The personal assets of all the partners.
d. The personal assets of the partners are not available for partnership debts.

4 A, B and C are partners, sharing income 2:1:2. After selling all of the assets for cash, dividing gains and losses
on realization, and paying liabilities, the balances in the capital accounts are as follows: A, P10,000 Cr; B,
P10,000 Cr; and C, P20,000 Dr. How much cash should be distributed to A if C is only solvent by P14,000?

5. In liquidation, balances prior to the distribution of cash to the partners are: Cash P255,000; Moore, Capital
P140,000; Simon, Capital P130,000, and Kelly, Capital P30,000. The income ratio is 6:2:2, respectively..
How much cash should be distributed to Simon if Kelly is not able to pay for his deficiency?

6. Gwen purchases a 25% interest for P30,000 when the partnership of Super, James and King has a total
capital of P270,000. Prior to the admission of Gwen, each partner has a capital balance of P90,000. Each

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partner relinquishes an equal amount of his capital balance to Gwen. The amount to be relinquished by
King is

7 Brenda is admitted to a partnership with a 25% capital interest by a cash investment of P90,000. If total
capital of the partnership is P390,000 before admitting Brenda, the bonus to Brenda is

Use the following information for questions 8-9.

Carla and Kidman are partners who share income and losses in the ratio of 3:2, respectively. On August 31,
their capital balances are: Carla, P175,000 and Kidman, P150,000. On that date, they agree to admit Lorna
as a partner with a one-third capital interest.

8. If Lorna invests P125,000 in the partnership, what is Carla's capital balance after Lorna's admittance?

a. P150,000
b. P158,333
c. P160,000
d. P175,000

9. If Lorna invests 200,000 in the partnership, what is Kidman's capital balance after Lorna's admittance?

a. P175,000
b. P160,000
c. P157,500
d. P150,000

10. Kring and Kong are partners who share profits and losses equally and have capital balances of P560,000
and P490,000, respectively. Stan is admitted into the partnership by investing P490,000 for a 30% capital
interest. The account balance of Kong, Capital after the admission of Stan would be

a. P462,000.
b. P476,000.
c. P504,000.
d. P490,000.