Question 1

 Alucard Quizon, a partner in the ML Partnership, has a 30% participation in the partnership profits and
losses. Alucard’s capital account has a net decrease of 60,000 during the calendar year 2019. During
2019, Alucard withdrew 130,000 (charged against his capital account) and contributed property valued
at 25,000 to the partnership. What was the net income of the ML Partnership for 2019?

Response: 550,000

Correct answer: 150,000

Score: 0 out of 1 No

Question 2

 Each partner’s capital account is debited for the fair value of his net contributions.

Response: False

Correct answer: False

Score: 1 out of 1 Yes

Question 3

 Atlas and Uranus are partners agreeing to allow monthly salaries (6,000 and 5,000, respectively), 6%
interest on the capital investment at the beginning of the year (300,000 and 230,000 respectively) and
on the remaining balance, to be equally divided. The first year registered a net income of 100,000. Profit
share of the partners are:

Response: Atlas, 58,100 ; Uranus, 41,900

Correct answer: Atlas, 58,100 ; Uranus, 41,900

Score: 1 out of 1 Yes

Question 4

 The assets contributed to the partnership during partnership formation are measured in the
partnership books at either fair value or carrying amount

Response: True

Correct answer: False

Score: 0 out of 1 No

Question 5

 Lance, Lloyd and Lily are new CPAs and are to form a partnership called 3L Partnership. Lance is to
contribute cash of 50,000 and his computer originally costing 60,000 but has a second hand value of
25,000. Lloyd is to contribute cash of 80,000. Lily, whose family is selling computers, is to contribute
 cash of 25,000 and a brand new computer plus printer with regular price at 60,000 but which cost their
family’s computer dealership, 50,000. Partners agree to share profits equally. The capital balances upon
formation are:

Response: Lance, 75,000; Lloyd, 80,000 ; Lily, 75,000

Correct answer: Lance, 75,000; Lloyd, 80,000 ; Lily, 85,000

Score: 0 out of 1 No

Question 6

 The partners Popol and Kupa, share profits 3:2. However, Popol is to receive a yearly bonus of 20% of
the profits, in addition to his profit share. The partnership made a net income for the year of 24,000
before the bonus. Assuming Popol’s bonus is computed on profit after deducting said bonus, how much
profit share will Kupa receive?

Response: 9,600

Correct answer: 8,000

Score: 0 out of 1 No

Question 7

 Salaries are nevertheless provided to the partners, if stipulated in the partnership agreement, even if
the partnership incurs loss.

Response: True

Correct answer: True

Score: 1 out of 1 Yes

Question 8

1. The statement of financial position of Moba Partnership on October 10, 2019 when it decided to
liquidate was as follows:

Cash 40,000   Accounts Payable 60,000

Other assets 125,000   Romel, Capital 45,000

      Shane, Capital 42,000

      Mara, Capital 18,000

TOTAL 165,000     165,000

 
 Assume the other assets with a book value of 90,000 are sold for 50,000 and that all available
cash, except for a 10,000 contingency fund, is distributed immediately. In this case:

Response: The cash should be distributed in the profit and loss ratio

Correct answer: Mara should receive 1,000

Score: 0 out of 1 No

Question 9

 Odette is trying to decide whether to accept a salary of 40,000 or a salary of 25,000 plus a bonus of
10,% of net income after salaries and bonus as a means of allocating profit among the partners. Salaries
traceable to the other partners are estimated to be 100,000. What amount of income would be
necessary so the Odette would considers the choices to be equal?

Response: 290,000

Correct answer: 290,000

Score: 1 out of 1 Yes

Question 10

 Myka and Jojo are partners who share profits and losses in the ratio of 60% and 40%, respectively.
Myka’s salary is 60,000 and 30,000 for Jojo. The partners are also paid interest on their average capital
balances. In 2019, Myka received 30,000 of interest and Jojo, 12,000. The profit and loss allocation is
determined after deductions for the salary and interest payments. If Jojo’s share in the residual income
was 60,000 in 2019, what was the total partnership income?

Response: 282,000

Correct answer: 282,000

Score: 1 out of 1 Yes

Question 11

 In partnership, there is co-ownership of profits, but the property invested into the firm remained with
the one who contributed it.

Response: False

Correct answer: False

Score: 1 out of 1 Yes

Question 12

1. On November 30, 2019, Alice, Pharsa and Vexana decided to liquidate AP Partnership. Their
capital balances and profit and loss on this date are as follows:
  

Alice, Capital 50,000 (40%)

Pharsa, Capital 60,000 (30%)

Vexana, Capital 20,000 (30%)

The net income from January to November 2019 is 44,000. On November  30, 2019, cash and liabilities
are 40,000 and 90,000, respectively.

For Alice to receive 55,200 in full settlement of his interest in the firm, how much must be realized from
the sale of the firm’s non-cash assets?

Response: 193,000

Correct answer: 193,000

Score: 1 out of 1 Yes

Question 13

 In the absence of stipulation, the share of each partner in the profits and losses shall be in proportion to
what he may have contributed

Response: True

Correct answer: True

Score: 1 out of 1 Yes

Question 14

1. After operating for five years, the books of the partnership of Balmond and Wanwan showed
the following balances:

Net assets 130,000

Balmond, Capital 85,000

Wanwan, Capital 45,000

If liquidation takes place at this point and the net assets are realized at book value, the partnership are
entitled to:

Response: Balmond, 85,000 ; Wanwan, 45,000

Correct answer: Balmond, 85,000 ; Wanwan, 45,000

Score: 1 out of 1 Yes

Question 15

 If the only the share of each partner in the profits has been agreed upon, the share of each in the losses
shall be based on their capital contribution.

Response: False

Correct answer: False

Score: 1 out of 1 Yes

Question 16

 Len, Jen and Ben are partners with average capital balances during 2019 of 360,000, 180,000 and
120,000, respectively. Partners receive 10% interest on their average capital balances. After deducting
salaries of 90,000 to Len and 60,000 to Ben the residual profit or loss is divided equally. In 2019, the
partnership sustained a 99,000 loss before interest and salaries to partners. By what amount should
Len's capital account change?

Response: 21,000 increase

Correct answer: 21,000 increase

Score: 1 out of 1 Yes

Question 17

 The partnership agreement of Magna and Nakao provides that interest at 10% per year is to be credited
to each partner on the basis of weighted-average capital balances. A summary of the capital account of
Nakao for the year ended December 31, 2019 is as follows:

Balance, January 1 .....420,000

Additional investment, Jul 1.....120,000
Withdrawal, Aug 1.....(45,000)
Balance, Dec 31 ..... 495,000

What amount of interest should be credited to Nakao's capital account for 2019?

Response: 46,125

Correct answer: 46,125

Score: 1 out of 1 Yes

Question 18
 Emma, a partner in the Asiones Partnership, has a 30% participation in the partnership profits and
losses. Emma's capital account has a net decrease of 1,200,000 during the calendar year 2019. During
2019, Emma withdrew 2,600,000 ( charged against her capital account) and contributed property valued
at 500,000 to the partnership. What was the net income of the Asiones Partnership for the year 2019?

Response: 3,000,000

Correct answer: 3,000,000

Score: 1 out of 1 Yes

Question 19

 Dissolution is the termination of business operations or the winding up of affairs.

Response: False

Correct answer: False

Score: 1 out of 1 Yes

Question 20

 The capital accounts for the partnership of Lou and Wis at October 31, 2019 are ass follows:
Lou, Capital ...... 80,000
Wis, Capital ...... 40,000

The partners share profits and losses in the ratio of 3:2, respectively.

The partnership is in desperate need of cash and the partners agree to admit Mart as a new partner with
1/3 in the capital and profits and losses upon his investment of 30,000. Immediately after Mart's
admission, what should be the capital balances of Lou, Wis and Mart respectively, assuming bonus is to
be recognized?

Response: 68,000; 32,000; 50,000

Correct answer: 68,000; 32,000; 50,000

Score: 1 out of 1 Yes

Question 21

 The ABC partnership provided for the following distribution of profits and losses:
- Firs, Alberto is to receive 10% of the net profit up to 1,000,000 and 20% on the amount in excess
thereof;
- Second, Bustos and Cancio each are to receive 5% of the remaining profit in excess of 1,500,000 after
Albert's share as per above; and
- The balance is to be divided equally among the partners.
For the year just ended, the partnership realized a net profit of 2,500,000 before distribution to
partners. How much is the share of Alberto in the profit of the partnership?

Response: 1,080,000

Correct answer: 1,080,000

Score: 1 out of 1 Yes

Question 22

 The partner is not entitled to any bonus if the partnership incurs loss

Response: True

Correct answer: True

Score: 1 out of 1 Yes

Question 23

 Eve and Margie are partners with capital balances of 60,000 and 20,000 respectively. Profits and losses
are divided in the ratio of 60:40. Eve and Margie decided to form a new partnership with Ruffa, who
invested land valued at 15,000 for a 20% capital interest in the new partnership. Ruffa's cost of land was
12,000. The partnership elected to use the bonus method to record the admission of Ruffa. Ruffa' capital
account should be credited for

Response: 19,000

Correct answer: 19,000

Score: 1 out of 1 Yes

Question 24

 The partners' capital and P&L ratio of Nunn, Owen , Park and Quan on May 31, 2019 were as follows:
Nunn(20%) .....60,000
Owen (20%) ..... 80,000
Park (20%) ..... 70,000
Quan (40%) ..... 40,000

On May 31, 2019, with the consent of Nunn, Owen andn Quan:
a. Park retired from the partnership and was paid 50,000 cash ini full settlement of his interest in the
partnership
b. Reed was admitted to the partnership with a 20,000 cash investment for a 10% interest in the net
assets of Nunn, Owen and Quan.

The capital account to be credited to Reed is:

Response: 22,000

Correct answer: 22,000

Score: 1 out of 1 Yes

Question 25

 Sizon, Torres and Velasco are partners in an accounting firm. Their capital account balances at yearend
were: Sizon, 50,000; Torres, 110,000; Velasco, 50,000. They share profits and losses on a 4:4:2 ratio after
the following terms:
- Velasco is to receive a bonus of 10% of net profit after bonus
- Interest of 10% shall be paid on that portion of a partner's capital in excess of P100,000
- Salaries of 10,000 and 12,000 shall be paid to partners Sizon and Velasco, respectively

Assuming a net profit of 44,000 for the year, the total profit share of Velasco was:

Response: 19,400

Correct answer: 19,400

Score: 1 out of 1 Yes

Question 26

 During liquidation, the owners’ interests are settled after the settlement of the outside creditors’
interests.

Response: False

Correct answer: True

Score: 0 out of 1 No

Question 27

Partners Sandra and Toni, who share equally in profits and losses have the following balance sheet as of
December 31, 2019:

Cash 120,000 Accounts payable 172,000

Accounts receivable 100,000 Accum Depn. 8,000

Inventory 140,000 Sandra, Capital 140,000

Equipment 80,000 Toni, Capital 120,000

Total 440,000 440,000

 
They agreed to incorporate their partnership, with new corporation absorbing the net assets after the
following adjustments: provision of allowance for bad debts of 10,000; restatement of the inventory at
its current fair value of 160,000; and recognition of further depreciation on the equipment of 3,000. The
corporation's capital stock is to have a  par value of P100 and the partners are to be issued
corresponding shares equivalent to their adjusted capital balances.

The total par value of the shares of capital stock that were issued to partners was:

Response: 267,000

Correct answer: 267,000

Score: 1 out of 1 Yes

Question 28

The following condensed balance sheet is presented for the partnership of Pinky, Gigi and Jasmin, who
share profits and losses in the ratio of 4:3:3, respectively:

Cash 160,000

Other assets 320,000

     TOTAL 480,000

Liabilities 180,000

Pinky, Capital 48,000

Gigi, Capital 216,000

Jasmin, Capital 36,000

    TOTAL 480,000

The partners agreed to liquidate the partnership after selling the other assets for 200,000. Upon
liquidation, Pinky should have received:

Response: 0

Correct answer: 0

Score: 1 out of 1 Yes

Question 29

 Voltaire and Assuncion are partners having capital balances of 150,000 and 180,000, respectively, and
sharing profits and losses equally. They admit Leonor to 1/3 interest in partnership capital and profits
and losses for investment of 195,000. If the asset revaluation method is used in recording the admission
of Leonor to the partnerhip:

Response: Leonor capital will be 175,000

Correct answer: Assuncion capital will be 210,000

Score: 0 out of 1 No

Question 30

 Larry, Marsha and Natalie are partners in a company that is being liquidated. They share profits and
losses 55%, 20% and 25% respectively. When the liquidation begins, they have capital account balances
of 108,000, 62,000 and 56,000 respectively. The partnership just sold equipment with historical cost and
accumulated depreciation of 25,000 and 18,000 respectively, for 10,000. What is the balance in
Marsha's capital account after the transaction is completed?

Response: 61,400

Correct answer: 62,600

Score: 0 out of 1 No

Question 31

 After operating for five years, the books of the partnership of Bop and By showed the following
balances:

Net assets , P169,000

Bo, capital, 110,500
By, capital, 58,500

If liquidation takes place at this point and the net assets are realized at book value, the partners are
entitled to:

Response: Bo to receive 110,500; By to receive 58,500

Correct answer: Bo to receive 110,500; By to receive 58,500

Score: 1 out of 1 Yes

Question 32

After all non-cash assets have been converted into cash in the liquidation of the Gamboa and Horacio
Partnership, the ledger contains the following balances:

  Debit Credit
 Cash 141,000  

Accounts Payable   96,000

Loan Payable to Gamboa   45,000

Gamboa, Capital 21,000  

Horacio, Capital   21,000

Available cash should be distributed with P96,000 going to accounts payable and

Response: P21,000 to Gamboa and P24,000 to Horacio

Correct answer: P24,000 to Gamboa and P21,000 to Horacio

Score: 0 out of 1 No

Question 33

 Under the bonus method, any increase (or decrease) in the capital of the new partner is a reduction (or
addition) to the capital of the existing partner.

Response: True

Correct answer: True

Score: 1 out of 1 Yes

Question 34

 As of December 31, 2019, the books of Ton Partnership showed capital balances of T 40,000; O 25,000
and N 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 T in the distribution of the 28,000 cash would be:

Response: 17,800

Correct answer: 17,800

Score: 1 out of 1 Yes

Question 35

1. Marge and Lorna entered in to a partnership on January 1, 2020 by investing the following
assets:
 

  Marge Lorna

Cash 15,000 -

Merchandise inventory - 45,000

Land - 15,000

Building - 65,000

Furniture and fixtures 100,000 -

The agreement between Marge and Lorna provides that profits and losses are to be divided into 40%
and 60%, respectively, and the partnership is to assume the P30,000 mortgage loan on the building.

If Lorna, is to receive a capital credit equal to his profit and loss ratio, how much cash should he invest?

Response: 172,500

Correct answer: 77,500

Score: 0 out of 1 No

Question 36

Camacho, Aspiras, Yumul and Lim, are partners sharing profits and losses equally. The partnership is
insolvent and is to be liquidated. The status of the partnership and each partner is presented below:

  Camacho Aspiras Yumul Lim

Partnership capital balances 150,000 100,000 (200,000) (300,000)

Personal assets (exclusive of partnership

1,000,000 300,000 800,000 10,000
interest)

Personal liabilities (exclusive of partnership

400,000 600,000 50,000 280,000
interest)

The partnership creditors:

Response: Have first claim to partnership assets before any partner’s personal creditors have rights to
the partnership assets
Correct answer: Have first claim to partnership assets before any partner’s personal creditors have
rights to the partnership assets

Score: 1 out of 1 Yes

Question 37

 Sizon, Torres and Velasco are partners in an accounting firm. Their capital account balances at yearend
were: Sizon, 50,000; Torres, 110,000; Velasco, 50,000. They share profits and losses on a 4:4:2 ratio after
the following terms:
- Velasco is to receive a bonus of 10% of net profit after bonus
- Interest of 10% shall be paid on that portion of a partner's capital in excess of P100,000
- Salaries of 10,000 and 12,000 shall be paid to partners Sizon and Velasco, respectively

Assuming a net profit of 22,000 for the year, the share of Velasco was :

Response: 13,400

Correct answer: 13,400

Score: 1 out of 1 Yes

Question 38

 Voltaire and Assuncion are partners having capital balances of 150,000 and 180,000, respectively, and
sharing profits and losses equally. They admit Leonor to 1/3 interest in partnership capital and profits
and losses for investment of 195,000. If the bonus method is used in recording the admission of Leonor
to the partnerhip:

Response: Voltaire will receive a bonus of 10,000

Correct answer: Voltaire will receive a bonus of 10,000

Score: 1 out of 1 Yes

Question 39

 Partner A contributed cash of 10,000 and land with carrying value of 50,000 and fair value of 70,000 to
a partnership. The credit to Partner A’s capital account in the partnership books is 60,000.

Response: False

Correct answer: False

Score: 1 out of 1 Yes

Question 40

 If there is a provision for division of profits but not losses in the partnership agreement, it is concluded
that:
 Response: Losses should be divided using the same approach as division of profits

Correct answer: Losses should be divided using the same approach as division of profits

Score: 1 out of 1 Yes

Question 41

 Having an unlimited liability is an advantage of a partnership.

Response: False

Correct answer: False

Score: 1 out of 1 Yes

Question 42

1. Helen and Joyce formed a partnership on June 1 and contributed the following assets:

  Helen Joyce

Cash 300,000 100,000

Land   300,000

The land was subject to a mortgage of P50,000, which was assumed by the partnership. Under
the contract of partnership, Helen and Joyce will share profit and loss in the ratio of 1/3 and 2/3,
respectively. Joyce’s capital account as at June 1 should be:

Response: 350,000

Correct answer: 350,000

Score: 1 out of 1 Yes

Question 43

 A partnership is an association of two or more persons who carry on as co-owners of a business for
profit. The persons who form the partnership may be:
I. Individuals
II. Corporations
III. Fraternal nonprofit organizations

Response: I, II and III

Correct answer: I only

Score: 0 out of 1 No

Question 44
1. On May 3, 2020, Bren and Beng formed a partnership with each contributing the following
assets:

  Bren Beng

Cash 30,000 70,000

Equipment 25,000 75,000

Building - 225,000

Furniture and fixture 10,000 -

The building is subject to a mortgage loan of P90,000 which is to be assumed by the partnership. The
partnership agreement provides that Bren and Beng share profits and losses 30% and 70%, respectively.

Assuming that the partners agreed to bring their respective capital in proportion to their respective
profit and losses ratio, and using Beng’s capital as the base, how much cash is to be additionally invested
by Bren?

Response: 55,000

Correct answer: 55,000

Score: 1 out of 1 Yes

Question 45

 Partner C contributed inventory costing 50,000 and with a net realizable value 40,000 to a partnership.
The related accounts payable of 10,000 will be assumed by the partnership. The net credit to Partner C’s
capital account in the partnership books is 30,000.

Response: True

Correct answer: True

Score: 1 out of 1 Yes

Question 46

 The partnership of Ela and Toffe was formed on April 1, 2020. ON this date, Ela invested 50,000 cash
and office equipment valued at 30,000. Toffe invested cash of 70,000, merchandise valued at 110,000
and furniture valued at 100,000, subject to notes payable of 50,000 (which the partnership assumes).
The partnership provides that Ela and Toffe share profits and losses 25:75, respectively. The agreement
further provides that the partners should initially have an equal interest in the partnership capital.
Under the bonus method, what is the total capital of the partnership after the formation?
Response: 310,000

Correct answer: 310,000

Score: 1 out of 1 Yes

Question 47

 Partners can't sell their capital.

Response: False

Correct answer: False

Score: 1 out of 1 Yes

Question 48

 Camille, Jam and RC are partners with capital balances on December 31, 2019 of P300,000, P300,000
and P200,000, respectively. Profit are shared equally. RC wishes to withdraw and it is agreed that she is
to take certain furniture and fixture with second hand value of 50,000 and note for the balances of her
interest. The furniture and fixtures are carried in the books at 65,000. Brand new, the furniture and
fixtures may cost 80,000. RC’s acquisition of the second-hand furniture will result to:

Response: Reduction in the capital of 5,000 each for Camille, Jam and RC

Correct answer: Reduction in the capital of 5,000 each for Camille, Jam and RC

Score: 1 out of 1 Yes

Question 49

 Nana, Angela and Rafaela were partners with capital balance on January 3, 2019 of P300,000, P200,000
and P100,000, respectively. On July 15, 2019, Nana retires from the partnership. ON the date of
retirement, the partnership net loss is 60,000 and the partners agreed that certain asset is to be
revalued at 80,000 from its original cost of 50,000. The partners agreed further to pay Nana 225,000 in
settlement of her interest. The remaining partners continue to operate under a new partnership.

What is the total capital of the new partnership?

Response: 345,000

Correct answer: 345,000

Score: 1 out of 1 Yes

Question 1
 12. Nana, Angela and Rafaela were partners with capital balance on January 3, 2019 of P300,000,
P200,000 and P100,000, respectively. On July 15, 2019, Nana retires from the partnership. ON the date
of retirement, the partnership net loss is 60,000 and the partners agreed that certain asset is to be
revalued at 80,000 from its original cost of 50,000. The partners agreed further to pay Nana 225,000 in
settlement of her interest. The remaining partners continue to operate under a new partnership.

What is the total capital of the new partnership?

Response: 345,000

Correct answer: 345,000

Score: 1 out of 1 Yes

Question 2
1. Lito and Dennis are partners who share profits and losses in the ratio of 7:3, respectively. On
October 9, 2020, their respective capital accounts were as follows:

Lito 35,000

Dennis 30,000

On that day they agreed to admit Dante as a partner with a one third interest in the capital and
profits and losses, and upon his investment of 25,000. The new partnership will begin with a total
capital of 90,000. Immediately after Dante’s admission, what are the capital balances of Lito,
Dennis and Dante:

Response: 31,500;      28,500;        30,000

Correct answer: 31,500;      28,500;        30,000

Score: 1 out of 1 Yes

Question 3
1. Partners Romel, Shane and Mara share profits and losses 50:30:20, respectively. The books of
the partnership as at June 30, 2020 follows:

Cash 40,000   Accounts Payable 100,000

Other assets 360,000   Romel, Capital 74,000

      Shane, Capital 130,000

       Mara, Capital 96,000

TOTAL 400,000     400,000

The assets and liabilities are recorded and presented at their respective fair values. Cris is to be
admitted as a new partner with a 20% interest and a 20% share in the profits and losses in
exchange for a cash contribution. How much cash should Cris contribute?

Response: 75,000

Correct answer: 75,000

Score: 1 out of 1 Yes

Question 4
 Mercado and Puzon have capital balances at the beginning of the year of 600,000 and 675,00. They
share profits as follows:
i. Interest of 8% on the beginning capital balances
ii. Salary allowances of 150,000 to Mercado and 120,000 to Puzon
iii. Balance in the ratio of 3:2
The partnership realized a profit of 375,000 during the year before interest and salary allowances.

How much will each partner receive from the profit?

Response: Mercado – 166,500 ; Puzon – 185,500

Correct answer: Mercado – 179,500 ; Puzon – 185,500

Score: 0 out of 1 No

Question 5
 Nilo and Lorenz just formed a partnership. Nilo contributed cash of 320,000 and office equipment that
cost 160,000. The computer had been used in his sole proprietorship and had been depreciated to
65,000. The fair value of the office equipment is 78,000. Nilo also contributed a note payable of 150,000
to be assumed by the partnership. Nilo is to have 60% interest in the partnership. Lorenz contributed
only 150,000 cash.

Nilo should make an additional investment (withdrawal) of:

Response: 225,000

Correct answer: (23,000)

Score: 0 out of 1 No

Question 6
 Cassie, an active partner in the Golden Chain partnership received an annual bonus of 25% of the
partnership income after deducting the bonus. For the year ended, December 31, 2019, the partnership
income before the bonus amounted to 240,000. The bonus of Cassie for the year 2019 is:

Response: 48,000

Correct answer: 48,000

Score: 1 out of 1 Yes

Question 7
1. On February 1, 2020, Popoy and Basha formed a partnership with each contributing the
following assets:

  Popoy Basha

Cash P50,000 P90,000

Machinery and equipment 35,000 45,000

Building - 280,000

Furniture and fixtures 12,500 -

The building is subject to a mortgage loan of P76,000 which the partnership will not assume. The
partnership agreement provides that Popoy and Basha share profits and losses 40% and 60%,
respectively. On February 1, 2020 the balance in Basha’s capital account should be:

Response: 415,000

Correct answer: 415,000

Score: 1 out of 1 Yes

Question 8
1. On December 31, 2019, the condensed statement of financial position of ABC Partnership is
presented below:

 
 Total Assets 180,000

   

Amy, Loan 10,000

Amy, Capital 45,000

Bea, Capital 40,000

Cat, Capital 85,000

Total 180,000

Amy, Bea and Cat share profits and losses in the ratio of 3:2:1, respectively. It was agreed among
the partners that Amy retires from the partnership and the partnership’s asset to be adjusted to
their fair value of 210,000. The partners further agreed to pay Amy 64,000 cash for her total
interest in the partnership.

What is the capital balance of Cat after retirement of Amy?

Response: 92,000

Correct answer: 92,000

Score: 1 out of 1 Yes

Question 9
 The partnership of Ela and Toffe was formed on April 1, 2020. ON this date, Ela invested 50,000 cash
and office equipment valued at 30,000. Toffe invested cash of 70,000, merchandise valued at 110,000
and furniture valued at 100,000, subject to notes payable of 50,000 (which the partnership assumes).
The partnership provides that Ela and Toffe share profits and losses 25:75, respectively. The agreement
further provides that the partners should initially have an equal interest in the partnership capital.
Under the bonus method, what is the total capital of the partnership after the formation?

Response: 310,000

Correct answer: 310,000

Score: 1 out of 1 Yes

Question 10
 JolliBae and ChowPrince formed a partnership on January 1, 2019 with JolliBae contributing 16,000 cash
and ChowPrince contributing equipment with a book value of 6,400 and a fair value of 8,000. During
2019, ChowPrince made additional investments of 1,600 on April 1 and 1,600 on June 1, and on
September 1, he withdrew 4,000. JolliBae had no additional investment nor withdrawal during the year.
The weighted average capital balance at the end of 2019 for ChowPrince is:

Response: 8,800

Correct answer: 8,800

Score: 1 out of 1 Yes

Question 11
1. The capital account for the partnership of Karl and Bing at May 31, 2020 are as follows:

Karl 80,000

Bing 40,000

The partners share profits and losses in the ratio of 6:4, respectively.

The partnership is in desperate need of cash, and the partners agree to admit Hazel as a
partner with 1/3 in the capital and profits and losses upon his investment of 30,000.
Immediately after Hazel’s admission, what should be the capital balance of Karl, Bing and
Hazel?

Response: 68,000;                 32,000;                 50,000

Correct answer: 68,000;                 32,000;                 50,000

Score: 1 out of 1 Yes

Question 12
 Miya, Layla and Karrie formed a partnership on November 1, 2020. They agree that Miya will contribute
office equipment with a carrying amount of 45,000 with fair value of 53,000; Layla will contribute
delivery equipment with fair value of 75,000; and Karrie will contribute cash. If Karrie one-fourth
interest in the capital and profits, she should contribute cash of:

Response: 42,667

Correct answer: 42,667

Score: 1 out of 1 Yes

Question 13
 Henry, Marta and Nestor are partners with average balances in 2019 of P240,000, P120,000 and 80,000,
respectively. Partners receive 10% interest on their average capital balances. After deducting salaries of
60,000 to Henry and 40,000 to Nestor, the residual profit or loss is divided equally. In 2019, the
partnership sustained a 66,000 net loss before interest and salaries to partners. By what amount should
Nestor’s capital account change?

Response: 22,000 decrease

Correct answer: 22,000 decrease

Score: 1 out of 1 Yes

Question 14
 On January 1, 2019, Toni, Ernesto and Joseph formed a partnership. Toni contributed cash of 100,000
and a delivery equipment with original cost of 120,000 and a fair value of 50,000. Ernesto contributed
160,000 cash. Joseph contributed office equipment with historical cost of 100,000 and fair value of
120,000. The partnership earned profit of 120,000 in 2019. How much should be the adjusted capital
balances of the partners at the end of 2019?

Response: Toni - 150,000 ; Ernesto - 160,000 ; Joseph - 120,000

Correct answer: Toni -191,861 ; Ernesto – 204,651 ; Joseph – 153,488

Score: 0 out of 1 No

Question 15
 Camille, Jam and RC are partners with capital balances on December 31, 2019 of P300,000, P300,000
and P200,000, respectively. Profit are shared equally. RC wishes to withdraw and it is agreed that she is
to take certain furniture and fixture with second hand value of 50,000 and note for the balances of her
interest. The furniture and fixtures are carried in the books at 65,000. Brand new, the furniture and
fixtures may cost 80,000. RC’s acquisition of the second-hand furniture will result to:

Response: Reduction in the capital of 5,000 each for Camille, Jam and RC

Correct answer: Reduction in the capital of 5,000 each for Camille, Jam and RC

Score: 1 out of 1