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Problem 4: Multiple Choice - Computational

This document contains 15 multiple choice computational problems involving calculations of capital accounts for partners in partnerships. The problems involve calculations of partner investments, capital credits, bonuses, and adjustments to capital accounts based on profit/loss sharing percentages and other partnership transactions and asset revaluations.

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1K views5 pages

Problem 4: Multiple Choice - Computational

This document contains 15 multiple choice computational problems involving calculations of capital accounts for partners in partnerships. The problems involve calculations of partner investments, capital credits, bonuses, and adjustments to capital accounts based on profit/loss sharing percentages and other partnership transactions and asset revaluations.

Uploaded by

KATHRYN CLAUDETTE RESENTE
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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PROBLEM 4: MULTIPLE CHOICE – COMPUTATIONAL

1. C
Solution:
Net assets before D’s admission P 1,400,000
(620,000+400,000+380,000)
Divide by: (100%-20%) 80%
Net Assets after D’s admission 1,750,000
Multiply by: D’s interest 20%
D’s Investment P 350,000

2. B
A, Capital P 139,200
B, Capital 208,800
C, Capital 96,000
Net assets before Admission 444,000
Multiply: D’s interest 20%
Capital Credit given to D P 88,800

Payment of D P 132,000
C, Capital (88,800)
Net assets before Admission P 43,200

3. C
A, Capital P 200,000
B, Capital 100,000
Net assets before Admission 300,000
Investment of C 150,000
Net Asset after Admission 450,000
Multiply by: C’s interest 50%
C’s capital credit 225,000
C’s Investment (150,000)
Bonus to C 75,000

A B C Total
Capital, before admission 200,000 100,000 P 300,000
C’s investment 150,000 150,000
Bonus to C (56,250) (18,750) 75,000
(75,000 x ¾)
(75,000 x ¼)
Capital, after admission 143,750 81,250 225,000 450,000
4. A
Net Asset after Admission 425,000
Multiply by: C’s interest 25%
C’s capital credit 106,250
C’s Investment (125,000)
Bonus to old partners 75,000

A B C Total
Capital, before 200,000 100,000 P 300,000
admission
C’s investment 125,000 125,000
Bonus 14,062.50 4,687.50 (18,750) -
(18,750 x ¾)
(18,750 x ¼)
Capital, after admission 214,062.50 104,687.5 106,250.0 425,000
0 0

5. B
Capital credit of new partner P 20,000
(100,000 x 20%)
New partner’s investment (18,000)
Bonus to new partner 2,000

6. C
Ming, Capital P 80,000
Piw, Capital 40,000
Net assets before Admission 120,000

Net assets before Admission P 120,000


Investment of Andre 30,000
Net Assets after Admission 150,000
Multiply by: Andre’s interest 1/3
Andre’s capital credit 50,000
Andre’s Investment (30,000)
Bonus to Andre 20,000

Ming Piw Andre Total


Capital, before admission 80,000 40,000 120,000
Andre’s investment 30,000 30,000
Bonus to Andre (12,000) (8,000) 20,000
(20,000 x 3/5)
(20,000 x 2/5)
Capital, after admission 68,000 32,000 50,000 150,000
7. B
A, Capital P320,000
B, Capital P320,000

8. A
A B C Total
Capital, before 320,000 192,000 128,000 640,000
withdrawal
Payment to A (360,000) (360,000)
Bonus to A 40,000 (24,000) (16,000)
Capital, after withdrawal - 168,000 112,000 280,000

9. A
Happy, Capital P 60,000
Sad, Capital 20,000
Net assets before Admission 80,000

Net assets before Admission P 80,000


Divide by: (100%-20%) 80%
Net Assets after Admission 100,000
Multiply by: Angry’s interest 20%
Andre’s Investment 20,000

Happy Sad Angry Total


Capital, before admission 60,000 20,000 80,000
Angry’s Investment 20,000 20,000
Capital, after admission 60,000 20,000 20,000 100,000

10. D
Kern, Capital P 60,000
Pate, Capital 20,000
Net assets before Admission 80,000

Net assets before Admission P 80,000


Investment of Grant 15,000
Net Assets after Admission 95,000
Multiply by: Grant’s interest 20%
Grant’s capital credit 19,000
Grant’s Investment (15,000)
Bonus to Grant 4,000

11. D
A B C Total
Unadjusted balance 300,000 500,000 200,000 1,000,000
Share in Profit 360,000 540,000 900,000 1,800,000
(1,800,000 x 20%)
(1,800,000 x 30%)
(1,800,000 x 50%)
Share in Revaluation 120,000 180,000 300,000 600,000
(600,000x 20%)
(600,000 x 30%)
(600,000 x 50%)
Adjusted balance 780,000 1,220,000 1,400,000 3,400,000

A B C Total
Capital, before 780,000 1,220,000 1,400,000 3,400,000
withdrawal
Payment to C (1,600,000) (1,600,000)
Bonus to C (80,000) (120,000) 200,000
Capital, after withdrawal 700,000 1,100,000 - 1,800,000

12. C
A B C Total
Unadjusted balance 300,000 300,000 200,000 800,000
Share in Revaluation (5,000) (5,000) (5,000) (15,000)
(65,000-50,000/3)
Adjusted balance 295,000 295,000 195,000 785,000

13. D
Share of C in revaluation (P 5,000)
FV of the Furniture (debit balance) (50,000)
Net Decrease in C’s capital (55,000)

14. C
C’s Capital P 200,000
Less: Share of C in (5,000)
Revaluation
Adjusted Capital of C 195,000
Less: Fair Value of the (50,000)
Furniture
Value of notes issued to C P 145,000

15. B
A’s Capital P 140,000
B’s Capital 120,000
Net Assets Before Admission 260,000

Net Assets Before Admission P 260,000


Add: Increase in Inventory 20,000
Less: Bad Debt Expense (10,000)
Depreciation – Eqpt. (3,000)
Adjusted Capital after incorporation P 267,000

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