Solutions and Answer Keys

1 - 5 DCCAB
6 - 10 BDCDC
11 - 15 ADBBA
16 - 20 CCBAD
21 - 25 CABDC
26 - 30 AACAD

4
(a) P 89,000 in the Acc. Depn. was entered as P 80,900

(b)
(c) PP 9,000
4,050 in
in the
advertising expense
Office Equip. waswas credited
entered as debit of P 900

(d) P 16,200 in the Unexpired Insurance was entered as credit

6 Rent income per month (50K/4 months) = 12.5K

Unearned portion [50K- (12.5K x 3 months)]
Using income method:
Rent income
Unearned Rent income

7 Cash, Nov. 1
Increase in operating cash flows
Decrease in investing cash flows
Increase in financing cash flows
Cash, Nov. 31

8 Required allowance [150K x (100% -97%)]

Less: Allow. For DA before adjustments
Doubtful accounts expense
Doubtful accounts expense
Allowance for doubtful accounts

9 Service income
Commission income
Salaries expense
Rent expense
Taxes & license expense
Supplies expense
Net income

11 Amount to be paid within the discount period (16.512k x 85% x 90% x 95% x 98%

12 Beginning inventory
Add: Net Purchase
Purchase
 Add/(less): Freight-in
Purchase returns & allow.
Purchase discounts
Total Goods Available for Sale
Less: Ending Inventory (SQUEEZE)
Cost of Sales

17 Becky cash investment

Lavinia's contributed equip.
Notes payable related to equip. assumed by partnership
Total contributed capital
Divided equally (as agreed capital interest)
Capital credited to Princess Sarah

18 Investment by Kal
Divided by Kal's interest
Total Partnership Capital
Multiplied by Kyu's interest
Capital credited to Kyu

19
Agreed capital
Bes (800K x 40%); Tee (800K x 60%)
Contributed capital
Bes (94K + 270K - 15K); Tee (240K + 120K)
Additional contributions/(withdrawal)

21
Salary allowance
Interest on capital contribution
Bonus
Sharing of the remaining balance
(50,000) - 264,000 - 36,000
= (350,000)
Mario: (350,000) x 60%
Luigi: (350,000) x 40%

22 -23
Salary allowance
Interest on weighted ave. capital
Bonus
Sharing of the remaining balance
60:40 ratio

Super Date
 Original contribution Jan. 1, 2022
Permanent withdrawal Apr. 1, 2022
Additional investments Dec. 1, 2022

Cute Date

Original contribution Jan. 1, 2022

Permanent withdrawal Oct. 1, 2022
Additional investments Dec. 1, 2022

Cute
Cap. Before closing 58,000
Net income (SQUEEZE) 82,000
Regular drawings -
Ending Cap 140,000

24
Capital bal. before withdrawal of F
Cash paid to F
Bonus to F (shared by old partners 3:3:2)
Capital bal. after withdrawal of F
Capital ratio after withdrawal of F

25 Dy capital credit in the admission (400K Ey's Capital x 20%)

Ey Capital
Dy Capital

26
Capital bal. before adjustment
Adjustments: (60:40 sharing)
Allowance for bad debts
Understatement of inventory
Addt'l depreciation on equipment
Capital bal. as adjusted for incorporation of partnership
Divided by par value
Shares issued

28
Capital Balances before distribution of cash
Add/(Less): Receivable/(payable)- partners
Total Partner's Interest
Divide by P/L ratio
Maximum Loss Absorption Balances
 Priority Payments to be made to partners
First Priority
Taffy [(P 40,000 - P 30,000) x 10%]
Total
Cash available to partners (40K assumed realized - 5K liabilities) = 35K
Payment to partners
First priority
Remainder: equally (35k - 5k)

29
Capital Balances before distribution of cash
Add/(Less): Receivable/(payable)- partners
Total Partner's Interest
Divide by P/L ratio 3:2:1
Maximum Loss Absorption Balances
Priority Payments to be made to partners
First Priority
T [(P 80,000 - P 75,000) x 3/6]
Second Priority
T [(P 75,000 - P 30,000) x 3/6]
O [(P 75,000 - P 30,000) x 2/6]
Total
Cash available to partners: 28K
Payment to partners
First priority
Second priority 3:2 (28k - 2.5k)

30
Capital Balances before distribution of cash
Add/(Less): Receivable/(payable)- partners
Total Partner's Interest
Divide by P/L ratio 5:3:2
Maximum Loss Absorption Balances
Priority Payments to be made to partners
First Priority
A [(P 4,000,000 - P 3,333,333) x 20%]
Second Priority
A [(P 3,333,333 - P 400,000) x 20%]
P [(P 3,333,333 - P 400,000) x 30%]
Total
Cash available to partners: (3.2M + 2.2M - 100K - 4M) = 1.3M
Payment to partners
First priority
Second priority 3:2 (1.3M - 133.333k)
 (Debit - Credit)
Debit Credit
d as P 80,900 Difference
(8,100) 8,100
ed as debit of P 900 (4,050) 4,050 (8,100)
(8,100) (8,100)
was entered as credit (16,200) 16,200 (32,400)

12,500

₱ 12,500
12,500

₱ 33,330
5,142
(22,789)
2,240
₱ 17,923

₱ 4,500
2,000
2,500
₱ 2,500
2,500

₱ 63,245
46,788
(35,500)
(14,766)
(7,146)
(389)
₱ 52,232

eriod (16.512k x 85% x 90% x 95% x 98%) ₱ 11,760

₱ 315,123

₱ 502,280
 11,417
(23,394)
(17,750) 472,553
787,676
350,648
437,028

70,000
110,000
by partnership (30,000)
150,000
3
₱ 50,000

₱ 1,400,000
70%
₱ 2,000,000
30%
₱ 600,000

Bes Tee Total

₱ 320,000 ₱ 480,000 ₱ 800,000

349,000 360,000 709,000

(29,000) 120,000 91,000

Mario Luigi Total

144,000 120,000 264,000
24,000 12,000 36,000

(210,000) (210,000)
(140,000) (140,000)
(42,000) (8,000) (50,000)

Super Cute Total

96,000 72,000 168,000
7,300 5,000 12,300
3,125 3,125

7,500 5,000 12,500

113,925 82,000 195,925

Amount Mo. Weighted Ave.

Outstanding Capital
 80,000 x 12/12 80,000
(10,000) x 9/12 (7,500)
6,000 x 1/12 500
Total 73,000

Amount Mo. Weighted Ave.

Outstanding Capital
50,000 x 12/12 50,000
(4,000) x 3/12 (1,000)
12,000 x 1/12 1,000
Total 50,000

Super Before Bonus

76,000 Bonus = 0.20 (NI - Salaries - Interest)
113,925 B = 0.20 [(12.5K + 180.3K + B) - 180.3K]
- B = 0.20 (192.8K + B - 180.3K)
189,925 B = 0.20 (12.5K + B)
B = 2.5K + 0.2B
0.8B = 2.5K
B = 3,125

J Z F M Total
129,750 108,750 80,000 71,500 390,000
(90,000) (90,000)
(3,750) (3,750) 10,000 - 2,500 -
126,000 105,000 - 69,000 300,000
42% 35% 23% 100%

y's Capital x 20%) ₱ 80,000

₱ 80,000
80,000

Gon Kilua Total

56,120 47,880 104,000

(2,400) (1,600) (4,000)

4,800 3,200 8,000
(720) (480) (1,200)
of partnership 57,800 49,000 106,800
P 100 P 100 P 100
578 490 1,068

Taffy Dotty
20,000 15,000

20,000 15,000
50% 50%
40,000 30,000
 5,000
5,000 -
realized - 5K liabilities) = 35K

5,000
15,000 15,000
20,000 15,000

T O N
40,000 25,000 5,000

40,000 25,000 5,000

3/6 2/6 1/6
80,000 75,000 30,000

2,500

22,500
15,000
25,000 15,000 -

2,500
15,300 10,200
17,800 10,200 -

C P A
200,000 1,000,000 800,000

200,000 1,000,000 800,000

50% 30% 20%
400,000 3,333,333 4,000,000

133,333

586,667
880,000
- 880,000 720,000
- 100K - 4M) = 1.3M

133,333
700,000 466,667
- 700,000 600,000