Reference no: EM132946047
Questions -
Q1. The capital accounts for the partnership of LL and MM at October 31, 2020 are as follows: LL Capital - P80,000.00; MM Capital - P40,000.00. The partners share profit and loss in the ratio of 3:2 respectively. The partnership is in desperate need of cash, and the partners agree to admit NN as a partner with one-third in the capital and profits and losses upon his investment of P30,000.00. Immediately after NN's admission, what should be the capital balances of LL, MM and NN respectively, assuming bonus is to be recognized?
a. P50,000.00; P50,000.00; P50,000.00
b. P60,000.00; P60,000.00; P60,000.00
c. P66,667.00; P33,333.00; and P50,000.00;
d. P68,000.00; P32,000.00; P50,000.00
Q2. D and J are partners agreeing to allow an interest of 6% on the capital investment at the beginning of the year, P300,000.00 and P230,000.00, respectively. And a monthly salary of P6,000.00 to D and J would be given an appropriate salary so that D will receive P58,100.00 at eth end of the year. Any remaining balance will be shared by the partners equally. The first year of operation yielded a net income of P100,000.00. What is the total salary allowance given for the year?
a. P60,000.00
b. P132,000.00
c. P31,800.00
d. P63,800.00
Q3. CC, PP and AA accountants agreed to form a partnership and to share profits in the ratio of 5:3:2. They also agreed that AA is to be allowed a salary of P28,000.00, and that PP is to be guaranteed P21,000.00 as his share of the profits. During the first year of operations, income from fees are P180,000.00, while expenses total, P96,000.00. what amount of a net income should be credited to each partner's capital accounts CC, PP and AA respectively?
a. P28,000.00; P16,800.00; P11,200.00
b. P25,000.00; P21,000.00; P38,000.00
c. P24,000.00; P22,000.00; P38,000.00
d. P25,000.00; P21,000.00; P39,000.00
Q4. Paul and Marie agreed to form a partnership with total agreed capital contribution of P500,000.00 cash. Partner Marie would be an industrial partner to receive 30% profit sharing. Which of the following is correct?
a. The total capital of Paul is P350,000.00
b. The total capital of Marie is P0.00
c. The journal entry to record the contribution of Paul includes credit of capital P350,000.00
d. The journal entry to record the contribution of Maria includes debit of cash P150,000.00
Q5. GG admits HH for partnership interest in his business. The balance sheet accounts of GG on November 30, 2020, prior to the the admission of GG are as follows: balances: a) Cash - Unknown; b) Accounts Receivable - P96,000.00; Merchandise Inventory - P144,000.00; d) Accounts payable - P49,600.00; and GG, Capital - unknown; It is agreed that for purpose of establishing GG's interest, the following adjustments shall be made: a) An allowance for doubtful accounts of 2% of accounts receivable is to be established; b) The merchandise inventory is to be valued at P160,000.00; c) Prepaid salary expenses of P5,200.00 and accrued expenses of P3,200.00 are to be recognized. HH is to invest cash of P113,640.00 to give him a 1/3 interest in the partnership. The total assets at the partnership after the formation is:
a. P393,720.00
b. P340,920.00
c. P291,320.00
d. P309,520.00
Q6. Rose, Susie and Tina are partners sharing profits on a 5:3:2 ratio. On January 1, 2020, Vienna was admitted into the partnership with a 20% share in profits. The old partners continue to participate in profits in their original ratios. For the year 2020, the partnership book showed a net income of P25,000.00. It was disclosed however, that the following errors were committed: a) Accrued expense in 2019 not recorded at year-end - P1,200.00; b) Inventory overstated in 2020 - P3,100.00; c) Purchases in 2020 not recorded for which goods have been received and inventories - P2,000.00; d) 2019 Income received in advance not adjusted - P1,500.00; e) Unused supplies of 2020 not taken up at year-end - P900;. The share of partner Rose in the 2020 corrected net income is?
a. P9,400.00
b. P10,000.00
c. P11,750.00
d. P12,500.00
Q7. On January 1, 2020 AA and BB formed a partnership by contributing cash of 50,000.00 and P40,000.00, respectively. They have agreed to give AA 60% interest in capital and BB 40% interest in profit and losses. Since January 1, 2020, the following events have occurred for the partnership. On April 1, 2020, after charging the old partners' capital their share from a loss of P15,000.00 for the 1st quarter, CC was taken in as a partner by purchasing 20% partnership interest, proportionately from AA and BB as agreed among the partners. CC paid a total of P12,000.00 for the purchased interest and was given a 20% interest in profits. The old partners have agreed to maintain their old profit and loss ratio. How much is the capital of AA and new profit and loss ratio after CC's admission by purchased interest on April 1, 2020?
a. Capital, P37,200.00 and 40% PL
b. Capital, P28,200.00 and 50% PL
c. Capital, P22,800.00 and 20% PL
d. Capital, P27,300.00 and 50% PL
Q8. D and E entered into a partnership on February 1, 2020 by investing the following: From D, Cash - P15,000.00 and Furniture and Fixtures - P100,000.00; From E, Inventory - P45,000.00, Land - P15,000.00 and Building P65,000.00. The agreement between D and E provides that profit and losses are to be divided into 40% and 60% to D and E, respectively. The partnership is to assume the P30,000.00 mortgage loan on the building. Assuming that E invests P50,000.00 cash and each partner is to be credited for the full amount of the net assets invested. What is the total capital of the partnership?
a. P210,000.00
b. P250,000.00
c. P260,000.00
d. P290,000.00
Q9. The partnership of X and Y provides for equal sharing of profits and losses. Prior to the admission of a third partner, Z, the capital account of X is P75,000.00, and Y is P105,000.00. Z invests P90,000.00 for a P75,000.00 interest and partners agreed that the net assets of the new partnership would be P270,000.00. Which of the following statement is true?
a. Asset revaluation to old partners of P15,000.00
b. Bonus to new partner of P15,000.00
c. Bonus to old partner of P15,000.00
d. Asset revaluation to new partner of P15,000.00