1. The condensed balance sheet of Alex, Jay and John, as of March 31, 2011 follows:

Cash P 28,000 Liabilities P 48,000

Other assets  265,000 Alex, capital  95,000

 Jay, capital  80,000

                  John, capital    70,000

Total assetsP293,000 Total equitiesP293,000

The income and loss ratio is 50:25:25, respectively. The partners voted to dissolve their partnership and

liquidate by selling the other assets in installments. The amount of P70,000 was realized to the first cash

sale of other assets with a book value of P150,000. After settlement with creditors all cash available was

distributed to the partners. How much was received by John in the cash distribution?

a.P30,000 c. P21,250

b.P20,000 d. P31,250

John received total cash distribution of P20,000, computed as follows:

AlexJayJohn

 Capital balances P95,000 P80,000 P70,000

 Loss on realization of other

 assets at 2:1:1

 (P150,000 – P 70,000) (40,000) (20,000) (20,000)

 Theoretical loss on

  remaining other assets

  (P265,000-P150,000)(57,500)(28,750)(28,750)

 Adjusted capital balances P( 2,500) P31,250 P21,250

 Deficiency of Alex      2,500 (   1,250) (   1,250)

 Cash distribution basis P - 0 -  P30,000P20,000

2. Jo, Lee, and Vi are partners sharing profits 30%, 20%, and 50%, and with capital balances of

P350,000, P250,000, and P350,000, respectively. The partners agreed to dissolve their

partnership and, upon liquidation, all of the partnership’s assets are sold and sufficient cash is

realized to pay all claims except one for P50,000. Vi is personally insolvent, but the other two

partners are capable of meeting any indebtedness of the firm. Of the remaining claim against

the firm, Jo is to absorb:

a.P15,000

b.P25,000

c.P30,000

d.P40,000

 Jo should absorb P40,000 of the remaining claim against the firm computed as follows:

TotalJoLeeVi

Capital balances P 950,000 P350,000 P250,000  P350,000

Realization loss(1,000,000)(300,000)(200,000) (500,000)

 P( 50,000) P 50,000 P 50,000P (150,000)

Vi’s deficiency, 3:2      -          (  90,000) (60,000) 150,000

Liability for unpaid

 Claim P( 50,000)P( 40,000) P( 10,000) P –0-

3. On October 31, 2011, Ivy, Irma, and Irene, who share earnings 5:3:2 respectively, decided to

liquidate their partnership at which time their condensed balance sheet was as follows:

Cash  P 50,000 Liabilities P 60,000

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The condensed balance sheet of Alex, Jay and John, as of March 31, 2011 follows: Cash P 28,000 Liabilities P 48, Other assets 265,000 Alex, capital 95, Jay, capital 80, John, capital 70, Total assets P293,000 Total equities P293, The income and loss ratio is 50:25:25, respectively. The partners voted to dissolve their partnership and liquidate by selling the other assets in installments. The amount of P70,000 was realized to the first cash sale of other assets with a book value of P150,000. After settlement with creditors all cash available was distributed to the partners. How much was received by John in the cash distribution? a. P30,000 c. P21, b. P20,000 d. P31, John received total cash distribution of P20,000, computed as follows: Alex Jay John Capital balances P95,000 P80,000 P70, Loss on realization of other assets at 2:1: (P150,000 – P 70,000) (40,000) (20,000) (20,000) Theoretical loss on remaining other assets (P265,000-P150,000) (57,500) (28,750) (28,750) Adjusted capital balances P( 2,500) P31,250 P21, Deficiency of Alex 2,500 ( 1,250) ( 1,250) Cash distribution basis P - 0 - P30,000 P20,
Jo, Lee, and Vi are partners sharing profits 30%, 20%, and 50%, and with capital balances of P350,000, P250,000, and P350,000, respectively. The partners agreed to dissolve their partnership and, upon liquidation, all of the partnership’s assets are sold and sufficient cash is realized to pay all claims except one for P50,000. Vi is personally insolvent, but the other two partners are capable of meeting any indebtedness of the firm. Of the remaining claim against the firm, Jo is to absorb: a. P15, b. P25, c. P30, d. P40, Jo should absorb P40,000 of the remaining claim against the firm computed as follows: Total Jo Lee Vi Capital balances P 950,000 P350,000 P250,000 P350, Realization loss (1,000,000) (300,000) (200,000) (500,000) P( 50,000) P 50,000 P 50,000P (150,000) Vi’s deficiency, 3:2 - ( 90,000) (60,000) 150, Liability for unpaid Claim P( 50,000) P( 40,000) P( 10,000) P –0-
On October 31, 2011, Ivy, Irma, and Irene, who share earnings 5:3:2 respectively, decided to liquidate their partnership at which time their condensed balance sheet was as follows: Cash P 50,000 Liabilities P 60,

Other assets 250,000 Ivy, capital 80, Irma, capital 90, Irene, capital 70, Total assets P300,000 Total equities P300, If the first cash sale of assets booked at P150,000 resulted in net realization of P120,000, the amount to be distributed to Irene would be: a. P15, b. P44, c. P51, d. P60, If the first cash sale of assets booked at P150,000 resulted in net realization of P120,000, the amount to be distributed to Irene would be P44,000, computed as follows: Irene’s capital P70, Less: Share in: Realization loss: (P150,000 – P120,000) x 20% P 6, Possible loss on remaining other assets: (P250,000 – P150,000) x 20% 20,000 26, Irene’s share in first cash distribution P 44,

Dan, Ely, and Fil decided to dissolve their partnership on May 31, 2011. On this date, their capital balances and profit-sharing per cents were as follows: Dan P50,000 40% Ely 60,000 30% Fil 20,000 30% The net income from January 1 to May 31, 2011 was P44,000. Also on May 31, 2011, the partnership’s cash and liabilities, respectively were P40,000 and P90,000. For Dan to receive P55,200 in full settlement of his interest in the partnership, how much must be realized from the sale of the partnership’s non-cash assets? a. P177, b. P187, c. P190, d. P193, For Dan to receive P55,200 in full settlement of his interest in the partnership, P193,000 must be realized from the sale of the partnership’s non-cash assets, computed as follows: Partners’ capital P130, Liabilities 90, Cash ( 40,000) Non-cash assets P180, Dan’s desired share in settlement P55, Less: Dan’s capital balance 50, Dan’s share in estimated realization gain P 5, Non-cash assets P180,

building is subject to a P40,000 mortgage that the partnership will assume. What amount of cash should Pearl contribute? a. P40, b. P80, c. P110, d. P15, The problem implies that the contribution of Emil is already adequate to entitle him to a 60% share in the total agreed capital of the partnership. Hence, the total agreed capitalization shall be based on his contribution of P300,000 or P500,000 (P300,000 ÷ 60%). The agreed capital of Pearl is 40% of P500,000 or P200,000 and her cash contribution shall be equal to the difference between this amount (P200,000) and the net fair value of the noncash assets she invested. The net fair value of the other assets contributed by Pearl is equal to P120,000, (P70,000 + P90,000 – P40,000). Therefore, her cash contribution should be equal to P80,000 (P200,000 – P120,000).

AA and Belen formed a partnership and they agreed to share initial capital equally, although AA contributed P150,000 and Belen contributed P126,000 in identifiable assets. Under the bonus approach to adjust the capital accounts, Belen received (gave) a bonus equal to: a. P24, b. P12, c. (P24,000) d. (P12,000) Under the bonus method, a portion of the capital of one partner is transferred to another partner. In this case, the total agreed capital is assumed to be equal to the total contributed capital, P276, (P150,000 + P126,000), and each partner shall be credited one-half (according to agreement) or P138,000. The partner who contributed more than his agreed capital credit is the one who gave a bonus while the one who contributed capital less than his agreed capital credit is the one who received it. Belen contributed P126,000 but received P138,000 (50% x P276,000) capital credit, hence, he received bonus equal to P12,000 (P138,000-P126,000) from AA who contributed P150,000 but received only P138,000 capital credit.
On May, 31, 2011, Allen, Belen, and Cenen formed a partnership by combining their businesses. Allen give cash of P50,000. Belen gave a property with a carrying amount of P30,000, an original cost of P40,000, and a fair market value of P80,000. Belen’s property, however, has a P35,000 mortgage for which the new partnership accepted legal responsibility. Cenen gave a delivery equipment with a book value of P30,000, an acquisition cost of P75,000, and an appraised value of P55,000. It was agreed that profits and losses are to be shared equally. The partner with the biggest capital account balance as of May 31, 2011, is a. Allen b. Belen c. Cenen d. Allen have equal capital balance. The partner with the biggest capital account balance as of May 31, 2011 is Cip, computed as follows: Allen Belen Cenen Cash P50,000 P - P - Non cash asset - 80,000 55, Mortgage - (35,000) -

Capital account balances P50,000 P45,000 P55,

Selected balance sheet accounts of Silvano on December 31, 2011 are shown below: Cash P30, Accounts receivable 25, Inventory 45, Furniture 32, Accounts payable 8, The following adjustments are to be made before he agree to admit Pegasus as a partner in exchange for his investment of P20,000 cash:  3% bad debts should be provided.  The fair value of the furniture is P27,000.  P5,000 of the inventory is obsolete but can still be sold for P3,000. After adjustment, how much capital should be reflected in the books of Silvano? a. P115, b. P116, c. P124, d. P132, The adjusted capital of Silvano is P116,250, computed as follows: Total Assets (computation a) P132, Less accounts payable (given) 8, Capital before adjustments P124, Less net adjustments (computation b) 7, Adjusted capital of Silvano P116, Computation a: Cash P 30, Accounts receivable 25, Inventory 45, Furniture 32, Total assets P132, Computation b: Provision for bad debts (3% x P25,000) P 750 Reduction in the value of furniture: (P32,000 – 27,000) 5, Decrease in the value of inventory: (P5,000 – 3,000) 2, Net adjustments P7,

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