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Problem 1.
On June 1, 2013, DM, the sole proprietor of the VMX Company
Which of the following statements is false?
A. Assuming the partners will either invest or withdraw cash, using DM as the base, BQ and LK will
both invest cash with a total amount of P303,200.
B. Assuming the partners will either invest or withdraw cash, using BQ as the base, DM and LK will
both withdraw cash with a total amount of P1,948,800.
C. Assuming the partners will either invest or withdraw cash, using LK as the base, DM and BQ will
both invest cash with a total amount of P2,243,200.
D. If the transfer of capital method is used, the capital accounts of DM and LK will be debited in the
amount of P121,280 and P560,800, respectively.
Problem 1
Assets
Liabilities
Capital Investment
BQ (35%)
2,380,000
2,380,000
Cap of DM (40%)
MI Reduction
Eq Reduction
Allow on AR
Payment of AP
Adjusted Capital
3,316,000
(551,600)
(618,000)
(273,600)
1,748,000
3,620,800
Situation D
DM
BQ
LK
Total
Cont.
3,620,800
2,380,000
2,748,000
8,748,800
LK (25%)
2,748,000
2,748,000
Agreed
3,499,520
3,062,080
2,187,200
8,748,800
Transfer
121,280
(682,080)
560,800
Situation A
DM (as base)
BQ
LK
Total/Net
Situation B
DM
BQ (as base)
LK
Total
Situation C
DM
BQ
LK (as base)
Total
Problem 2.
On June 1, 2013, MP and CV
What is the fair value of the equipment invested by MP?
A. P84,000
C. P60,500
B. P87,500
D. P97,500
Problem 2
AR
MI
Mach
CV
23,000
65,000
137,000
Intangibles
Capital
Less: MP Cash
FV of Equipment
54,000
279,000
195,000
84,000
Problem 3.
On June 1, 2013, AZ invited MG to join him in his business
what is the effect in the carrying value of the equipment as a result of the admission of MG?
A. P364,000
C. P 396,000
B. P(32,000)
D. P(324,000)
Problem 3
AZ Capital After Adj.
MG Capital
Total
AZ before adjusment
Acc. Exp.
Eq adj.
AZ after adj.
Net equipment
484,000
396,000
880,000 (= 880K /55%)
556,000
(40,000)
(32,000)
484,000
364,000
Problem 4.
On June 1, 2013, MD and AF are combining their separate businesses
What is the amount of cash presented on the partnerships Statement of Financial Position on June 1,
2013?
A. P276,250
C. P251,250
B. P552,500
D. P502,500
Problem 4
Non cash investments
AP
Capital before cash
MD
162,500
(15,000)
147,500
AF
122,500
(11,250)
111,250
Total
285,000
(26,250)
258,750
Cash Cont.
Total
251,250
398,750
251,250
362,500
502,500
761,250
Salary
Interest
Bonus
Balance
Totl Division
C
1,250.00
1,500.00
8,250.00
13,750.00
24,750.00
I
1,250.00
1,187.50
19,250.00
21,687.50
C
Total
2,500.00
3,750.00
8,250.00
55,000.00
69,500.00
1,062.50
22,000.00
23,062.50
Problem 2.
EX and VP are partners engaged in a manufacturing business.
How much is the net increase/decrease in VPs capital account during 2013?
A. P 5,600
C. P(65,600)
B. P134,400
D. P(25,600)
Problem 2
Interest
Salary
Bonus
Balance
Totl Division
Investment
EX
20,000.00
100,000.00
(234,400.00)
(114,400.00)
400,000.00
VP
28,800.00
140,000.00
(234,400.00)
(65,600.00)
440,000.00
Withdrawals
Net Inc/Dec
(280,000.00)
5,600.00
(240,000.00)
134,400.00
B
Total
48,800.00
240,000.00
(468,800.00)
(180,000.00)
Problem 3.
LS and GM are partners of BMG Partnership begins its first year of operations on June 1, 2013
Which of the following statements is wrong?
A. The capital balance of LS at the end of 2014 is P1,242,925
B. The share of GM in the net loss in 2014 is a credit to capital account of P14,575.
C. There is a net increase of P97,500 in the capital account of LS from beginning to end of 2013.
D. The capital balance of GM at the end of first year is P1,038,500.
LS
560,000.00
126,000.00
-
GM
784,000.00
63,000.00
60,000.00
Total
1,344,000.00
189,000.00
60,000.00
Balance (516,500.00)
Totl Division
169,500.00
Beg Cap. 1,440,000.00
(516,500.00)
390,500.00
720,000.00
(1,033,000.00)
560,000.00
2,160,000.00
Salary
Interest
Bonus
Total
1,609,500.00
1,110,500.00
Withdrawals
(72,000.00)
(72,000.00)
End Cap 1,537,500.00 1,038,500.00
C
D
Salary
Interest
Bonus
2,576,000.00
1,344,000.00
155,775.00
2,304,000.00
386,400.00
-
(2,970,400.00)
B
(280,000.00)
2,576,000.00
Total
960,000.00
230,625.00
-
1,242,925.00
1,053,075.00
Withdrawals
(96,000.00)
End Cap 1,146,925.00
(96,000.00)
957,075.00
2,104,000.00
Problem 4.
The partnership of D, T, and I was formed on January 1, 2013
how much is the net loss that must be generated by the partnership?
A.
B.
P171,000
P129,600
C. P108,000
D. P136,200
Problem 4
Salary
Interest
Bonus
Balance
Totl Division
D
80,000.00
21,600.00
(136,200.00)
(34,600.00)
T
70,000.00
32,400.00
I
48,000.00
48,600.00
(136,200.00) (136,200.00)
(33,800.00) (39,600.00)
Total
198,000.00
102,600.00
(408,600.00)
(108,000.00)