Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Abena and Buendia establish a partnership to operate a used-furniture business under the name
of A and B Furniture. Abena contributes furniture that cost P60,000 and has a fair value of
P90,000. Buendia contributes P30,000 cash and delivery equipment that cost P40,000 and has
a fair value of P30,000. The partners agree to share profits and losses 60% to Abena and 40% to
Buendia.
1. The peso amount of gain (loss) that will result if the initial noncash contributions of the
partners are recorded at cost rather than fair market value will be
On April 30, 2018, Bautista, Jimenez and Laxamana formed a partnership by combining their
separate business proprietorships. Bautista contributed cash of P100,000. Jimenez contributed
property with a carrying amount of P72,000, original cost of P80,000, and fair value of P160,000.
The partnership accepted responsibility for the P70,000 mortgage attached to the property.
Laxamana contributed equipment with a carrying amount of P60,000, original cost of P150,000,
and fair value of 110,000. The partnership agreement specifies that profits and losses are to be
shared equally but is silent regarding capital contributions.
2. Which partner has the largest capital account balance as of April 30, 2018?
a. Bautista c. Laxamana
b. Jimenez d. All capital account balances are equal
G. Macalino and W. Nolasco form a partnership and agree to divide initial capital equally, even
though Macalino contributed P100,000 and Nolasco gave P84,000 in identifiable assets.
3. Under the bonus approach to adjust capital accounts, Nolasco’s unidentifiable assets should
be debited for
a . P8,000 c. P-0-
b . P16,000 d . P46,000
L. Molina and R. Nepomuceno enter into a partnership agreement in which Molina is to have a
60% interest in capital and profits and Nepomuceno is to have a 40% interest in capital and profits.
Molina contributes the following:
There is a P60,000 mortgage on the building that the partnership agrees to assume. Nepomuceno
contributes P100,000 cash to the partnership. Molina and Nepomuceno agree that Nepomuceno’s
capital account should equal Nepomuceno’s P100,000 cash contribution and that goodwill should
be recorded.
On March 1, 2018, Z Roxas and B. Solomon decided to combine their business and form a
partnership. The balance sheet of Roxas and Solomon on March 1, before adjustment is
presented below.
Roxas Solomon
01_AFAR_L01 Page 1
Accounts Receivable 18,500 13,500
Inventories 30,000 19,500
Furniture and fixtures (net) 30,000 9,000
Office Equipment (net) 11,500 2,750
Prepaid Expenses 6,375 3,000
P105,375 P51,500
They agreed to provide 3% for doubtful accounts on their accounts receivable and
found Solomon’s furniture to be underdepreciated by P900.
5. If each partner’s share in equity is to be equal to the net assets invested, the capital accounts
of Roxas and Solomon would be:
N. Bruno and A. Carlos are combining their separate businesses to form a partnvership. Cash
and noncash assets are to be contributed for a total capital of P300,000. The noncash assets to
be contributed and the liabilities to be assumed are:
Bruno Carlos
BV FMV BV FMV
Accounts receivable P20,000 P20,000
Inventories 30,000 40,000 P 20,000 P25,000
Equipment 60,000 45,000 40,000 50,000
Accounts payable 15,000 15,000 10,000 10,000
The partners’ capital accounts are to be equal after all the contribution of assets and the
assumption of liabilities.
On September 30, 2018, G. Mallari admits H. Nebre for an interest in his business. On this date
Mallari’s capital account shows a balance of P158,400. The following were agreed upon before
the formation of the partnership:
a. P32,950 c. P82,950
b. P55,300 d. P 5,300
a. P221,200 c. P171,200
b. P198,850 d. P248,850
2
I. Diaz and J. Estipona entered into a partnership on February 1, 2018 by investing the following
asset
Diaz Estipona
Cash P15,000
Merchandise inventory P45,000
Land P15,000
Building P65,000
Furniture and Fixtures P100,000
The agreement between Diaz and Estipona provides that profits and losses are to be
divided into 40% and 60% to Diaz and Estipona, respectively. The partnership is to
assume the P30,000 mortgage loan on the building.
10. If Estipona is to receive a capital equal to his profit and loss ratio, how much cash must
he invest?
a. P127,500 c. P 97,500
b. P172,500 d. P 77,500
11. Assuming that Estipona invests P50,000 cash and each partner is to be credited for the full
amount of the net assets invested, the total capital of the partnership is
a. P210,000 c. P290,000
b. P260,000 d. P250,000
12. Assuming the partnership agreement provides that the partners should initially have an
equal interest in the partnership, capital, what is Estipona’s capital upon partnership
formation?
a. P125,000 c. P105,000
b. P95,000 d. P115,000
J. Cabrillo, a partner in the Cheery Partnership, has a 30% participation in partnership profits and
losses. Cabrillo’s capital account had a net decrease of P120,000 during the calendar year 2018.
During 2018, Cabrillo withdrew P260,000 (charged against his capital account) and contributed
property valued at P50,000 to the partnership.
14. Partners C. Fontana and D. Guevarra share income and loss equally after each has been
credited in all circumstances with annual salary allowances of P30,000 and P24,000,
respectively. Under this arrangement, in which of the following circumstances will Fontana
benefit by P6,000 more than Guevarra?
a. Only if the partnership has earnings of P54,000 or more for the year
b. Only if the partnership does not incur a loss for the year
c. In all earnings or loss situation
d. Only if the partnership has earnings of at least P6,000 for the year
15. Partners N. Lazaro and O. Mariano share an income in a 2:1 ratio, respectively. Each
partner receives an annual salary allowance of P12,000. If the salaries are recorded in the
accounts of the partnership as an expense rather than treated as an allocation of income,
the total amount allocated to each partner for salaries and net income would be
P. Navarro and Q. Paredes formed a partnership on January 2, 2018, and agreed to share income
90% and 10% respectively. Navarro contributed a capital of P50,000. Paredes contributed no
capital but has a specialized expertise and manages the firm full-time. There were no withdrawals
during the year. The partnership agreement provides for the following:
3
c. Paredes is to receive a bonus of 20% of income calculated before deducting
his bonus , his salary, and interest on both capital accounts.
d. Bonus, interest and Paredes’ salary are to be considered partnership
expenses.
Revenues P192,900
Expenses (including salary, interest and bonus) 99,400
Net Income P 93,500
The partnership agreement between M. Moran and R. Reynoso stipulates that Moran is to receive
a 20% bonus on profit before bonus, with residual profit and loss to be apportioned in the ratio of
2:3, respectively.
17. Which partner has a greater advantage when the partnership has a profit and when it
incurred a loss?
a. Profit: Reynoso Loss: Moran
b. Profit: Moran Loss: Reynoso
c. Profit: Reynoso Loss: Reynoso
d. Profit: Moran Loss: Moran
ABC’s partnership provided for the following distribution of profit and losses:
• First, Alberto is to receive 10% of the net income up to P1,000,000 and 20% on
the amount in excess thereof;
• Second, Bustamante and Cancio each are to receive 5% of the remaining
income in excess of P1, 500,000 after Alberto’s share as per above; and
• The balance is to be divided equally among the partners.
For the year just ended, the partnership realized a net income of P2,500,000 before
distribution to partners.
18. How much is the share of Alberto in the income of the partnership?
a. P1,000,000 c. P1,080,000
b. P1,300,000 d. P1,100,000
G. Rante, E. Dela Cruz and M. Ocampo are partners with average capital balances in 2003 of
P240,000, P120,000, and P80,000 respectively. Partners receive 10% interest on their average
capital balances. After deducting salaries of P60,000 to Rante and P40,000 to Dela Cruz, the
residual profit or loss is divided equally. In 2018, the partnership sustained a P66,000 loss before
interest and salaries partners.
M. Singson, C. Torralba and A. Verrano are partners in an accounting firm. Their capital account
balances at year-end were: Singson, P50,000; Torralba, P110,000; Verrano, P50,000. They
share profit and losses on a 4:4:2 ratio, after the following terms.
20. Assuming a net income of P44,000 for the year, the total profit share of Verrano was:
a. P7,800 c. P19,400
b. P16,800 d. P19,800
4
Tayag, Unso, and Vidal, a partnership formed on January 1, 2018 had the following
initial investment:
R. Tayag P100,000
J. Unso 150,000
T. Vidal 225,000
The partnership agreement stated that profits and losses are to be shared equally by
the partners after the consideration is made by the following:
• Salaries allowed to partners: P60,000 for Tayag; P48,000 for Unso and P36,000
for Vidal.
• Average partner’s capital balances during the year shall be allowed 10%.
Additional information:
• On June 30, 2018, Tayag, invested an additional P60,000.
• Vidal withdrew P70,000 from the partnership on Sept. 30, 2018.
• Share on the remaining profit was P3,000 for each partner.
22. Partnership net profit at Dec. 31, 2018 before salaries, interest and partners’ share on the
remainder was:
a. P199,750 c. P211,625
b. P207,750 d. P201,750
A. Anton, C. Briones, and C. Camba are partners with average capital balances during 2018 of
P472,500, P238,650, and P162,350 respectively. The partners receive 10% interest on their
average capital balances; after deducting salaries of P122,325 to Anton and P82,625 to Camba,
the residual profit or loss is divided equally.
In 2018, the partnership had a net loss of P125,624 before the interest and salaries to partners.
24. By what amount should Anton’s and Camba’s capital account change?
A. Mariano and J. Lucas entered into partnership on March 1, 2018, investing P125,000 and
P75,000 respectively. It was agreed that Mariano, the managing partner, was to receive a salary
of P30,000 per year and also 10% bonus on the net profit after adjustment for the salary; the
balance of the profit was to be divided in the ratio of their original capital. On December 31, 2018
account balances are as follows:
25. The distribution of the net profit to Mariano and Lucas is:
Mariano Lucas
a. P32,500 P5,100
b. P34,450 P5,860
c. P34,450 P4,860
5
d. P35,450 P6,840
26. The partners’ capital on December 31, 2018, after closing the net profit and drawing
accounts are:
Mariano Lucas
a. P139,540 P49,860
b. P135,940 P47,960
c. P142,540 P48,680
d. P142,350 P47,670
The BLUE Company, a partnership, was formed on January 1 , 2018 with four partners, B. Gomez,
L. Mana, U. Lapid and E. Nuguid. Capital contributions were as follows:
B. Gomez P100,000
L. Mana 50,000
U. Lapid 50,000
E. Nuguid 40,000
The partnership agreement provides that each partner shall receive 5% interest on the amount of
his capital contribution. In addition, Gomez is to receive a salary of P10,000 and Mana a salary
P6,000 per annum which are to be charged as expenses of the business.
The agreement further provides that Lapid shall receive a minimum of P5,000 per annum from
the partnership and Nuguid a minimum of P12,000 per annum, both including amounts allowed
as interest on capital and their respective share of profits. The balance of the profits is to be
distributed in the following proportions: Gomez, 30%; Mana, 30%; Lapid, 20%; and Nuguid, 20%.
27. The amount that must be earned by the partnership during 2018, before any charge for
interest on capital or partners’ salaries in order that Gomez may receive an aggregate of
P25,000, including, interest, salary and share of profits would be: (Disregard income tax)
a. P75,000.00 c. P64,468.92
b. P74,666.67 d. P64,666.67
Puno, B. Quirino, and C. Romero are partners in a lumber company. Their partnership agreement
provides for the following profit and loss distributions:
• Puno, Quirino and Romero are to receive salaries of P40,000, P36,000, and
P13,650, respectively. Puno is to receive a bonus equal to 10% of income
before the bonus.
• Each partner is to receive 10% interest on the weighted average capital
balance.
• Withdrawals are considered to be reduction of capital for purposes of interest
calculations.
• Any remaining profits or losses are to be divided equally among the partners.
30. How much profit must the partnership earn to allow Puno to withdraw exactly P61,000
excluding previous withdrawals?
a. P61,000 c. P89,650
b. P130,000 d. P96,000
6
J. Jimeno, C. Madrid and A. Soriano are partners sharing profits on a 5:3:2 ratio. On January 1,
2018, N. Matias was admitted into the partnership with a 20% share in the profits. The old partners
continue to participate in the profits in their original ratios.
For the year 2018, the partnership books showed a net income of P25,000. It was
disclosed, however, that the errors stated on the next page were made.
2019 2018
Accrued expenses not recorded at year – end P1,200
Inventory overstated P3,100
Purchases not recorded, for which goods have
been received and inventoried 2,000
Income received in advance not adjusted 1,500
Unused supplies not taken up at year –end 900
31. The new profit and loss ratio of Jimeno, Madrid , Soriano and Matias, respectively, for 2018
is
a. 40%, 25%, 15%, and 20%
b. 50%, 20%, 10%, and 20%
c. 45%, 30%, 15%, and 20%
d. 40%, 24%, 16%, and 20%
32. Disregarding income tax, the share of partner Jimeno in the 2018 corrected net income is
a. P9,400 c. P11,750
b. P10,000 d. P12,500
M. Serrano and N. Toledo organized a partnership to own and operate a health- food store. The
partnership agreement provided that M. Serrano receive a salary of P20,000 and N. Toledo a
salary of P10,000 to recognize their relative time spent in operating the store . Remaining profits
and losses were divided 60:40 to M. Serrrano and N. Toledo, respectively. Income for 2002, the
first year of operations, of P26,000 was allocated P17,600 to M. Serrano and P8,400 to N. Toledo
On January 1, 2018 the partnership agreement was changed to reflect the fact that N. Toledo
could no longer devote any time to the store’s operations. The new agreement allows M. Serrano
a salary of P36,000, and the remaining profits and losses are divided equally. In 2018, an error
was discovered such that the 2017 reported income was understated by P8,000. The partnership
income of P50,000 for 2018 included this P8,000 related to 2017.
33. How should the 2018 partnership income of P50,000 be allocated to Serrano and Toledo
a. P43,000 and P7,000 to Serrano and Toledo, respectively
b. P25,000 and P25,000 to Serrano and Toledo, respectively
c. P43,800 andP6,200 to Serrano and Toledo, respectively
d. P36,000 and P14,000 to Serrano and Toledo, respectively