1) A business owned by Peter was short of cash and Peter decided to form a partnership

with Senen and Ethel. Senen was able to contribute cash thrice the interest of Peter in
the partnership while Ethel was able to contribute cash twice the interest of Senen in the
partnership. The assets contributed by Peter were as follows: Cash P18,000; Accounts
receivable P378,000 with allowance for doubtful accounts of P12,000; Inventory
P840,000; and store equipment of P300,000 with accumulated depreciation of P30,000
but with current worth of P250,000 and agreed value of P200,000.
Peter, Senen and Ethel agreed that the allowance for doubtful accounts was
inadequate and should be P20,000. They also agreed that the fair value of the inventory is
P920,000.
The total assets of the partnership are:
b. P7,092,000
a. P7,880,000
c. P14,960,000
d. P15,460,000

2.) On August 1, 2020, the business accounts of Peter and Senen appear below:
Assets Peter Senen
Cash P11,000 P22,354
Accounts receivable 84,536 217,890
Inventories 100,035 240,102
Land 603,000 428,267
Buildings 200,345 384,789
Other Assets 22,000 23,600
Total P1,020,916 P1,317,002
Liabilities and Capital
Accounts payable P178,940 P243,650
Notes payable 200,000 345,000
Peter, Capital 641,976
Senen, Capital 728,352
Total P1,020,916 P1,317,002

Peter and Senen agreed to form a partnership contributing their respective assets and liabilities
subject to the following adjustments:
Accounts receivable of P20,000 and P35,000 are uncollectible in Peter and Senen’s respective
books.
Inventories of P5,500 and P6,700 are worthless in Peter and Senen’s respective books
Other Assets of P2,200 and P3,600 in Peter and Senen’s books are written off.
After five days Ethel was offered to join Peter and Senen and will contribute for a 20% interest in
the firm. They also agreed to divide profits and losses in the ratio of 4:4:2 same ratio based on
their capital credit as agreed upon formation. As a result of the said agreement, as a personal
transaction.
How much should the cash settlement be between Peter and Senen?
a. P33,602
c. P32,930
d. P32,272
b. P34,388

3.) On August 1, 2020, the business accounts of Peter and Senen appear below:
Assets Peter Senen
Cash P11,000 P22,354
Accounts receivable 84,536 217,890
Inventories 100,035 240,102
Land 603,000 428,267
Buildings 200,345 384,789
Other Assets 22,000 23,600
Total P1,020,916 P1,317,002
Liabilities and Capital
Accounts payable P178,940 P243,650
Notes payable 200,000 345,000
Peter, Capital 641,976
Senen, Capital 728,352
Total P1,020,916 P1,317,002

Peter and Senen agreed to form a partnership contributing their respective assets and liabilities
subject to the following adjustments:
Accounts receivable of P20,000 and P35,000 are uncollectible in Peter and Senen’s respective
books.

Inventories of P5,500 and P6,700 are worthless in Peter and Senen’s respective books
Other Assets of P2,200 and P3,600 in Peter and Senen’s books are written off.
After five days Ethel was offered to join Peter and Senen and will contribute for a 20% interest
in the firm. They also agreed to divide profits and losses in the ratio of 4:4:2 same ratio based
on their capital credit as agreed upon formation. As a result of the said agreement, as a
personal transaction.
How much is the capital contribution of Ethel?
c. P331,257
b. P342,582
d. P342,582
a. P324,332

4.) On December 1, 2020, Angkit invited Mulong to join him in his business. Mulong agreed that
Angkit will adjust the accumulated depreciation of his Equipment account to a certain amount,
and will recognize additional accrued expenses of P10,000. After that, Mulong is to invest
additional pieces of equipment to make his interest equal to 45%. If the capital balances of
Angkit before and after adjustments were P139,000 and P121,000 respectively, What is the
effect in the carrying value of the equipment as a result of the admission of Mulong?
d. (P81,000)
a. P91,000
c. P99,000
b. (P8,000)

5.) capital contribution of P600,000, P1,000,000 and P400,000. Allan is appointed as managing
partner.
During 2020, Allan, Badong and Cario made additional investments of P1,000,000, P400,000,
and P600,000, respectively. At the end of 2020, Allan, Badong and Cario made drawings of
P400,000, P200,000 and P800,000, respectively. At the end of 2020, the capital balance of
Cario is reported at P600,000. The profit or loss agreement of the partners is as follows:
* 10% on original capital contribution of the partners
Quarterly salary of P80,000 and P20,000 for Allan and Badong, respectively
Bonus to Allan equivalent to 20% of the Net Income after interest and salary to all partners
Remainder to be distributed equally among the partners.
What is the partnership profit for the year ended December 31, 2020?
d. P1,920,000
c. P2,100,000
b. P2,040,000*
a. P1,800,000
6.) What is Allan’s share in partnership profit for 2020?
d. P400,000
a. P380,000
b. P680,000
c. P1,080,000
7.) What is Badong’s share in partnership profit for 2020?
d. P180,00
a. P400,000
b. P580,000
c. P100,000
8.) Partners Ethel, Francing and Gestapo had capital balances of P120,000, P155,000, and
P115,000, respectively. The partnership generated a net loss of P140,000 during the year, The
partners share profits and loss 2:5:1 respectively.
Due to disagreement, Partner Francing wanted out of the partnership . Before
retirement, the value of inventory increased from P85,000 to P97,000. The partners decided to
pay partner Francing P70,000 upon retirement.
What amount should be reported as the capital balance of partner Ethel after the retirement of
partner Francing?
a. P84,667
d. P87,000
b. P89,000
c. P91,333
9.) What amount should be reported as the capital balance of partner Gestapo after the
retirement of partner Francing?
a. P93,333
d. P98,500
b. P99,500
c. P100,667

10.) Assume that an equipment is overvalued. How much is the overvaluation of the equipment?
b. P2,500
d. P4,000
a. P5,000
c. P8,000

11.) What amount should be reported as the capital balance of partner Ethel after the retirement
of Francing?
c. P89,000
a. P91,333
b. P84,667
d. P86,000

12.) What amount should be reported as the capital balance of partner Gestapo after the
retirement of partner Francing?
d. P98,000
b. P84,667
c. P99,500
a. P100,667

13.) Zandy and Yaying have capital balances of P150,000 and P180,000, respectively. Zandro
is to invest P60,000 for 15% in the partnership interest and also in the profit and loss. There is
an undistributed net income in the amount of P80,000. Partners Xandy and Yaying share profit
and loss 65% and 35% respectively.
How much is the capital balance of Zandro upon his admission?
a. P60,000
b. P61,500
c. P72,000
d. P70,500
14.) How much is the bonus to partner Zandy from partner Zandro
d. P3,675
a. P10,500
b. P6,825
c. P -0-

15.) If equipment is overvalued, how much is the share of partner Yaying in the overvaluation of
the equipment?
a. P24,500
d. P28,000
b. P45,500
c. P10,500

16.) After a long dispute, Cario, Ampahol and Nardo decided to liquidate their partnership. Their
total interests as of January 1, 2020 are:
Cario (25%) P375,000
Ampahol (40%) P450,000
Nardo (35%) P280,000
Partnership total assets on this date include P125,000 cash and a receivable from Cario
amounting to P25,000 and noncash assets of a certain amount. Total liabilities to outside
creditors are P320,000 and the partnership still owes Nardo an amount of P20,000. At the end
of the liquidation, Ampahol received P75,000.

How much is the total book value of the noncash assets?

a. P1,300,000
b. P1,250,000
c. P1,280,000
d. P1,295,000

17.) How much were the noncash assets sold for?

b. P362,500
a. P405,625
d. P312,500
c. P410,625

18.) On January 1, 2020, Bankruptcy Partnership entered liquidation. The partner’s balances on
this date are as follows:
Anno (25%) P125,000
Caring (35%) P270,000
Janang (40%) P185,000

The partnership has liabilities amounting to P220,000, including a loan from Caring P30,000.
Cash on hand before the start of liquidation is P40,000.
Assume that certain assets were sold for P370,000 and the rest of the noncash assets were
sold at a loss of P210,000. How much cash will be distributed to the partners?
c. P400,000
d. P370,000
b. P590,000
a. P220,000

19.) Assume that after exhausting the noncash assets of the partnership, how much cash must
be invested by the partners to satisfy the claims of the outside creditors and to pay the amount
due to the partner/s?
c. P224,000
a. P218,000
d. P190,000
b. P184,000

20.) Assume that if Caring received P112,750, how much was the loss from the realization of
the noncash assets?
c. P535,000
b. P262,750
a. P497,250
d. P526,250

21.) The following are the data before liquidating Lost Corporation:
Cash P25,000 Accounts payable P325,000
Short term investment 75,000 Share capital 250,000
Accounts receivable 150,000 Deficit ( 75,000)
Inventory 250,000
Total P500,000 Total P500,000

Transactions during liquidation that did not involve cash were as follows:
Sales of merchandise on account P25,000
Purchase of merchandise account 7,500

Cash receipts and disbursements:

Cash receipts:
Sale of merchandise P125,000
Collections of accounts receivable 57,500
Sale of marketable securities 92,500
Interest on short- term investment 750
Cash disbursement:
Payment of accounts payable P175,000
Payment of expenses of trustee 37,500
At the end of the year, assets remaining to be realized and liabilities to be liquidated were as
follows:
Accounts receivable, beg P150,000
Add: Sales on account 25,000
Less: Collection on account 57,500
Balance determined to be uncollectible 7,500
Accounts receivable-end P110,000
Inventory beg P250,000
Add: Inventory acquired 7,500
Less: Cost of goods sold 157,500
Inventory, end P100,000
Accounts payable beg P325,000
Add: Purchases on account 7,500
Less: Payment on account 175,000
Accounts payable, end P157,500

Accrued expenses ending balance P1,750

What is the amount of assets to be realized?
a. P400,000
b. P475,000
c. P150,000
d. P550,000

22.) The following are the data before liquidating Lost Corporation:

Cash P25,000 Accounts payable 325,000

Short term investment 75,000 Share capital 250,000
Accounts receivable 150,000 Deficit ( 75,000)
Inventory 250,000
Total P500,000 Total P500,000

Transactions during liquidation that did not involve cash were as follows:
Sales of merchandise on account P25,000
Purchase of merchandise account 7,500
Cash receipts and disbursements:
Cash receipts:
Sale of merchandise P125,000
Collections of accounts receivable 57,500
Sale of marketable securities 92,500
Interest on short- term investment 750

Cash disbursement:
Payment of accounts payable P175,000
Payment of expenses of trustee 37,500

At the end of the year, assets remaining to be realized and liabilities to be liquidated were as
follows:

Accounts receivable, beg P150,000

Add: Sales on account 25,000
Less: Collection on account 57,500
Balance determined to be uncollectible (7,500)
Accounts receivable-end P110,000

Inventory beg P250,000

Add: Inventory acquired 7,500
Less: Cost of goods sold 157,500
Inventory, end P100,000

Accounts payable beg P325,000

Add: Purchases on account 7,500
Less: Payment on account 175,000
Accounts payable, end P157,500

Accrued expenses ending balance P1,750

How much was assets realized

a. P400,000
b. P475,000
c. P150,000
d. P550,000

23.) What is the net loss/gain on realization and liquidation?

a. P15,000 gain
d. P10,000 loss
c. P36,000 loss
b. P61,000 loss