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Catherine Agravante
AE 13 - Financial Accounting and Reportin ...
Partnership Dissolution and Liquidation

This test/quiz is accepting submissions until Saturday, December 11, 2021 at 12:00 pm
Questions 1-40 of 40 | Page 1 of 1

Question 1 (1 point)
Singer and McMann are partners in a business. Singer’s original capital was P40,0
00 and McMann’s was
P60,000. They agree to salaries of P12,000 and P18,000 for Singer and McMann respectively and 10%
interest on original capital. If they agree to share remaining profits and losses on a
3:2 ratio, what will Singer’s share of the income be if the income for the year was P50,000?
P24,000
a
P16,000
b
P22,000
c
P23,400
d
The capital accounts of Harrison and Marti have balances of P160,000 and
P110,000, respectively, on January 1, 2014, the beginning of the current
fiscal year. On April 10, Harrison invested an additional P20,000. During the
year, Harrison and Marti withdrew P96,000 and P78,000, respectively, and net
income for the year was P264,000. The articles of partnership make no
reference to the division of net income.
Based on this information, the statement of partners’ equity for 2014 would
show what amount in the capital account for Marti on December 31, 2014?
P164,000
a
P216,000
b
P380,000
c
P52,000
d
Alpha and Beta are partners who share income in the ratio of 1:2 and have capital
balances of P40,000 and P70,000 at the time they decide to terminate the partnership. After
all noncash assets are sold and all liabilities are paid, there is a cash balance of P50,000. What
amount of loss on realization should be allocated to Alpha?
P60,000
a
P20,000
b
P30,000
c
P50,000
d
A new partner may be admitted to a partnership by
a written approval under the federal law
a
purchasing a specific quantity of assets from the partnership
b
contributing assets to the partnership
c
inheriting a partnership interest
d
When a new partner is admitted to a partnership, there should be a(n)
new capital account added to the ledger for the new partner.
a
debit amount to the partner’s capital account for the cash received by the current
b partner.
increase in the total assets of the partnership.
c
increase in the total owner's equity of the partnership.
d
Everett, Miguel, and Ramona are partners, sharing income 1:2:3. After selling all
of the assets for
cash, dividing losses on realization, and paying liabilities, the balances in the
capital accounts are as follows: Everett,
P50,000 Cr.; Miguel, P40,000 Dr.; and Ramona, P30,000 Cr. How much cash is available for distribution
to the partners?
P90,000
a
P120,000
b
P30,000
c
P40,000
d
Partners Ken and Macki each have a P40,000 capital balance and share income
and losses in a 3:2. Cash equals P20,000, noncash assets equal P120,000, and
liabilities equal P60,000. If the noncash assets are sold for
P50,000, and each partner is personally insolvent, Partner Macki will
eventually receive cash of
P12,000.
a
P10,000.
b
P20,000.
c
P0.
d
P80,000, the Macki’s capital account will
decrease by P40,000.
a
b
increase by P24,000.
c
d
Soledad and Winston are partners who share income in the ratio of 1:3 and have
capital balances of
P100,000 and P140,000 at the time they decide to terminate the partnership. After all noncash assets are
sold and all liabilities are paid, there is a cash balance of P130,000. What amount of loss on realization should
be allocated to Winston?
P82,500
a
P97,500
b
P42,500
c
P110,000
d
When a new partner is admitted to a partnership, there should be a(n)
realization of assets
a
allocation of assets
b
return of assets
c
revaluation of assets
d
Benson and Orton are partners who share income in the ratio of 2:3 and have
capital balances of P60,000 and P40,000 respectively. Ramsey is admitted to
the partnership and is given a 10% interest by investing
P20,000. What is Orton’s capital balance after admitting Ramsey?
P35,200
a
P16,000
b
P44,800
c
P20,000
d
Bobbi and Stuart are partners. The partnership capital of Bobbi is P40,000 and
Stuart is P70,000. Bobbi sells his interest in the partnership to John for
P50,000. The journal entry to record the admission of John as a new partner would
include
a credit to Stuart’s capital for P10,000
a
a credit to John’s capital for P40,000
b
a credit to John’s capital for P40,000 and a credit to Stuart’s capital for P10,000
c
a credit John’s capital for P50,000
d
When an additional partner is admitted to a partnership by contribution of assets to
the partnership
no liabilities can be contributed at the same time
a
the amount of the cash contribution is the same as the amount of the debit to the new
b partner's capital account
the total of the owner's equity accounts increases
c
the total assets of the partnership do not change
d
The balance sheet of Morgan and Rockwell was as follows immediately prior to
the partnership's being liquidated: cash, P20,000; other assets, P160,000; liabilities,
P40,000; Morgan capital, P60,000; Rockwell capital, P80,000. The other assets
were sold for P139,000. Morgan and Rockwell share profits and losses in
a 2:1 ratio. As a final cash distribution
from the liquidation, Morgan will receive cash totaling
P51,000
a
P49,500
b
P46,000
c
P60,000
d
The remaining cash of a partnership (after creditors have been paid) upon liquidation is divided among partners
according to their
contribution of assets
a
capital balances
b
drawing balances
c
income sharing ratio
d
P60,000, and both partners agree to make up an capital deficits with personal
cash contributions, Partner Macki will eventually receive cash of
P16,000.
a
P0.
b
P4,000.
c
P24,000.
d
show what amount as total capital for the partnership on December 31, 2010?
P176,000
a
P752,000
b
P404,000
c
P228,000
d
A change in the ownership of a partnership results in the
dissolution of the partnership
a
liquidating of the partnership
b
realization of the partnership
c
consolidating of the partnership
d
The Calvin-Dogwood Partnership owns inventory that was purchased for
P90,000, has a current replacement cost of P85,900, and is priced to
sell for P125,000. At what amount should the inventory be recorded in
the accounts of the new partnership if Alexis is to be admitted?
P85,900
a
P129,100
b
P90,000
c
P125,000
d
A partnership liquidation occurs when
a new partner is admitted

a
the assets are sold, liabilities paid, and business operations terminated
b
the ownership interest of one partner is sold to a new partner
c
a partner dies
d
When a partner dies, the capital account balances of the remaining partners
will decrease
a
will remain the same
b
will increase
c
may increase, decrease, or remain the same
d
The capital accounts of Hawk and Martin have balances of P160,000 and
fiscal year. On April 10, Hawk invested an additional P10,000. During the
year, Hawk and Martin withdrew P86,000 and P68,000, respectively, and net
show what amount in the capital account for Hawk on December 31, 2010?
P201,000
a
P211,600
b
P213,000
c
P203,000
d
Benson and Orton are partners who share income in the ratio of 1:3 and have
P20,000. What is Orton’s capital balance after admitting Ramsey?
P9,000
a
P70,000
b
P20,000
c
P63,000
d
Antonio and Barbara are partners who share income in the ratio of 1:2 and have
capital balances of
P40,000 and P70,000 at the time they decide to terminate the partnership. After all noncash
assets are sold and all liabilities are paid, there is a cash balance of P80,000. What amount of loss on realization
should be allocated to Barbara?
P80,000
a
P30,000
b
P20,000
c
P10,000
d
Immediately prior to the admission of Abbott, the Smith-Jones Partnership assets
had been adjusted to current market prices, and the capital balances of Smith and
Jones were P40,000 and P60,000 respectively. If the parties agree that the
business is worth P120,000, what is the amount of bonus that should be recognized
in the accounts at the admission of Abbott?
P80,000
a
P40,000
b
P20,000
c
P60,000
d
The capital accounts of Hawk and Martin have balances of P160,000 and
fiscal year. On April 10, Hawk invested an additional P10,000. During the
year, Hawk and Martin withdrew P86,000 and P68,000, respectively, and net
show what amount in the capital account for Martin on December 31, 2010?
P173,000
a
P201,000
b
P211,000
c
P232,000
d
Soledad and Winston are partners who share income in the ratio of 1:3 and have
capital balances of
P100,000 and P140,000 at the time they decide to terminate the partnership. After all noncash assets are
sold and all liabilities are paid, there is a cash balance of P130,000. What amount of loss on realization should
be allocated to Soledad?
P60,000
a
P32,500
b
P92,500
c
P27,500
d
A partner withdraws from a partnership by selling her interest to another person who currently is not associated with
the firm. As a results of this transaction, the capital account balance of the other partners in the partnership
will increase
a
may increase, decrease, or remain the same
b
will decrease
c
will remain the same
d
Harriet, Mickey, and Zack decide to liquidate their partnership. All assets
are sold and the liabilities are paid. Following these transactions, the
capital balances and profit and loss percentages are as follows: Harriet,
P27,000 and 30%; Mickey, P(12,000) and 40%; Zack, P43,000 and 30%. Mickey is
unable to contribute any assets to reduce the deficit. How much cash will
Harriet receive as a results of the partnership liquidation?
P23,400
a
P15,000
b
P27,000
c
P21,000
d
When a new partner is admitted to a partnership

a bonus may be attributable to the old partner
a
a bonus may only result from more cash being given by the new partner than the value
b of the of the assets being purchased
a bonus is not recorded
c
a bonus agreed upon by the partners is recorded as an asset so long as the amount is
d within the range set by the SEC
Teri, Doug, and Brian are partners with capital balances of P20,000, P30,000,
and P50,000 respectively. They share income in the ratio of 3:2:1. Income
Summary with a debit balance of P30,000 is closed to the capital accounts. Doug
withdraws from the partnership. How much cash does he get upon withdrawal?
P30,000
a
P24,000
b
P40,000
c
P20,000
d
Adriana and Belen are partners who share income in the ratio of 3:2 and have
capital balances of P50,000 and P90,000 at the time they decide to terminate the
partnership. After all noncash assets are sold and
all liabilities are paid, there is a cash balance of P90,000. How much cash should
be distributed to Adriana?
P50,000
a
P45,000
b
P20,000
c
P30,000
d
Abby and Bailey are partners who share income in the ratio of 2:1 and have
capital balances of P60,000 and P30,000 respectively. With the consent
of Bailey, Sandra buys one half of Abby's interest for
P35,000. For what amount will Abby's capital account be debited to record admission of Sandra to the partnership?
P35,000
a
P15,000
b
P30,000
c
P40,000
d
Benson and Orton are partners who share income in the ratio of 2:3 and have capital balances of P60,000 and
P40,000 respectively. Ramsey is admitted to the partnership and is given a 40% interest by investing P20,000. What
is Benson’s capital balance after admitting Ramsey?
P24,000
a
P48,800
b
P71,200
c
P20,000
d
Benton and Orton are partners who share income in the ratio of 1:3 and have
P20,000. What is Benton’s capital balance after admitting Ramsey?
P70,000
a
P20,000
b
P7,000
c
P63,000
d
Everett, Miguel, and Ramona are partners, sharing income 1:2:3. After selling all of
the assets for
cash, dividing losses on realization, and paying liabilities, the balances in the
capital accounts are as follows: Everett,
P50,000 Cr.; Miguel, P40,000 Dr.; and Ramona, P30,000 Cr. How much cash should be distributed to
Everett assuming that Miguel pays the deficiency?
P20,000
a
P30,000
b
P40,000
c
P50,000
d
Nick is admitted to an existing partnership by investing cash. Nick agrees to pay
a bonus for
his ownership interest because of the past success of the partnership. When Nick’s
investment in the partnership is recorded
his capital account will be credited for the amount of cash he invested
a
his capital account will be credited for more than the cash he invested
b
a bonus will be distributed to the old partners' capital accounts.
c
a bonus will be credited for the amount of cash he invested
d
show what amount in the capital account for Harrison on December 31, 2014?
P216,000
a
P164,000
b
P380,000
c
P52,000
d
A gain or loss on realization is divided among partners according to their
income sharing ratio
a
contribution of assets
b
capital balances
c
drawing balances
d
Samuel and Darci are partners. The partnership capital for Samuel is
P50,000 and for Darci is
P60,000. Josh is admitted as a new partner by investing P50,000 cash. Josh is given a 20% interest in
return for his investment. The amount of the bonus to the old partners is
P0
a
P10,000
b
P18,000
c
P8,000
d

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Partnership Dissolution and Liquidation

Questions 1-40 of 40 | Page 1 of 1

A partnership liquidation occurs when

a new partner is admitted

When a new partner is admitted to a partnership

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