DE LA SALLE LIPA

College of Business, Economics, Accountancy and Management

Accountancy Department
Second Semester – A.Y. 2012-2013
Accounting Review 2
Quiz II – Partnership
Name:____________________________________________________________________Date:___________________________
_
Section:__________________________________________________________________Score:___________________________
Direction: Read and solve the following problems. Write the letter of your best answer on the space provided before
each number. Erasures are not allowed and considered wrong.
___1. On May 1,2010, the business assets of John and Paul appear below:
John Paul
Cash P 11,000 P 22,354
Accounts receivable 234,536 567,890
Inventories 120,035 260,102
Land 603,000
Building 428,267
Furniture & Fixtures 50,345 34,789
Other assets 2,000 3,600
Total P1,020,916 P1,317,002
Accounts payable 178,940 243,650
Notes payable 200,000 345,000
John, capital 641,976
Paul, capital 728,352
Total P1,020,916 P1,317,002
John and Paul agreed to form a partnership contributing their respective assets and equities subject to the following
adjustments:
 Accounts receivable of P20,000 in John’s books and P35,000 in Paul’s are uncollectible.
 Inventories of P5,500 and P6,700 are worthless in John’s and Paul’s respective books.
 Other assets of P2,000 and P3,600 in John’s and Paul’s respective books are to be written off.
Peter offered to join for a 20% ownership in the firm. How much cash should he contribute?
a. P330,870 c. P344,237
b. P337,487 d. P324,382

___2. On April 30,2010, Alex, Ben and Cesar formed a partnership by combining their separate business proprietorships.
Alex contributed cash of P500,000. Ben contributed property with a P360,000 carrying amount, a P400,000 original cost,
and P800,000 fair market value. The partnership accepted responsibility for the P350,000 mortgage attached to the
property. Cesar contributed equipment with a P300,000 carrying amount, a P750,000 original cost, and P550,000 fair
value. The partnership agreement specifies that profits and losses are to be shared equally but is silent regarding capital
contributions. What are the capital balances of the partners at April 30,2010?
Alex Ben Cesar
a. P500,000 P800,000 P550,000
b. P500,000 P450,000 P550,000
c. P500,000 P360,000 P300,000
d. P500,000 P400,000 P750,000

___3. In the calendar year 2010, the partnership of A and B realized a net profit of P240,000. The capital accounts of the
partners show the following postings:
A, Capital B, Capital
Debit Credit Debit Credit
Jan. 1 120,000 80,000
May 1 20,000 10,000
July 1 20,000
Aug. 1 10,000
Oct. 1 10,000 5,000
If the profits are to be divided based on average capital, the share of A and B, respectively are:
a. P129,600 and P110,400 c. P136,800 and P103,200
b. P144,000 and P96,000 d. P136,543 and P103,457
___4. Using the same data in number 3, if 20% interest based on the capital at the of the year is allowed and given and
the balance of the P240,000 profit is divided equally, the total share of A and B, respectively are:
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 a. P121,500 and P118,500 c. P123,000 and P117,000
b. P124,000 and P116,000 d. P122,625 and P117,375
___5. Mitz, Marc and Mart are partners sharing profits in the ratio of 5:3:2, respectively. As of December 31,2009, their
capital balances were P95,000 for Mitz, P80,000 for Marc, and P60,000 for Mart. On January 1,2010, the partners
admitted Vince as a new partner and according to their agreement, Vince will contribute P80,000 in cash to the
partnership and also pay P10,000 for 15% of Marc’s share. Vince will be given a 20% share in profits, while the original
partner’s share will be proportionately the same as before. After the admission of Vince, the total capital will be P330,000
and Vince’s capital will be P70,000.

What is the balance of Marc’s capital after the admission of Vince?

a. P72,600 c. P79,100
b. P74,600 d. P81,100

___6. A, B and C are partners, who share profits and losses in the ratio of 5:3:2, respectively. They agree to sell D 25% of
their respective capital and profits and losses ration for a total payment directly to the partners in the amount of P140,000.
They agree that positive asset revaluation to other assets of P60,000 is to be recorded prior to the admission of D. The
condensed Statement of Financial Position of the ABC Partnership is as follows:
Cash P 60,000 Liabilities P100,000
Noncash assets 540,000 A, Capital 250,000
B, Capital 150,000
_ C, Capital 100,000
Total P600,000 Total P600,000

What is the capital of A, B and C, respectively after payment and admission of D?

a. P187,500 – P112,500 – P75,000 c. P280,000 – P168,000 – P112,000
b. P210,000 – P126,000 – P84,000 d. P250,000 – P150,000 – P100,000

___7. The condensed Statement of Financial Position of Alex, Jay and John, as of March 31,2010 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 P293,000 Total P293,000
The income and los ratio is 50:25:25, respectively. The partners voted to dissolve their partnership and liquidate by selling
other assets in installments. P70,000 was realized on 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 cash was received by John?

a. P10,500 c. P21,250
b. P20,000 d. P32,500

___8. As of December 31, the books of AME Partnership showed capital balances of A – P40,000; M – P25,000 and E –
P5,000. The partner’s profit and loss ratio was 3:2:1 respectively. The partners decided to dissolve and liquidate. They
sold all the non-cash assets for P37,000 cash. After settlement of all liabilities amounting to P12,000, they still have
P28,000 cash left for distribution. What is the loss on realization of the non-cash assets?
a. P40,000 c. P44,000
b. P42,000 d. P45,000

___9. The statement of financial position of the partnership of Salve, Galo and Norma, who share in the profits and losses
in the ratio of 5:3:2, respectively is as follows:
Cash P 30,000 Liabilities P 50,000
Other assets 320,000 Salve, capital 80,000
Galo capital 115,000
__ Norma, capital 105,000
Total P 350,000 Total P350,000
The partnership is liquidated by installment, The first sale of non-cash assets with a book value of P150,000 realizes
P100,000.

How should the remaining cash be distributed?

Salve Galo Norma
a. P50,000 P30,000 P20,000

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 b. P40,000 P24,000 P16,000
c. 0 P31,000 P49,000
d. 0 P48,000 P32,000
___10. Roy and Gil are partners sharing profits and losses in the ratio of 1:2, respectively. On July 1,2010, they decided to
form the R&G Corporation by transferring the assets and liabilities of the partnership to the corporation in exchange for
the latter’s stock. The following is the post-closing trial balance of the partnership:
Debit Credit
Cash P 45,000
Accounts receivable(net) 60,000
Inventory 90,000
Fixed assets(net) 174,000
Liabilities P 60,000
Roy, capital 94,800
Gil, capital _ 214,200
P369,000 P369,000
It was agreed that adjustments be made to the following assets to be transferred to the corporation:
Accounts receivable P 40,000
Inventory 68,000
Fixed assets 180,600
The R&G Corporation was authorized to issue P100 par preferred stock and P10 par common stock. Roy and Gil agreed
to receive for their equity in the partnership 720 shares of the common stock each, plus even multiples of 10 shares of
preferred stock for their remaining interests. What is the distribution of stocks to Roy and Gil?
Roy Gil
Preferred Common Preferred Common
a. 785 shares 720 shares 1,384 shares 720 shares
b. 773 shares 750 shares 1,843 shares 750 shares
c. 758 shares 720 shares 1,834 shares 720 shares
d. 738 shares 720 shares 1,758 shares 720 shares

___11. Aldo, Bert, and Chris formed a partnership on April 30, with the following assets, measured at their fair values,
contributed by each partner:
Aldo Bert Chris
Cash P 10,000 P12,000 P30,000
Delivery trucks 150,000 28,000 -
Computers 8,500 5,100 -
Office furniture _ 3,500 2,500
Totals P168,500 P 48,600 P 32,500
Although Chris has contributed the most cash to the partnership, he did not have the full amount of P30,000 available and
was forced to borrow P20,000. The delivery truck contributed by Aldo has a mortgage of P90,000 and the partnership is to
assume responsibility for the loan. The partners agreed to equalize their interest. Cash settlement among the partners are
to be made outside the partnership. Using the Bonus Method:
a. Bert and Chris should pay Aldo, P4,600 and P20,700 respectively
b. Aldo should pay Bert and Chris, P25,300
c. Bert should pay Aldo, P25,300 and Chris, P20,700
d. Chris should pay Aldo, P25,300 and Bert, P4,600

___12. Details regarding the book values of May’s business assets and liabilities and their corresponding valuations are:
Book Values Agreed Valuations
Accounts receivable P 58,000 P 58,000
Allowance for bad debts 4,200 5,000
Merchandise inventory 98,400 107,000
Store equipment 32,000 32,000
Accumulated depreciation – store equipment 19,000 16,400
Office equipment 27,000 27,000
Accumulated depreciation – office equipment 14,200 8,600
Accounts payable 56,000 56,000
Nora agrees to invest cash of P42,000 and merchandise valued at current market price. The value of the merchandise to
be invested by Nora and the cash to be invested by May, respectively are:
a. P90,000 and P62,000 c. P48,000 and P138,000
b. P252,000 and P138,000 d. P48,000 and P62,000

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___13. A, B and C are partners who share profits and losses in the ratio of 5:3:2, respectively. They agree to sell D 25% of
their respective capital and profits and losses ratio for a total payment directly to the partners in the amount of P140,000.
They agree that positive asset revaluation of P60,000 is to be recorded prior to admission of D. The condensed balance
sheet of the ABC Partnership is as follows:
Cash P 60,000 Liabilities P100,000
Non-cash assets 540,000 A, Capital 250,000
B, Capital 150,000
C, Capital 100,000
Total P600,000 Total P600,000
What is the capital of A, B and C, respectively after the payment and admission of D?
a. P187,500 – P112,500 – P75,000 c. P280,000 – P168,000 – P112,000
b. P210,000 – P126,000 – P84,000 d. P250,000 – P150,000 – P100,000

___14. The following is the condensed balance sheet of the partnership of Jo, Li and Bi who share profits and losses in
the ratio of 4:3:3.
Cash P 180,000 Accounts payable P 420,000
Other assets 1,660,000 Bi, Loan 60,000
Jo, receivable 40,000 Jo, capital 620,000
Li, capital 400,000
Bi, capital 380,000
Total P1,880,000 Total P1,880,000
Assume that the asses and liabilities are fairly valued on the balance sheet and the partnership decides to admit Mac as a
new partner, with a 20% interest. No asset revaluation or bonus is to be recorded. How much Mac should contribute in
cash or other assets?
a. P350,000 c. P355,000
b. P280,000 d. P284,000

___15. Carlos and Deo are partners who share profits and losses in the ratio of 7:3, respectively. On October 5, 2008,
their respective capital accounts were as follows:
Carlos – P35,000 and Deo – P30,000
On that date they agreed to admit Sotto as a partner with a one-third interest in the capital and profits and losses, and
upon his investment of P25,000. The new partnership will begin with a total capital of P90,000. Immediately after Sotto’s
admission, what are the capital balances of Carlos, Deo and Sotto, respectively?
a. P30,000 – P30,000 – P30,000 c. P31,667 – P28,333 – P30,000
b. P31,500 – P28,500 – P30,000 d. P35,000 – P30,000 – P25,000

___16. Mitz, Marc and Mart are partners sharing earnings in the ratio of 5:3:2 respectively. As of December 31,2007, their
capital balance showed P95,000 for Mitz, P80,000 for Marc, and P60,000 for Mart. On January 1,2008 the partnership
admitted Vince as a new partner and according to the partnership agreement, Vince will contribute P80,000 in cash to the
partnership and will also pay P10,000 for 15% of Marc’s share. Vince will share 20% in the earnings while the ratio of the
original partners will remain proportionately the same as before Vince admission. After Vince’s admission, the total capital
of the partnership will be P330,000 while Vince’s capital account will be P70,000. What is the balance of Marc’s capital
account after the admission of Vince?
a. P81,100 c. P74,600
b. P79,100 d. P72,600

___17. NN, OO and PP are partners with present capital balances of P50,000, P60,000 and P20,000 respectively. The
partners share profits and losses according to the following percentages: 60% for NN, 20% for PP and 20% for PP. QQ is
to join the partnership upon contributing P20,000 cash, plus a machine with a fair market value of P40,000 to the
partnership in exchange for a 25% interest in the capital and 20% interest in the profits and losses. The existing assets of
the partnership are undervalued by P22,000. The original partners will share the balance of profits and losses in their
original ratios. What is the capital balance of NN, OO, PP and QQ, respectively in the new partnership assuming there is
positive asset revaluation only?
a. P67,400 – P65,800 – P25,800 – P53,000
b. P50,000 – P60,000 – P20,000 – P60,000
c. P80,000 – P70,000 – P20,000 – P20,000
d. P80,000 – P70,000 – P30,000 – P60,000

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___18. Ace, Boy and Cid are partners sharing profits in the ratio of 3:3:2. On July 31, their capital balances are as follows:
Ace – P700,000 Boy – P500,000 Cid – P400,000
The partners agreed to admit Deo on the following terms:
1. Deo is to pay Ace P500,000 for ½ interest of Ace’s interest.
2. Deo is also to invest P400,000 in the partnership.
3. The total capital of the partnership is to be P2,400,000 of which Deo’s interest is to be 25%.
What is the capital balance of Ace, Boy and Cid, respectively?
a. P206,250 – P206,250 – P137,700 c. P556,250 – P706,250 – P537,500
b. P350,000 – P500,000 – P400,000 d. P500,000 – P400,000 – P350,000

___19. A, B and C are partners in the accounting firm. Their capital account balances at year-end were: A – P90,000; B –
P110,000; C – P50,000. They share profits and loses in a 4:4:2 ratio, after the following special terms:
1. Partner C is to receive a bonus of 10% of the net income after bonus.
2. Interest of 10% shall be paid on that portion of a partner’s capital in excess of P100,000.
3. Salaries of P10,000 and P12,000 shall be paid to partners A and C, respectively.
What is the total profit share of partner C if the net income of the partnership is P44,000 for the year?
a. P7,800 c. P19,400
b. P16,800 d. P19,800

___20. A and B entered into a partnership as of March 1,2008 by investing P125,000 and P75,000, respectively, they
agreed that A, as the managing partner, was to receive a salary, P30,000 per year and a bonus computed at 10% of the
net profit after adjustment for the salary; the balance of the profit was to be distributed in the ratio of their original capital
balances. On December 31,2008, account balances were as follows:
Cash P70,000 Accounts payable P60,000
Accounts receivable 67,000 A, capital 125,000
Furniture & fixtures 45,000 B, capital 75,000
Sales return 5,000 A, drawing (20,000)
Purchases 196,000 B, drawing (30,000)
Operating expenses 60,000 Sales 233,000
Inventories on December 31,2008 were as follows: supplies – P2,500; merchandise – P73,000; prepaid insurance was
P950 while accrued expenses were P1,550. Depreciation rate was 20% per year. What is the capital balances on
December 31,2008 of A and B, respectively, after closing the net profit and drawing accounts?
a. P135,940 and P47,960 c. P139,860 and P48,680
b. P139,540 and P49,860 d. P142,350 and P47,670

___21. Garcia and Henson formed a partnership on January 2,2008 and agreed to share profits 90% and 10%,
respectively. Garcia contributed capital of P25,000. Henson 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:
Capital accounts are to be credited annually with interest at 5% of beginning capital.
Henson is to be paid salary of P1,000 a month.
Henson is to be received a bonus of 20% of income calculated before deducting his salary and interest on both
capital accounts.
Bonus, interest and Henson’s salary are to be considered partnership expenses.
The partnership 2008 income statement follows:
Revenues P96,450
Expenses(including salary, interest and bonus) 49,700
Net income P46,750
What is Henson’s bonus?
a. P11,688 c. P15,000
b. P12,000 d. P15,738

___22. On January 1,2008, A, B, C and D formed Bekha Trading Co., a partnership, with capital contributions as follows:
A – P50,000; B – P25,000; C – P25,000; and D – P20,000. The partnership contract provided that each partner shall
receive a 5% interest on contributed capital, and that A and B shall receive salaries of P5,000 and P3,000, respectively.
The contract also provided that C shall receive a minimum of P2,500 per annum, and D a minimum of P6,000 per annum,

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which is inclusive of amounts representing interest and share of remaining profits. The balance of the profits shall be
distributed to A, B, C and D in a 3:3:2:2 ratio. What amount should be earned by the partnership before any charge for
interest and salaries, so that A mar receive an aggregate of P12,500 including interest, salary and share of profit?
a. P16,667 c. P30,667
b. P30,000 d. P32,333

___23. Herm, Mar and Ama formed a partnership on January 1,2008 and contributed P150,000, P200,000 and P250,000,
respectively. The Articles of Co-partnership provides that the operating income be shared among the partners as follows:
As salary for Herm in the amount of P24,000, for Mar – P18,000 and for Ama – P12,000. Interest of 12% on the average
capital during 2008 of the three partners and the remainder in the ratio of 2:4:4 respectively. The operating income for the
year ended December 31,2008 – P176,000. Herm contributed additional capital on July 1 – P30,000 and made a drawing
on October 1 – P10,000. Mar contributed additional capital on August 1 – P20,000 and made a drawing on October 1 –
P10,000 and Ama made a drawing of P30,000 on November 1. What is the capital balances of Herm, Mar and Ama,
respectively on December 31,2008?
a. P179,680 – P229,360 – P239,360 c. P189,680 – P239,360 – P269,360
b. P179,760 – P229,520 – P239,520 d. P223,180 – P272,060 – P280,760

___24. The partnership of Gary, Jerome and Paul was formed on January 1,2008. The original investments were as
follows: Gary – P80,000; Jerome – P120,000 and Paul – P180,000. According to the partnership agreement, net income
or loss will be divided among the respective partners as follows: Salaries of P12,000 for Gary; P10,000 for Jerome; and
P8,000 for Paul. Interest of 8% on the average capital balances during the year of Gary, Jerome and Paul. Remainder
divided equally. The net income of the partnership for the year ended December 31,2008 was P70,000. Gary invested an
additional P20,000 in the partnership on July 1,2008. Paul withdrew P30,000 from the partnership on October 1,2008.
Gary, Jerome and Paul made regular drawings against their shares of net income during 2008 for P10,000 each. What is
the capital balances of Gary, Jerome and Paul, respectively as of December 31,2008?
a. P112,333 – P132,733 – P164,934 c. P92,000 – P102,000 – P134,934
b. P102,333 – P122,733 – P154,934 d. P122,333 – P132,733 – P164,934

___25. KK, SS and WW formed a partnership on January 1,2008. Each contributed P144,000. The salaries were to be
allowed as follows: KK – P36,000; SS – P36,000 and WW – P54,000. Drawings were equal to salaries and be taken out
evenly throughout the year. With sufficient partnership net income, KK and SS split a bonus equal to 25% of partnership
net income after salaries and bonus (in no event could bonus go below zero). Remaining profits were to be divided as
follows: 30% for KK; 30% for SS and 40% for WW. For the year, partnership net income was P144,000. What are the
capital balances of KK, SS, and WW, respectively on December 31,2008?
a. P186,120 – P186,120 – P203,760 c. P150,120 – P150,120 – P149,760
b. P151,200 – P151,200 – P149,400 d. P150,600 – P150,600 – P148,800

___26. TM partnership begins its first year of operations with the following capital balances: Tan, capital – P200,000 and
May,capital – P100,000. According to the partnership agreement, all profits will be distributed as follows: a) Tan will be
allowed a monthly salary of P20,000 with P10,000 assigned to May. b) The partners will be allowed with interest equal to
10% of the capital balance as of the first day of the year. c) Tan will be allowed a bonus of 10% of the net profit after
bonus. d) The remainder will be divided on the basis of the beginning capital for the first year and equally for the second
year. e) Each partner is allowed to withdraw up to P10,000 a year. Assume that the net loss for the first year of operations
is P15,000 with net income of P55,000 in the subsequent year. Assume further that each partner withdraws the maximum
amount from the business each period. What is the balance of Tan’s capital account at the end of the second year?
a. P264,750 c. P180,000
b. P284,750 d. P184,750

___27. On June 30,2008, the account balances of the partnership of Cruz, Merced and Prieto, together with their
respective profit and los ratio, were as follows: Assets at cost – P180,000; Cruz,loan – P9,000; Cruz, capital (20%) –
P42,000; Merced,capital(20%) – P39,000; and Prieto,capital – P90,000. Cruz decided to retire from the partnership. By
mutual agreement, the assets are to be adjusted to their fair value of P216,000 at June 30,2008. It was agreed that the
partnership would pay Cruz P61,200 cash for Cruz’s partnership interest, including Cruz’s loan which is to be repaid in full.
No goodwill is to be recorded. After Cruz’s retirement, what is the balance of Merced capital account?
a. P36,450 c. P45,450
b. P39,000 d. P46,200

___28. Cen, Deng and Lala are partners with capital balances on December 31,2008 of P300,000, P300,000 and
P200,000 respectively. Profit are share equally. Lala wishes to withdraw and it is agreed that she is to take certain
furniture and fixtures with second hand value of P50,000 and note for the balance of her interest. The furniture and

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fixtures are carried in the books at P65,000. Brand new, the furniture and fixtures may cost P80,000. Lala’s acquisition for
the second-hand furniture will result to:
a. Reduction in capital of P15,000 each for Cen and Deng
b. Reduction in capital of P10,000 for Lala
c. Reduction in capital of P5,000 each for Cen, Deng and Lala
d. Reduction in capital of P7,500 each for Cen and Deng

___29. Pastor, Ramon and Sendong were partners with capital balances as of January 1,2008 of P100,000, P150,000
and P200,000 respectively, sharing profit and losses on a 5:3:2 ratio. On July 1,2008, Pastor withdraw from the
partnership. Partners agreed that at the time of withdrawal, certain inventories had to be revalued at P70,000 from its cost
of P50,000. For the six month period ending June 30,2008, the partnership generated a net income of P140,000. Further,
partners agreed to pay Pastor P195,000 for his interest and that the remaining partner’s capital accounts would be
adjusted for whatever asset revaluation the settlement would generate. The payment to Pastor included a positive asset
revaluation aside from the inventory revaluation in the amount of:
a. P15,000 c. P50,000
b. P25,000 d. P42,500

___30. On July 10,2008, Lolo wants to retire from JKL partnership. The balance sheet for the JKL Partnership before
closing on that date shows the following:
Cash P148,000 Liabilities P 90,000
Receivables, net 72,000 Jose, capital 200,000
Equipment, net 270,000 Kiko, capital 96,000
Intangible asset, net 60,000 Lolo, capital 84,000
_ Income summary 80,000
Total P550,000 Total P550,000
Jose, Kiko and Lolo share profits and losses in the ratio of 5:3:2, respectively. The partners agreed to write off the goodwill
and to the adjust the equipment to their fair market values of P230,000. Lolo is paid P110,000 cash for his total interest.
Assuming the use of the total positive asset revaluation, what is the total assets of the new partnership after the retirement
of Lolo?
a. P554,000 c. P474,000
b. P490,000 d. P550,000

___31. A, B and C are partners in a textile distribution business, sharing profits and losses equally. On December
31,2008, partnership capital and the partner’s drawing were as follows:
A B C Total
Capital P100,000 P80,000 P300,000 P480,000
Drawing 60,000 40,000 20,000 120,000
The partnership was unable to collect on its trade receivables, and it as forced to liquidate. The operating profits for 2008
amounted to P72,000, and was all exhausted including the partnership assets. Unsettled creditor’s clams at December
31,2008 amounted to P84,000. B and C have substantial private resources, but A has no available free assets. What is
the final cash contribution to C?
a. P162,000 c. P84,000
b. P108,000 d. P78,000

___32. The partners Aiko, Bren, Cinia and Dior who share profits and losses at 30%, 30%, 20% and 20% respectively
decided to liquidate. All partnership assets are to be converted into cash. Prior to the liquidation, the condensed balance
sheet is as follows:
Cash P 100,000 Liabilities P 750,000
Other assets 1,800,000 Bren,loan 60,000
Dior, loan 50,000
Aiko, capital 420,000
Bren, capital 315,000
Cinia, capital 205,000
Dior, capital 100,000
Total P1,900,000 Total P1,900,000
The non-cash assets realize P800,000. All the partners are solvent, and can contribute any additional cash to cover any
deficiency. In the process of liquidation, deficiency will occur and will require additional investment as follows:
a. Cinia at P75,000 c. Dior at P50,000
b. Dior and Cinia for P50,000 and P7,500 respectively d. None

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___33. The partnership pf Javier, Karim and Laurel share profits and losses in the ratio of 5:3:2, respectively. The partners
voted to dissolve the partnership when its assets, liabilities and capital were as follows:
Cash P 40,000 Liabilities P 60,000
Other assets 210,000 Javier, capital 48,000
Karim, capital 72,000
Laurel, capital 70,000
Total P250,000 Total P250,000
The partnership will be liquidated over a prolonged period of time, As cash is available it will be distributed to the partners.
The first sale of non-cash assets having a book value of P120,000 realized P90,000. What is the cash to be distributed to
Javier, Karim and Laurel, respectively after the first sale?
a. P0 – P28,800 – P41,200 c. P35,000 – P21,000 – P14,000
b. P0 – P30,000 – P40,000 d. P45,000 – P27,000 – P18,000

___34. The following balance sheet is for the partnership of D, E and F:

Cash P 20,000 Liabilities P 50,000
Other assets 180,000 D, capital (40%) 37,000
E, capital (40%) 65,000
F, capital (20%) 48,000
Total P200,000 Total P200,000
If the firm as shown on the original balance sheet is dissolved and liquidated by selling assets in installments, the first sale
of non-cash assets having a book value of P90,000 realizes P50,000 and cash of P17,000 after settlement with creditors
is distributed. What is the cash to be received by partner D, E and F on the first installment?
a. P8,000 – P8,000 – P4,000 c. P0 – P13,333 – P6,667
b. P6,667 – P6,667 – P6,666 d. P0 – P1,000 – P16,000

___35. On November 30,2008, BEE, CEE and DEE decided to liquidate BCD partnership. Their capital balances and
profit and loss on this date are as follows: BEE (40%) – P50,000; CEE (30%) – P60,000; and DEE (30%) – P20,000. The
net income from January 1 to November 30,2008 is P44,000. On November 30,2008, cash and liabilities are P40,000 and
P90,000, respectively. For Bee to receive P55,200 in full settlement of his interest in the firm, how much must be realized
from the sale of the firm’s non-cash assets?
a. P233,000 c. P149,000
b. P255,000 d. P193,000

___36. On July 1,2008, the Chess Partnership has the following balance sheet:
Cash P 20,400 Accounts payable P122,400
Other assets 219,600 Rook, loan 14,400
Rook, capital(50%) 28,800
_ King, capital (50%) 74,400
Total P240,000 Total P240,000
As of July 1,2008, the partners have personal net worth as follows:
Rook King
Assets P62,400 P91,200
Liabilities 56,400 122,400
The personal net worth of each partner does not include any amounts due to or from the partnership. Assume the other
assets are sold for P123,600 after incurring liquidation expenses of P4,800. How much should King receive?
a. P12,000 c. P24,000
b. P22,800 d. P16,800

___37. Bel, Col and Del, partners of the BCD partnership, share profits and losses in the ratio of 5:3:2 respectively. On
December 31,2008, the end of an unprofitable year, they decided to liquidate the partnership. The partner’s capital;
account balances on the date were as follows: Bel – P22,000; Col – P24,900; and Del – P15,000. The liabilities in the
balance sheet amounted to P30,000 including a loan of P10,000 payable to Bel. The cash balance was P6,000. The
partners planned to realize the non-cash assets in installment and to distribute as it becomes available. All three partners
are solvent. If Bel received a total of P20,000 as a result of liquidation, what was the total amount realized by the
partnership on the non-cash assets?
a. P85,900 c. P67,900
b. P91,900 d. P61,900

___38. On December 31,2008, the accounting records of the STU Partnership included the following ledger account
balances: (Dr) Cr
Sy, drawing (24,000)

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 Uy, drawing (9,000)
Ty, loan 30,000
Sy, capital 123,000
Ty, capital 100,500
Uy, capital 108,000
Total assets of the partnership amounted to P478,500, including P52,500 cash. The partnership was liquidated on
December 31,2008 and Uy received P83,250 cash pursuant to the liquidated. Sy, Ty and Uy share profits and losses in a
5:3:2 ratio, respectively. What is the loss on realization of assets and cash received by Sy, respectively?
a. P178,750 and P35,625 c. P23,750 and P37,125
b. P78,750 – P59,625 d. P123,750 and P13,125

___39. Pepe and Pilar started a partnership some years ago and managed to operate profitably for several years.
Recently however, they lost a substantial legal suit and incurred unexpected losses on accounts receivable and
inventories. As a result, they decided to liquidate. They sold all assets and only P162,000 was available to pay liabilities,
which amounted to P297,000. Their capital account balances before the liquidation and their profit and loss sharing ratios
are shown below: Capital balances P/L ratios
Pepe P207,000 60%
Pilar 121,500 40%
Pepe is personally insolvent after investing cash to pay the unpaid creditors, but Pilar has personal assets in excess of
P900,000. In the settlement to partners, how much cash should Pepe receive?
a. P63,900 c. P15,300
b. P0 d. P63,000

___40. Partners Bee, Cee, Dee and Gee who share profits 5:3:1:1, respectively, decide to liquidate their partnership.
Capital balances before liquidation are: Bee – P60,000; Cee – P40,000; Dee – P30,000 and Gee – P10,000. The partners
agree to the following: a) Partnership’s computer equipment with a book value of P12,000 is to be taken over by partner
Bee at a price of P15,000. b) Partnership’s liabilities are to be paid off and the balance of cash on hand, P30,000 is to be
divided in a manner that will avoid the need for any possible recovery of cash from a partner. How much of the P30,000
cash to be distributed to partner Cee?
a. P10,000 c. P20,000
b. P5,000 d. P15,000

___41. Gardo and Gordo formed a partnership on July 1,2011 to operate two stores to be managed by each of them.
They invested P30,000 and P20,000 and agreed to share earnings 60% and 40% respectively. All their transactions were
for cash, and all their subsequent transactions were handled through their respective bank accounts as summarized
below: Gardo Gordo
Cash receipts P79,100 P65,245
Cash disbursements 62,275 70,695
On October 31,2011, all remaining noncash assets in the two stores were sold for cash of P60,000. The partnership was
dissolved, and cash settlement was affected. In the distribution of the P60,000 cash, Gardo received:
a. P24,000 c. P34,000
b. P26,000 d. P36,000

___42. AA, BB and CC are partners with average capital balances during 2011 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
AA and P82,625 to CC, the residual profits or loss is divided equally. In 2011, the partnership had a net loss of P125,624
before the interest and salaries to partners. By what amount should AA’s and CC’s capital account change – increase
(decrease) AA CC AA CC
a. P30,267 (P40,448) c. (P40,844) P31,235
b. P29,476 P17,536 d. P28,358 P32,458

___43. A, B and C are partners in an accounting firm. Their capital balances at year-end were A – P90,000; B – P110,000
and C – P50,000. They share profits and losses on a 4:4:2 ratio, after the following special terms: a) Partner C is to
receive a bonus of 10% of net income after the bonus. b) Interests of 10% shall be paid on that portion of a partner’s
capital in excess of P100,000. c) Salaries of P10,000 and P12,000 shall be paid to partners A & C, respectively. What is
the total profit share of partner C if the net income for the year was P44,000?
a. P7,800 c. P19,400
b. P16,800 d. P19,800

___44. X, Y and Z, a partnership formed on January 1,2011 had the following initial investments: X – P100,000; Y –
P150,000 and Z – P225,000. The partnership agreement states that profits and losses are to be shared equally by the

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partners after consideration is made for the following: a) Salaries allowed to partners – P60,000 for X and P48,000 for Y
and P36,000 for Z. Average partner’s capital balances during the year shall be allowed 10%. The following are the
additional data: a) On June 30,2011, X invested an additional P60,000. b) Z withdrew P70,000 from the partnership on
September 30,2011. c) Share in the remaining partnership profit was P5,000 for each partner. What is the total partnership
capital on December 31,2011?
a. P405,000 c. P480,000
b. P671,500 d. P672,750

___45. S, D, R and P are partners sharing earnings in the ratio of 3/21. 4/21, 6/21 and 8/21, respectively. The balances of
their capital accounts on December 31,2011 are as follows: S – P1,000; D – P25,000; R – P25,000 and P – P9,000. The
partners decide to liquidate and they accordingly convert the noncash assets into P23,200 cash. After paying the liabilities
amounting to P3,000, they have P22,200 to divide. Assume that a debit balance in any partner’s capital is uncollectible.
After the P22,200 was divided, what is the capital balance of D?
a. P3,200 c. P4,500
b. P3,920 d. P17,800

___46. The PQR partnership is being dissolved. All liabilities have been paid and the remaining assets are being realized
gradually. The equity of the partners is as follows:
Partner’s Accounts Loans to (from) partnership P/L Ratio
P P24,000 P6,000 3
Q 36,000 - 3
R 60,000 (P10,000) 4
The second cash payment to any partner under a program of priorities shall be made thus:
a. To R P2,000 c. To R P8,000
b. To Q P6,000 d. To Q P6,000 and R, P8,000

___47. After operating for five years, the books of the partnership of Bo and By showed the following balances: Net assets
– P169,000; Bo, capital – P110,500 and By, capital – P58,500. If liquidation takes place at this point and the net assets
are realized at book value, the partners are entitled to receive:
a. Bo – P117,000 & By – 52,000 c. Bo – P84,500 & By – P84,500
b. Bo – P126,750 & By – P42,250 d. Bo – P110,500 & By – P58,500

___48. The partners of the M & N partnership started liquidating their business on July 1,2011 at which time the partners
were sharing profits and losses 40% to M and 60% to N. The balance sheet of the partnership appeared as follows:
Cash P 8,800 Accounts payable P 32,400
Receivable 22,400 M, capital P31,000
Inventory 39,400 M, drawing (5,400) 25,600
Equipment P65,200 N, capital P33,200
Acc. Dep. (30,800) 34,400 N, drawing (200) 33,000
Total P105,000 N, loan 14,000
Total P105,000
During the month of July, the partners collected P600 of the receivables with no loss. The partners also sold during the
month the entire inventory on which they realized a total of P32,400. What is the cash paid to M on July 31,2011?
a. P25,600 c. P320
b. P5,400 d. P0

___49. Partners Art and Tone who share equally in profits and losses have the following balance sheet as of 12/31/2011:
Cash P120,000 Accounts payable P172,000
Accounts receivable 100,000 Acc. depreciation 8,000
Inventory 140,000 Art, capital 140,000
Equipment 80,000 Tony, capital; 120,000
Total P440,000 Total P 440,000
They agreed to incorporate their partnership with the new corporation absorbing the net assets after the following
adjustments: provision for bad debts of P10,000; restatement of the inventory at its fair value of P160,000; and recognition
of further depreciation on the equipment of P3,000. The corporation’s capital stock is to have a par value of P100, and the
partners are to be issued corresponding total shares equivalent to their adjusted capital balances. What is the total par
value of the shares issued to partners Art and Tony?
a. P260,000 c. P273,000
b. P267,000 d. P280,000

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___50. Lancelot is trying to decide whether to accept a salary of P40,000 or a salary of P25,000 plus a bonus of 10% of
net income after salary and bonus as a means of allocating profit among the partners. Salaries traceable to the other
partners are estimated to be P100,000. What amount of income would be necessary so that Lancelot would consider the
choices to be equal?
a. P165,000 c. P265,000
b. P290,000 d. P305,000

Solution in Quiz in Partnership

1. D
2. B
3. D
4. A
5. C
6. B
7. B
8. B
9. C
10. C
11. A
12. D
13. B
14. A
15. B
16. B
17. D
18. C
19. C
20. B
21. C
22. D
23. D
24. A
25. C
26. A
27. C
28. C
29. A
30. B
31. D
32. C
33. A
34. D
35. D
36. B
37. D
38. B
39. A
40. A
41. B
42. A
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 43. C
44. D
45. B
46. D
47. D
48. C
49. B
50. B
+

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