Part Form
Part Form
Part Form
ners. Their current profit and loss ratios (70/30) are being changed to
(60/40). The partners decide to adjust their capital accounts at the date of the change in the profit and
loss ratios to reflect the difference between market value and book value of assets and liabilities. At the
date of the change, land has a market value of P250,000 and a book value of P120,000. how much will
Craig’s capital account be adjusted at the date of the change in the profit and loss ratios?
Answer:
d. P13,000 decrease
55. James and Bruce are partners. They have both shared profits and losses 70/30 for several years.
the partnership profit allocation agreement is currently being modified to 60/40. At the date of the
change, the partners choose to revalue assets with market value different from book value. One asset
revalued is a building with a book value of P370,000 and a market value of P520,000. One year after the
profit and the loss ratio is changed the building is sold for P650,000. What is the amount of change to
Bruce’s Capital account at the date the building is revalued?
Answer:
c. P45,000
56. Using the same information in No. 55, What is the amount of change to Bruce’s capital account
at the date the building is sold?
Answer:
d. P52,000
57. Johnson and Pritchard are partners. They are changing the profit and loss ratios from the
current 60/40 to 70/30. at the date of the change. vacant land owned by the partnership has a book
value of P50,000 and a market value of P60,000. the partners choose to prepare an itemized list of
assets wit market values different from book values. If the land is sold in the future for P80,000, how
much of the gain will be assigned to Johnson?
Answer:
b. P20,000
58. If the land is sold in the future for P80,000, how much of the gain will be assigned to Pritchard?
Answer:
b. P10,000
59. Karen and Andrea are currently changing their partnership profit and loss ratios from 75/25 to
60/40. they have created a list of assets that have the market and book value differences. One of the
assets is a building with a P300,000 market value and P200,000 book value. Two years after changing the
profit and loss ratios, the building is sold for P380,000. How much of the profit is allocated to Karen?
Answer:
b. P123,000
60. Eric and Philip have been partners for several years. During the time they have shared profits
and losses (60/40). They are currently revising the profit and loss ratios to (70/30). Eric and Philip decide
to adjust the capital accounts at the date of the change to reflect the difference between market value
and book value of assets and liabilities. At the date of the change, the partnership owns a building with a
book value of P350,000 and a market value of P600,000. How much will Eric’s capital account be
adjusted at the date of change in the profit and loss ratios?
Answer:
c. P25,000 decrease
61. Capital balances and profit and loss sharing ratios of the partners in the BIG Entertainment
Gallery are as follows:
Betty needs money and agrees to assign half of her interest in the partnership to yessir for P90,000 cash.
Yessir pays directly to betty. Yessir does not become a partner.
What is the total capital of the BIG Partnership immediately after the assignment of the interest to
Yessir?
Answer:
d. P400,000
62. Jenna is about to purchase same of Cynthia’s partnership interest. Cynthia currently has
partnership equity of P84,500. If Jenna pays Cynthia P30,000 for 30 percent of her capital, what amount
will be recorded in the partnership accounting records?
Answer:
b. Jenna Cynthia
63. Presented below is the condensed balance sheet of the partnership of KK, LL and MM who
share profits and losses in the ratio of 6:3:1, respectively:
The partner agree to sell NN 20% of their respective capital and profit and loss interests for a total
payment of P90,000. The payment by NN is to be made directly to the individual partners. The capital
balances of KK, LL and MM, respectively after admission of NN are:
Answer:
Answer:
65. XX, YY and ZZ are partners who share profits and losses in the ratio of 5:3:2, respectively. They
agree to sell a 25% of their respective capital and profits and losses ratio for a total payment directly to
the partners in the amount of P140,000.00. They agree that goodwill or revaluation of assets of P60,000
is to be recorded prior to admission of AA. The condensed balance sheet of the XYZ partnership is as
follows:
The capital of XX, YY and ZZ respectively after the payment and admission of AA are:
Answer:
66. On June 30, 20x5, the balance sheet of western Marketing, a partnership, is summarized as
follows:
Answer:
b. P18,750
67. PP contributed P24,000 and CC contributed P48,000 to form a partnership, and they agreed to
share profits in the ratio of their original capital contributions. During the first year of operations, they
made a profit of P16,290; PP withdrew P5,050 and CC P8,000. At the start of the following year, they
agreed to admit GG into the partnership. He was to receive a one-fourth interest in the capital and
profits upon payment of P30,000 to PP and CC, whose capital accounts were to be reduced by transfers
to GG’s capital account of amounts sufficient to bring them back to their original capital ratio. How
should the P30,000 paid by GG be divided between PP and CC.
Answer:
68. The capital accounts of the partnership of NN, VV, and JJ on June 1, 20x5 are presented below
with their respective profit and loss ratios:
On June 1, 20x5 LL is admitted to the partnership when LL purchased, for P132,000, a proportionate
interest from NN and JJ in the net assets and profits of the partnership. As a result of a transaction LL
acquired a one-Fifth interest in the net assets and profits of the firm. What is the combined gain realized
by NN and JJ upon the sale of a portion of their interest in the partnership to LL?
Answer:
b. P43,200
69. Sam and Ray are partners with capital accounts of P150,000 and P225,000, respectively. They
are considering allowing Richard to purchase 30 percent of Ray’s equity. At the date of the proposed
transaction, Sam and Ray want to revalue the partnership’s assets and allocate any differences based on
their 40/60 profit sharing agreement. Assume that the net market versus book value differences is
P100,000. What amount would Richard pay for the 30 percent interest?
Answer: