1.

Ann contributed ₱20,000 cash while Chok contributed ₱28,000 in cash and office equipment which cost
with a fair market value of ₱13,000, to a new partnership. The journal entry to record the partnership inves
Ann and Chok would have credit of Ann, Capital and Chok, Capital, respectively, in the amounts of
D A.₱20,000 and ₱44,000
B.₱44,000 and ₱20,000
C.₱41,000 and ₱20,000
D.₱20,000 and ₱41,000

2.On November 1, Audrey and Shon formed a partnership with Audrey contributing land valued at ₱180,0
building valued at ₱265,000. Shon contributed ₱195,000 in cash. The partnership assumed the mortgage o
property of ₱130,000. Profits and losses are to be shared equally. What are the capital balances of Audrey
respectively, after recording these transactions?
A
A.₱315,000 and ₱195,000
B.₱380,000 and ₱130,000
C.₱445,000 and ₱195,000
D.₱255,000 and ₱255,000

3.Jose Mercado, a sole proprietor, entered into partnership with another individual. The partnership would
books of Mercado. Mercado's investment in the partnership included equipment that was purchased for ₱4
equipment has a carrying value of ₱22,000 and a net agreed-upon value of ₱27,000. In the financial record
partnership, this equipment and its accumulated depreciation should be recorded respectively at
C
A.₱22,000 and ₱0
B.₱27,000 and ₱0
C.₱45,000 and ₱23,000
D.₱45,000 and ₱18,000

4.On December 1, Deana and Inan formed a partnership agreeing to share profits and losses in the ratio of
respectively. Deana invested a parcel of land that cost her ₱25,000. The land could be sold for P50,000. I
invested ₱30,000 cash. How much should be the capital balance of Deana after formation?
D A.₱25,000
B.₱30,000
C.₱60,000
D.₱50,000

5.On March 1, Manny and Marie formed a partnership with each contributing the following:
Manny Marie
Cash ₱300,000 ₱ 700,000
 Machinery and Equipment 250,000 750,000
Building - 2,250,000
Furniture and Fixtures 100,000 -
D The building is subject to mortgage loan of ₱800,000, which would be assumed by the partnership. Agreem
provides that Manny and Marie share profits and losses at 30% and 70%, respectively. The balance of Ma
account right after formation should be
A.₱3,700,000
B.₱3,140,000
C.₱3,050,000
D.₱2,900,000

6. Assume the same information in Item 5, except that the mortgage loan is not assumed by the partnership
balance of Marie’s capital account right after formation should be
A.₱3,700,000
A
B.₱3,140,000
C.₱3,050,000
D.₱2,900,000

7.April and Renz, sole proprietors, formed a partnership on September 1. Their books on this date showed
following:
April Renz
Cash ₱15,000 ₱37,500
Accounts Receivable 540,000 225,000
Merchandise Inventory - 202,500
Machinery and Equipment 150,000 270,000
Total ₱705,000 ₱735,000
Accounts Payable ₱135,000 ₱240,000
April, Capital 570,000 -
D Renz, Capital - 495,000
Total ₱705,000 ₱735,000
The partners agreed that the machinery and equipment of April were underdepreciated by ₱15,000 and
those of Renz’s by ₱45,000. Allowance for Doubtful Accounts had to be set up amounting to ₱120,000
for April and ₱45,000 for Renz. The partnership agreement provides for a profit and loss ratio and
capital interest of 60% to April and 40% to Renz. How much cash should April invest to bring the
partner’s capital balances proportionate to profit and loss ratio?
A.₱52,500
B.₱102,500
C.₱142,500
D.₱172,500

8. The books of Lina and Mina showed:

 Lina Mina
Cash ₱ 11,000.00 ₱ 22,354.00
Accounts Receivable ₱ 234,536.00 ₱ 567,890.00
Inventories ₱ 120,035.00 ₱ 260,102.00
Land ₱ 603,000.00 -
Building - ₱ 428,267.00
Furniture and Fixtures ₱ 50,345.00 ₱ 34,789.00
Other Assets ₱ 2,000.00 ₱ 3,600.00
Total ₱ 1,020,916.00 ₱ 1,317,002.00
Accounts Payable ₱ 178,940.00 ₱ 243,650.00
Notes Payable ₱ 200,000.00 ₱ 345,000.00
D Lina, Capital ₱ 641,976.00 -
728,352
Mina, Capital -
Total ₱ 1,020,916.00 ₱ 1,317,002.00
Lina and Mina agreed to form a partnership by contributing their respective assets and equities subject to t
following adjustments:
1. Accounts receivable of ₱20,000 in Lina’s books and ₱35,000 in Mina’s books were uncollectible.
2. Inventories of ₱5,500 and ₱6,700 were worthless in Lina’s and Mina’s respective books.
3. Other assets of ₱2,000 and ₱3,600 in Lina’s and Mina’s respective books were to be written off.
The capital account of partners Lina and Mina, respectively, after adjustments should be
A. ₱615,942 and ₱717,894
B. ₱640,876 and ₱712,345
C. ₱640,876 and ₱683,050
D. ₱614,476 and ₱683,052

9. Assume the same information in Item 8. How much total assets should the partnership have after forma
A. ₱2,337,918
C B. ₱2,237,918
C. ₱2,265,118
D. ₱2,365,218

10.On October 1, Jerwin and Jay pooled their resources to form a partnership with the business taking over
and assuming related liabilities. The capital of the partners would be based on net assets transferred after c
adjustments. Before adjustments, assets of Jerwin and Jay amounted to ₱75,000 and ₱113,000, respectivel
Furthermore, their liabilities were ₱5,000 and ₱34,500, respectively. Profits and losses would be allocated
Jay’s inventory had to be increased by ₱4,000. Accounts doubtful of collection amounting to ₱1,000 and ₱
D to be recognized by Jerwin and Jay, respectively. Moreover, accounts payable of ₱4,000 had to be recogni
books of Jerwin. What are the capital balances of Jerwin and Jay, respectively, after the related adjustment
A.₱68,750 and ₱77,250
B.₱75,000 and ₱81,000
C.₱65,000 and ₱76,000
D.₱65,000 and ₱81,000
 Solutions:
equipment which cost ₱16,000 Number # 1
d the partnership investments of Cash ₱ 48,000.00
the amounts of Office Equipment ₱ 13,000.00
Ann, Capital
Chok, Capital

Ann
Cash ₱ 20,000.00
Office Equipment
Capital - credit ₱ 20,000.00

land valued at ₱180,000 and a Number # 2

ssumed the mortgage on Audrey's Audrey
tal balances of Audrey and Shon, Land ₱ 180,000.00
Building ₱ 265,000.00
Cash
Mortgage -₱ 130,000.00
Capital ₱ 315,000.00

The partnership would use the Number # 3

t was purchased for ₱45,000. The Equipment
In the financial records of the Accumulated Depreciaton
pectively at Carrying Amount
Agreed Value
Increase in Value

Cost
Accumulated Depreciation, adjusted
Carrying Value

d losses in the ratio of 2:3, Number # 4

be sold for P50,000. Inan Land- Fair Market Value
mation?

Number # 5
Marie
₱ 700,000 Cash
 750,000 Machinery and Equipment
2,250,000 Building
Furniture and Fixtures
he partnership. Agreement Mortgage
y. The balance of Marie’s capital Capital

med by the partnership. The Number # 6

Cash
Machinery and Equipment
Building
Furniture and Fixtures
Mortgage
Capital

s on this date showed the Number # 7

Renz Cash
₱37,500 Accounts Receivable
225,000 Allowance for Doubtful Accounts
202,500 Merchandise Inventory
270,000 Machinery and Equipment
₱735,000 Underdepreciated
₱240,000 Accounts Payable
Capital
495,000
₱735,000 Renz, Capital
ed by ₱15,000 and Divide by: Equivalent Ratio
ounting to ₱120,000 Total Partnership Capital
d loss ratio and Multiply by: April's Interest'
est to bring the April, Capital - should be
April, Net Assets
Additional Cash - April

Number # 8
 Unadjusted Lina, Capital ₱ 641,976.00
Less: Allowance for Doubtful Accounts -₱ 20,000.00
Inventories -₱ 5,500.00
Other Assets -₱ 2,000.00
Adjusted Lina, Capital ₱ 616,476.00

Unadjusted Mina, Capital ₱ 728,352.00

Less: Allowance for Doubtful Accounts -₱ 35,000.00
Inventories -₱ 6,700.00
Other Assets -₱ 3,600.00
Adjusted Mina, Capital ₱ 683,052.00

nd equities subject to the

re uncollectible.
books.
be written off.
d be

rship have after formation? Number # 9

Lina, Total Assets ₱ 993,416.00
Mina, Total Assets ₱ 1,271,702.00
Total Assets ₱ 2,265,118.00

he business taking over the assets Number # 10

ssets transferred after considering
₱113,000, respectively. Assets
ses would be allocated equally. Liabilities
unting to ₱1,000 and ₱1,500 had Capital
,000 had to be recognized in the Inventory
the related adjustments? Allowance for Doubtful Accounts
Accounts Payable
Capital, adjusted
₱ 20,000.00
₱ 41,000.00

Chok
₱ 28,000.00
₱ 13,000.00
₱ 41,000.00

Shon

₱ 195,000.00

₱ 195,000.00

₱ 45,000.00
-₱ 23,000.00
₱ 22,000.00
-₱ 27,000.00
-₱ 5,000.00

₱ 45,000.00
-₱ 18,000.00 (23,000-5,000)
₱ 27,000.00

₱ 50,000.00

Manny Marie
₱ 300,000.00 ₱ 700,000.00
₱ 250,000.00 ₱ 750,000.00
₱ 2,250,000.00
₱ 100,000.00
-₱ 800,000.00
₱ 650,000.00 ₱ 2,900,000.00

Marie
₱ 700,000.00
₱ 750,000.00
₱ 2,250,000.00

₱ 3,700,000.00

April Renz
₱ 15,000.00 ₱ 37,500.00
₱ 540,000.00 ₱ 225,000.00
-₱ 120,000.00 -₱ 45,000.00
- ₱ 202,500.00
₱ 150,000.00 ₱ 270,000.00
-₱ 15,000.00 -₱ 45,000.00
-₱ 135,000.00 -₱ 240,000.00
₱ 435,000.00 ₱ 405,000.00

₱ 405,000.00
40%
₱ 1,012,500.00
60%
₱ 607,500.00
-₱ 435,000.00
₱ 172,500.00
 Jerwin Jay
₱ 75,000.00 ₱ 113,000.00
-₱ 5,000.00 -₱ 34,500.00
₱ 70,000.00 ₱ 78,500.00
₱ 4,000.00
-₱ 1,000.00 -₱ 1,500.00
-₱ 4,000.00
₱ 65,000.00 ₱ 81,000.00