Partnership Accounting, Quizzes of Accounting

Download Partnership Accounting and more Quizzes Accounting in PDF only on Docsity! UNIVERSITY OF NORTHERN PHILIPPINES ▪ COLLEGE OF BUSINESS ADMINISTRATION AND ACCOUNTANCY NAME: Date: Year and Section: PARTNERSHIP AND CORPORATION ACCOUNTING QUIZ 4: Partnership Dissolution Problem 1 On December 31,2022, the Balance Sheet of ABC Partnership provided the following data with profit or loss ratio of 1:6:3 Current Assets P1,000,000 Total Liabilities P600,000 Noncurrent Assets 2,000,000 A, Capital 900,000 B, Capital 800,000 C, Capital 700,000 On January 1,2023, D is admitted to the partnership by purchasing 40% of the capital interest of the partnership at a price of P500,000. a. What is the capital balance of D after his admission on January 1,2023? P960,000 b. Assuming there is an implied asset revaluation upward or downward, what is the capital balance of each partner after admission of D on January 1,2023? Problem 2 On December 31,2022, the Balance Sheet of ABC Partnership provided the following data with profit or loss ratio of 5:2:3 Current Assets P1,300,000 Total Liabilities P300,000 Noncurrent Assets 2,000,000 A, Capital 1,400,000 B, Capital 700,000 C, Capital 900,000 On January 1,2023, D is admitted to the partnership by investing P1,000,000 to the partnership for 40% capital interest. a. If all the assets of the existing partnership are properly valued, determine the agreed capital of each of the partner in the new partnership. b. If there is an implied asset revaluation upward (surplus) / downward (impairment), determine the agreed capital of each partner in the new partnership. P650,000; P400,000; P450,000; P1,000,000 Problem 3 On December 31,2022, the Balance Sheet of ABC Partnership provided the following data with profit or loss ratio of 5:1:4 Current Assets P1,000,000 Total Liabilities P600,000 Noncurrent Assets 2,000,000 A, Capital 900,000 B, Capital 800,000 C, Capital 700,000 On January 1,2023, D is admitted to the partnership by investing P500,000 to the partnership for 20% capital interest. The total agreed capitalization of the new partnership is P2,800,000. Determine the capital balance of each partner after admission of D to the partnership. P820,000; P784,000; P636,000; P560,000 Problem 4 On December 31, 2022, ABC Partnership's Statement of Financial Positions shows that A, B and C have capital balances of P400,000, P350,000 and P250,000 with profit or loss ratio of 4:3:3. On January 1, 2023, B retired from the partnership and received P280,000. a. What is the capital balance of the remaining partners after the retirement of B? b. If there is an implied asset revaluation upward/downward, what is the capital balance of C after the retirement of B? P180,000 Problem 5 On November 30, 2022, the statement of financial position of ABC partnership has the following balances: Total assets P900,000; A, loan P50,000; A, capital P207,500; B, capital 192,500; C, capital P450,000. The partners share profit and losses 25:25:50 respectively. It was agreed that Partner A will retire from the partnership and will be paid P217,000. However, the following were certain transactions that needed to be accounted for before Partner A's retirement: 1  Partnership assets have a fair value of P1,020,000  Partnership has an income summary debit balance in the amount of P300,000 at the end of the year, which has not yet distributed among the partners a. Journalize all the necessary entries. b. Determine the capital balances of the remaining partners after retirement of A. B=146,000; C=357,000 Problem 6 On January 1, 2023, the partners of ABC Partnership decide to admit other investors. As a result, the partnership shall be converted to a corporation. The following information was determined: Carrying amounts Fair values Cash 20,000 20,000 Receivables 60,000 40,000 Inventory 80,000 70,000 Equipment 540,000 706,000 Payables 50,000 50,000 A, Capital 150,000 B, Capital 200,000 C, Capital 300,000 Compute for the total number of shares issued by the corporation if the par value per share is P15. 52,400 Problem 7 The capital accounts of A and B have balances of P1,750,000 and P2,424,000, respectively. They divide profits and losses in the ratio 4:6, respectively. C is to be admitted to the partnership by purchasing ¼ of the interest of A and B for P925,000. Compute the cash received by B as a result of the interest sold to C. P534,900 Problem 8 The capital accounts of AB Partnership on December 31,2021 were: A (60% profit percentage) P140,000 B (40% profit percentage) 60,000 On January 1, 2022, C was admitted to a 30% interest in the partnership when he purchased 30% of each existing partner’s capital for P50,000 paid directly to A and B. On February 28,2022, D was admitted as a partner by investing P80,000 for a 25% interest in the partnership. Compute for the total partnership capital after admission of C & D. P280,000 Problem 8 A and B who share profits and losses in the ratio 4:6, are partners with capital balances of: A P450,000 B 374,600 C is to be admitted into the partnership for 24% interest in the capital of the firm. If assets are revalued and the capital balances of A and B after recording the admission of C are P576,160 and P563,840, respectively. Compute for the capital contribution of C. P360,000 Problem 9 A, B and C were partners with capital balances on January 2,2021 of P100,000; P180,000 and P200,000, respectively. Their profit and loss ratio is 5:3:2. On July 1,2021, A retired from the partnership. On the date of retirement, the partnership net income is P140,000 and the partners agreed that inventories are to be revalued at P80,000 from its original cost of P50,000. The partners agreed further to pay A P208,000 in settlement of his interest. What is the capital balance of C after the retirement of A? P224,800 Problem 10 The balance sheet of AB Partnership at December 31,2021 reported the following: Total Assets P1,450,000 Total Liabilities 320,000 2