1.

When Kobe is admitted to the partnership, the fair value of the assets he contributes exceeds his
initial capital balance. In this case who gets the bonus under the bonus method and who contributes the
goodwill under the goodwill method?

 Kobe gets the bonus and contributes the goodwill.

 Kobe gets the bonus, but the goodwill is contributed by old partners.
 The old partners get the bonus and contribute the goodwill.
 The old partners get the bonus, but the goodwill is contributed by Kobe.

2. A partnership in liquidation has converted all assets into cash and paid all liabilities. According to the
Uniform Partnership Act, the order of payment

 Will be by any manner that is both reasonable and rational for the partnership.
 Will have amounts due to partners with respect to their capital accounts take precedence over
amounts owed by partners other than for capital and profits.
 Will be according to the partners’ residual profit and loss sharing ratios.
 Will have amounts owed by partners other than for capital and profits take precedence over
amounts due to partners with respect to their capital accounts.

3. R. Costelo, a partner in BRC Partnership, assigns its partnership interest to R. Serapion , who is not
made a partner . After the assignment, R. Serapion asserts the right to

I R. Costelo’s partnership profits

II Participate in the management of BRC

R. Serapion is correct as to which of these rights?

 Neither I nor II
 I only
 I and II
 II only

4. The partnership of Joe, Al, and Mike shares profits and losses 60%, 30%, and 10%, respectively. On
January 1, 2011, the partners voted to dissolve the partnership, at which time the assets, liabilities, and
capital balances were as follows:

Assets Liabilities and Capital

Cash $ 400,000 Accounts Payable $ 580,000

Other Assets 1,200,000 Joe, Capital 440,000

Al, Capital 380,000

Mike, Capital 200,000

Total assets $1,600,000 Total liabilities $1,600,000

All of the partners are personally insolvent. Assume that all noncash assets are sold for $840,000 and all
available cash is distributed in final liquidation of the partnership. Cash should be distributed to the
partners as follows

 Joe, $440,000; Al, $380,000; Mike, $200,000.

 Joe, $744,000; Al, $372,000; Mike, $124,000.
 Joe, $396,000; Al, $198,000; Mike, $66,000.
 Joe, $224,000; Al, $272,000; Mike, $164,000.

5. A, B and C formed a Partnership on January 2, 2018 with the following contributions

A 100, 000

B 200, 000

C 300, 000

The partners agreed on a capital ratio of 1:2:3 upon formation and P&L ratio of 3:3:4, respectively. The
partnership reported a net loss of 20, 000 for 2018. Also, at the end of 2016 C has decided to withdraw
from the firm and was paid 250, 000 from the partnership cash.

On April 1, 2019, D was admitted as a partner with an investment of 160, 000. He is given a share in
capital of 40% and in profits, 30% the old partners have agreed to retain their old ratio over the
remaining profit and loss share of 70%. The partnership reported a net profit of 21, 000 for 2017, one-
third of which is deemed earned as of the end of the year's first quarter's operation.

Determine the capital balance of A, B and D, respectively on December 31, 2019.

 104, 075.5; 204, 087.5; and 202, 825

 98, 540; 75, 720; and 113, 840
 93, 640; 70, 820; and 109, 640
 100, 990.5; 78, 170.5 and 120, 140

6. When a partner retires and receives cash less than his capital balance, how should the difference be
treated?

 Credited to the remaining partners in their profit and loss ratio.

 Debited to the remaining partners in their profit and loss ratio.
 Credited to all the partners in their profit and loss ratio.
 Debited to all the partners in their profit and loss ratio.

7. Myrna and Norma are partners sharing profit and losses in the ratio of 60% and 40%, respectively. The
partnership balances sheet at August 30, 2019 follows:

Cash 27, 000 Accounts Payable 30, 000

 Other Assets 266, 000 Myrna, Loan 13, 000

Norma, Loan 20, 000 Myrna, Capital 180, 000

Norma, Capital 90, 000

Totals 313, 000 Totals 313, 000

At this date, Olga was admitted as a partner for a consideration of 97, 500 cash for a 40% interest in
capital and in profits. Assume that Olga is admitted by investment, determine the effects of any bonus
over the capital balances of the original partners.

 Myrna, 18, 800 and Norma 29, 700

 Myrna, (19, 800) and Norma (29, 700)
 Myrna, (29, 700) and Norma (19, 800)
 Myrna, (18, 675) and Norma (12, 450)

8. Which statement is correct in describing the rank order of payments as specified by the Uniform
Partnership Act?

 After Payments Are Made To Other Creditors And Partners With Loans To The Partnership,
Payment Can Be Made To Partners With Capital Interests.
 Payments To Partners With Loans To The Partnership Are Ranked Equally With Payments To
Other Creditors.
 Payments To Partners With Loans To The Partnership Are Ranked Ahead Of Payments To
Partners Without Loans To The Partnership.
 Payments To Other Creditors Are Ranked Ahead Of Payments To Partners With Loans To The
Partnership.

9. If Lany, a partner with a loan receivable from a liquidating partnership, receives a less cash than the
amount of the loan during the liquidation, the payment is recorded with a debit to

 Loan receivable to Lany

 Lany Drawing
 Lany Capital
 Loan payable to Lany

10. A, B and C formed a Partnership on January 2, 2018 with the following contributions

A 100, 000

B 200, 000

C 300, 000

The partners agreed on a capital ration of 1:2:3 upon formation and P&L ratio of 3:3:4, respectively. The
partnership reported a net loss of 20, 000 for 2018. Also, at the end of 2016 C has decided to withdraw
from the firm and was paid 250, 000 from the partnership cash.
On April 1, 2019, D was admitted as a partner with an investment of 160, 000. He is given a share in
capital of 40% and in profits, 30% the old partners have agreed to retain their old ratio over the
remaining profit and loss share of 70%. The partnership reported a net profit of 21, 000 for 2017, one-
third of which is deemed earned as of the end of the year's first quarter's operation.

Determine the capital balance of A and B, respectively on December 31, 2018.

 194, 000 and 115, 000

 115, 000 and 215, 000
 94,000 and 194, 000
 165, 000 and 215, 000

11. Adamle, Boyer, and Clay are partners with a profit and loss ratio of 4:3:2. The partnership was
liquidated and, prior to the liquidation process, the partnership balance sheet was as follows:

ADAMLE, BOYER, AND CLAY

Balance Sheet

January 1, 2011

Assets Liabilities and Equit

Cash $ 60,000 Adamle, Capital $216,000

Other assets 540,000 Boyer, Capital 240,000

Clay, Capital 144,000

Total Assets $600,000 Total Liabilities & Equities $600,000

After the partnership was liquidated and the cash was distributed, Clay received $96,000 in cash in full
settlement of his interest. The liquidation gain/loss must have been:

 $480,000
 $216,000
 $144,000
 $360,000

12. If a partnership is liquidated, how is the final allocation of business assets made to the partners?

 According to profit and loss ratio.

 According to final capital account balances.
 According to the initial investment made by each of the partners.
 Equally.
13. Partners Jojo and Mar, who share profits and losses equally, have decided to incorporate the
partnership at December 31, 2019. The partnership net assets after the following adjustments will be
contributed in exchange for shares of stocks from the corporation.

Provision of allowance for doubtful accounts, 6,000

Adjustment of understated inventory for 10, 000

Recognition of additional depreciation of 2, 000

The corporation's ordinary share is to have a par value of 200 each and the partners are to be issued
corresponding shares equivalent to 80% of their adjusted capital at December 31, 2019 which are
presented in balance sheet as follows :

Cash 60, 000 Liabilities 86, 000

A/R 50, 000 Acc. Dep. 4, 000

Inventory 70, 000 Jojo, Cap. 70, 000

Equipment 40, 000 Mar, Cap. 60, 000

The number of ordinary share issued to Partner Mar is

 600
 244
 660
 568

14. M. Diaz, L. Guevarra, and A. Miranda have capital balances of P90,000,P45,000, and P15,000
respectively, in the DGM Partnership. The general partnership agreement is silent as to the manner in
which partnership losses are to be allocated but does provide that partnership profits are to be
allocated as follows: 40% to M. Diaz, 25% to L. Guevarra, and 35% to A. Miranda. The partners have
decided to dissolve and liquidate the partnership. After paying all creditors, the amount available for
distribution will be P60,000. M. Diaz, L. Guevarra, and A. Miranda are individually solvent.

Using the preceding information, A. Miranda will

 receive P21,000
 personally have to contribute an additional P15,000
 receive P36,000
 personally have to contribute an additional P16,500

15. The interest of the withdrawing, retiring, or deceased partner shall be adjusted for which of the
following?

I. His share of any profit or loss up to the date of his withdrawal, retirement or death, if he withdraws,
retires or dies during the year

II. His share of any revaluation gains or losses as at the date of his withdrawal, retirement, or death
  I or II
 I and II
 II only
 I only

16. Gylin, Maria and Carla decide to liquidate their partnership on November 30, 2019. Their capital
balances and profit and loss ratio are as follows:

Gylin 800, 000 40%

Maria 960, 000 30%

Carla 320, 000 30%

The net income of from January 1, 2019 to November 30, 2019 is 704, 000. On November 30, 2019, the
cash balance is 640, 000, and that of liabilities is 1, 440, 000. Gylin is to receive a 883, 200 in the
settlement for her interest.

The amount to be realized from the sale of non-cash assets would be

 5,100, 000
 3, 860, 000
 5, 860, 000
 3, 088, 000

17. If a partner with a debit capital balance during liquidation is personally solvent, the

 partnership will loan the partner enough cash to absorb the debit balance.
 partner's debit balance will be allocated to the other partners.
 other partners will give the partner enough cash to absorb the debit balance.
 partner must invest additional assets in the partnership.

18. The following condensed balance sheet is prepared for Quiel and Roger, who share profits and losses
in the ration of 60:40, respectively:

Other Assets 324, 000 Accounts Payable 86, 400

Quiel, Loan 14, 400 Quiel, Capital 140, 400

Roger, Capital 111, 600

Totals 338, 400 338, 400

The partners have decided to liquidate the partnership. If the other assets are sold for 277, 200, what
amount of the available cash to be distributed to Quiel?

 156, 000
 97, 920
 108, 800
 124, 800
19. When J retired from J, B and C Partnership, the settlement of her interest exceeded her capital
balance. Under the bonus method, the excess:

 Was recorded as an expense.

 Had no effect.
 Reduced the capital balances of the remaining partners.
 Was recorded as goodwill.

20. The MORICATA Partnership ha the following capital balances and P&L at August 4, 2019.

Mora, Capital (30%) 129, 750

Rico, Capital (30%) 108, 750

Cara, Capital (20%) 80, 000

Tano, Capital (20%) 71, 500

Cara has decided to withdrew from the partnership and by agreement of all partners, will be paid 90,
000 from partnership cash. Immediately after Cara's retirement , the capital ratio of Mora, Rico and
Tano, respectively will be

 40%, 34% and 26%

 33-1/3%, 33-1/3%, and 33-1/3%
 37-1/2%, 37-1/2% and 25%
 42%, 35% and 23%