The partnership of NAWAAKOYPAGPALAIN is liquidating and the ledger shows the following:

Cash P 80,000
Inventories 100,000
Accounts payable 60,000
NAWA, capital (50%) 40,000
AKO, capital (25%) 45,000
PAPALAIN, capital (25%) 35,000
1. If all cash available is distributed immediately:
a. Each partner gets P26,667 c. NAWA P10,000, AKO and PAPALAIN, P5,000 each
b. Each partner gets P6,667 d. AKO gets P15,000 and PAPALAIN gets P5,000

The balance sheet for EASY, TOO, and PASS Partnership, who share profits and losses in the ratio of
50%, 25%, and 25%, respectively, shows the following balances just before liquidation.
Cash P 24,000
Other assets 119,000
Liabilities 40,000
EASY, capital 44,000
TOO, capital 31,000
PASS, capital 28,000
On the first month of liquidation, certain assets are sold for P64,000. Liquidation expenses of P2,000 are
paid, and additional liquidation expenses are anticipated. Liabilities are paid amounting to P10,800 and
sufficient cash is retained to insure the payment to creditors before making payments to partners. On the
first payment to partners, EASY receives P12,500.
2. Determine the amount of cash withheld for anticipated liquidation expenses.
a. P35,200 b. P33,200 c.P29,200 d. P 6,000

The Statement of Realization and Liquidation for NOMONEY Corporation. The totals are as follows:
Assets to be realized P60,000 Liabilities assumed P50,000
Assets acquired 40,000 Liabilities not liquidated 65,000
Assets realized 55,000 Supplementary credits 110,000
Liabilities to be liquidated 80,000
Retained earnings decreased by P12,000. The ending balances of ordinary shares and retained earnings
are P100,000 and P(75,000), respectively.
3. The beginning balance of cash is
a. P57.000 b. P75,000 c. P65,000 d. P56,000

On June 1, S and T pooled their assets to form a partnership, with the firm to take over their business
assets and assume the liabilities. Partners’ capitals are to be based on net assets transferred after the
following adjustments:
 Tyler’s inventory is to be increased by P3,000.
 An allowance for doubtful accounts of P1,000 and P1,500 are to be set up on the books of S
and T, respectively.
 Accts. payable of P4,000 is to be recognized on the books of S.
The individual trial balances on June 1, before adjustments follow:
S, Capital T, Capital
Assets 75,000 113,000
Liabilities 5,000 34,500
Capital 70,000 78,500
4. What is the capital balance of T after adjustments?
a. P85,500 P81,500 c. P80,000 d. P77,000

On March 1, 2014, Candace and Noreen formed a partnership with each contributing the following
assets:
Candice Noreen
Cash 60,000 140,000
Office Equipment 50,000 150,000
Building - 450,000
 Furnitures & Fixtures 20,000 -
The building is subject to a mortgage loan of P180,000, which is to be assumed by the partnership.
The partnership agreement provides that Candace and Noreen share profits and losses at 30% and
70% respectively. Assuming that the partners agreed to bring their respective capital in proportion to
their P & L ratios, and using Noreen capital as the base.
5. Compute (1) the capital account balance of Noreen on March 1, 2014 and (2) additional cash to
be invested by Candace.
a. (1) P560,000; (2) P430,000 c. (1) P614,000; (2) P430,000
b. (1) P560,000; (2) P110,000 d. (1) P614,000; (2) P110,000

Debbie, a senior partner in a law firm, has a 30% participation in the firm’s profit and losses. During
2014, Debbie withdrew P130,000 against her capital but contributed property with a fair value of
P25,000. Debbie’s capital increased by P15,000 during 2014.
6. The net income of the partnership for 2014 is
a. P150,000 P400,000 c. P350,000 d. P550,000
Selected accounts of Ami, Susi and Tessi prior to liquidation of their partnership show:
Loans receivable from Ami P 300,000 debit
Loans payable to Susi 600,000 credit
Ami, Capital 900,000 debit
Susi, Capital 1,800,000 credit
Tessi, Capital 1,500,000 credit
The partners share profits and losses at 20:40:40 respectively.
7. In the payment priority program, the beginning capital balances are:
a.Ami: P 0 Susi: P2,400,000 Tessi: P1,500,000
b.Ami: ( 450,000) Susi: 450,000 Tessi: 375,000
c. Ami: ( 600,000) Susi: 600,000 Tessi: 375,000
d.Ami: (1,200,000) Susi: 2,400,000 Tessi: 1,500,000

The following balance sheet for the partnership of A, B, and C was taken from the books on December
31, 2014.
Assets Liabilities and Capital
Cash P 40,000 Liabilities P 100,000
Other Assets 360,000 A, Capital (40%) 74,000
B, Capital (40%) 130,000
C, Capital (20%) 96,000
Total Assets P 400,000 Total Liab.& Cap. P 400,000
8. If the firm is dissolved and liquidates by installment, the first sale of the other assets having book
value of P180,000 realized P80,000 and all cash available are distributed, the amount to be received
by A, B, and C respectively would be
A B C
a. P 0 P18,000 P40,000
b. P 0 P80,000 P20,000
c. P20,000 P 0 P 0
d. P 0 P 0 P20,000

9. If the firm is dissolved and liquidates on the basis of a payment priority program and A receives a total
of P3,000 in full settlement of his interest, then C would have received a total of
a.P56,000 b. P 60,500 c. P 31,000 d. P 59,000

DANA is admitted into the firm of LEAH, TAHLA and CASS. The latter agreed to sell to Sabrina one-
fourth of their respective equities and profit shares. Sabrina paid a total price of P1,000,000. Before
DANA’s admission, LEAH, TAHLA and CASS have capital balances of P2,000,000, P1,000,000 and
P500,000 and they share profits at the ratio of 6:3:1. Partnership assets are fairly stated and implied
goodwill is not to be recognized prior to DANA’s admission.
10. The new capital of the partnership is
a. P 3,500,000 c. P 5,000,000
b. P4,000,000 d. P 4,500,000
RC and SM, partners in a firm, share profits equally and each has a capital balance of P900,000.
Superman is admitted as a new partner by a cash investment of P1,200,000 for a one-third interest in
both the firm’s assets and profits. Superman will be credited in full for amount invested. The firm’s assets
are fairly stated.
11. The firm’s new capital should be
a. P3,000,000 b. P3,600,000 c. P2,400,000 d. P4,200,000

Ever, Green and Field share partnership profits in the ratio of 2:3:5. On September 30, Field opted to
retire from the partnership. The capital balances on this date follow: Ever- P25,000; Green- P40,000;
Field- P35,000.
12. How much is to be credited to Green assuming Field is paid P32,000 in full and final settlement of his
partnership interest?
a. P1,800 b. P 857 c. P 600 d. P1,200

The balance sheet of the partnership L, M, and N at April 30, 2014 follows: The partners share profits and
losses in the ratio of 2:2:6 respectively.
Assets Liabilities & Capital
Other assets P100,000 L, Loan P 9,000
L, Capital 15,000
M, Capital 31,000
N, Capital 45,000
P100,000 P100,000
L is retiring from the partnership. By mutual agreement, the assets are to be adjusted to their fair value of
P130,000. M and N agree that the partnership will pay L P37,000 cash for his partnership interest,
exclusive of his loan which is to be paid in full separately.
13. If no goodwill is to be recorded, what is the balance of N’s capital account after L’s retirement?
a. P51,000 b. P50,000 c. P 53,400 d. P 63,000

The capital accounts of Van, Hou, and Ten are presented below with their respective profit and loss
ratios.
Van Capital (50.00%) P 139,000
Hou, capital (33.33%) 209,000
Ten, capital (16.67%) 96,000
100.00% P444,000
Choko was admitted to the partnership when he purchased directly for P132,000 a proportionate interest
from Van and Hou in the net assets and profits of the partnership. As a result, Choko acquired a one-fifth
interest in the net assets and profits of the firm. No revaluation of assets is to be recorded.
14. What is the combined gain realized by Van and Hou upon the sale of a portion of their interests in the
partnership to Choko?
a. P0 b. P43,200 c. P62,400 d. P82,000

M. Jordan, a partner in the partnership has a 30% share in the partnership profit and loss. His capital
account had a net decrease of P60,000 in 2018. In 2018, he withdrew P130,000 against his capital and
invested properties valued at P25,000 in the partnership.
15. The net income of the partnership in 2018 is:
a. P150,000 b. P233,333 c. P350,000 d. P550,000

On May 1, 2018, the business assets of John and Paul appear below:
John Paul
Cash 11,000 22,354
Accounts receivable 234,536 567,890
Inventories 120,035 260,102
Land 603,000
Building 428,267
Furnitures & Fixtures 50,345 34,789
 Other assets 2,000 3,600
1,020,916 1,317,002
Accounts Payable 378,940 588,650

John and Paul agreed to form a partnership contributing their respective assets and equities subject to
the following adjustments:
a. Accounts receivable of P20,000 in John’s books and P35,000 in Paul’s are uncollectible.
b. Inventories of P5,500 and P6,700 are worthless in John’s and Paul’s respective books.
c. Other assets of P2,000 & P3,600 in John’s & Paul’s respective books are to be written off.
16. The capital accounts of the partners after the adjustments will be:
a. John’s 614,476 b. John’s 615,942
Paul’s 683,052 Paul’s 717,894
c. John’s 640,000
Paul’s 712,345

17. How much assets does the partnership have:

JOJO, a senior partner in an engineering firm, has profit share of 30%. During 2018, JOJO withdrew
P130,000 against his capital but invested property with a fair market value of P25,000.
18. If JOJO’s ending capital is P60,000 lesser than his beginning capital, the profit of the partnership for
the year is
a. P150,000 b. P175,000 c. P210,000 d. P240,000

LUIS, KRIZMA and CALL-INNS share partnership profits in the ratio of 2:3:5. On September 30, CALL-
INNS opted to retire from the partnership. The capital balances are: LUIS, P25,000; KRIZMA, P40,000;
and CALL-INNS, P35,000.
19. How much is to be debited to LUIS, assuming CALL-INNS is paid P39,000 in full settlement of his
partnership interest?
a. P2,400 b. P3,000 c. P4,000 d. P1,600