AFAR

A, B and C decided to form ABC Partnership. It was agreed that A will contribute an equipment with assessed value of P100,000 with historical cost of P800,000 and accumulated depreciation of P600,000. A day after the partnership formation, the equipment was sold for P 300,000.

B will contribute a land and building with carrying amount of P1,200,000 and fair value of P1,500,000. The land and building are subject to a mortgage payable amounting to P300,000 to be assumed by the partnership. The partners agreed that B will have 60% capital interest in the partnership. The partners also agreed that C will contribute sufficient cash to the partnership.

What is the total agreed capitalization of the ABC Partnership?

• 1,500,000

• 2,000,000

• 2,500,000

• 3,000,000

A, B and C decided to form ABC Partnership. It was agreed that A will contribute an equipment with assessed value of P100,000 with historical cost of P800,000 and accumulated depreciation of P600,000. A day after the partnership formation, the equipment was sold for P 300,000.

B will contribute a land and building with carrying amount of P1,200,000 and fair value of P1,500,000. The land and building are subject to a mortgage payable amounting to P300,000 to be assumed by the partnership. The partners agreed that B will have 60% capital interest in the partnership. The partners also agreed that C will contribute sufficient cash to the partnership.

What is the cash to be contributed by C in the ABC Partnership?

• 500,000

• 600,000

• 700,000

• 800,000

On January 1, 2018, A, B and C formed ABC Partnership with total agreed capitalization of P1,000,000. The capital interest ratio of the ABC Partnership is 5:1:4 while the profit or loss ratio is 3:2:5, respectively for A, B and C.

During 2018, A and B made additional investments of P200,000 and P500,000, respectively. At the end of 2018, B and C made drawings of P300,000 and P100,000, respectively. On December 31, 2018, the capital balance of B is reported at P200,000.

• 500,000 loss

• 1,000,000 loss

• 800,000 income

• 1,200,000 income

On January 1, 2018, A, B and C formed ABC Partnership with total agreed capitalization of P1,000,000. The capital interest ratio of the ABC Partnership is 5:1:4 while the profit or loss ratio is 3:2:5, respectively for A, B and C.

During 2018, A and B made additional investments of P200,000 and P500,000, respectively. At the end of 2018, B and C made drawings of P300,000 and P100,000, respectively. On December 31, 2018, the capital balance of B is reported at P200,000.

What is the capital balance of C on December 31, 2018?

• 200,000

• 250,000

• 150,000

• 50,000

On December 31, 2018, ABC Partnership’s Statement of Financial Positions shows that A, B and C have capital balances of P500,000, P300,000 and P200,000 with profit or loss ratio of 1:3:6. On January 1, 2019, C retired from the partnership and received P350,000. At the time of C’s retirement, an asset of the partnership is undervalued.

What is the capital balance of A after the retirement of C?

• 462,500

• 537,500

• 562,500

• 525,000

On December 31, 2018, ABC Partnership’s Statement of Financial Position shows that A, B and C have capital balances of P400,000, P300,000 and P100,000 with profit or loss ratio of 1:4:5. On January 1, 2019, C retired from the partnership and received P80,000. At the time of C’s retirement, the assets and liabilities of the partnership are properly valued.

What is the capital balance of B after the retirement of C?

• 284,000

• 308,000

• 316,000

• 320,000

• 250,000

• 150,000

• 290,000

• 270,000

Entity A acquired 80,000 out of 100,000 outstanding ordinary shares of Entity B which enabled the former to obtain control of the latter at an acquisition price of P1,000,000. Entity A paid P100,000 acquisition related costs and P50,000 indirect costs of business combination.

At the date of acquisition, the net assets of Entity B are reported at P1,600,000. An asset of Entity B is overvalued by P60,000 while one liability is undervalued by P40,000.

What is the initial measurement of noncontrolling interest in net assets in the consolidated statement of financial position?

• 320,000

• 300,000

• 250,000

• 316,000

On December 31, 2018, the Department of Finance billed its lessee on one of its buildings in the amount of P10,000. On January 31, 2019, the Department of Finance collected all of the accounts receivable. On February 28, 2019, the Department of Finance remitted the entire collected amount to the Bureau of Treasury. What is the journal entry to record the remittance by the Department of Finance to the Bureau of Treasury?

• Debit – Accounts Receivable P10,000 and Credit – Rent Income P10,000

• Debit – Accounts Receivable P10,000 and Credit – Retained Earnings P10,000

• Debit – Cash Collecting Officers P10,000 and Credit – Accounts Receivable P10,000

• Debit – Cash – Treasury/Agency Deposit, Regular – P10,000 and Credit Cash – Collecting Officer – P10,000

Department of Health (DOH) received Notice of Cash Allocation in the amount of P100,000 from Department of Budget and Management. DOH made a total cash disbursements in the amount of P95,000. What is the journal entry to recognize reversion of unused Notice of Cash Allocation by DOH in its books?

• Debit Subsidy Income from National Government P5,000 and credit Cash-MDS, Regular P5,000.

• Debit Retained Earnings of DFA P5,000 and credit Cash-MDS, Regular P5,000.

• Debit Expenses of DFA P5,000 and credit Cash-MDS, Regular P5,000.

• Debit Investment of DFA P5,000 and credit Cash-MDS, Regular P5,000.