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POWER has a beginning inventory of ₱340,000. During the period POWER purchased inventories costing ₱990,000. Freight paid on the purchase totaled ₱40,000. The ending inventory was ₱360,000. If the net sales were ₱1,200,000, how much is the gross profit?

What is the total capital of the partnership after the admission of NN?

• P 590,000.00

• P 420,000.00

• P 510,000.00

• P 410,000.00

What is the total capital of the partnership after the admission of NN?

• P 590,000.00

• P 420,000.00

• P 450,000.00

• P 410,000.00

Statement I: Under the periodic inventory system, increases and decreases in inventory are recorded through the purchases, freight-in, purchase returns, and purchase discounts accounts. Statement II: Under the perpetual inventory system, cost of goods sold is debited when inventory is sold and credited when there is a sales return.

• Only Statement I is true.

• Only Statement II is true.

• Both Statements are true.

• Both Statements are false.

Statement I: If there is no agreed value on noncash assets contributed by the partners, these should be recorded in partnership books at their fair market values in the absence of agreed values. Statement II: When industry is contributed into the partnership, a memorandum entry is prepared.

• Only Statement I is true.

• Only Statement II is true.

• Both Statements are true.

• Both Statements are false.

When property other than cash is invested in a partnership, at what amount should the noncash property be credited to the contributing partner's capital account?

• Fair value by the time of purchase

• Contributing partner's original cost

• Assessed valuation for property tax purposes

• Fair value at the date of contribution

Which of the following statements is correct with respect to a limited partnership?

• A limited partner may not be an unsecured creditor of the limited partnership.

• A general partner may not also be limited partner at the same time.

• A general partner may be a secured creditor of the limited partnership.

• A limited partnership can be formed with limited liability for all partners.

Statement I: One advantage of a partnership over a corporate form of organization is the unlimited liability of partners. Statement II: A proprietorship has a limited life whereas a partnership may have an unlimited life.

• Only Statement I is true.

• Only Statement II is true.

• Both Statements are true.

• Both Statements are false.

Statement I: Partners' drawing accounts have normal credit balances. Statement II: The partner's capital account is debited for additional investments and credited for his share in profit.

• Only Statement I is true.

• Only Statement II is true.

• Both Statements are true.

• Both Statements are false.

Which of the following is not a component of the formula used to distribute income?

• Salary allocation to those partners working.

• After all other allocation, the remainder divided according to the profit and loss sharing ratio.

• Interest on the average capital investments.

• Interest on notes to partners.