QUIZZIZ EVALU8 (3rd year) - WEEK 1

The partnership agreement is an express contract among the partners (the owners of the business). Such an agreement generally does not include...

• Limitation on a partner's liability to creditors

• The rights and duties of the parties

• The allocation of income between the partners

• The rights and duties of the partners in the event of partnership dissolution

A partnership records a partner's investment of assets in the business at...

• The market value of the assets invested

• A special value set by the partners

• The partner's book value of the assets invested

• Any of the choices, depending on the partnership agreement

When the 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 at the date of the of recognition.

• Contributing partner's original cost

• Assessed valuation for property tax purposes

• Contributing partner's tax basis

The image shows the partnership's condensed balance sheet:

Situation: ZZ purchases a 1/4 interest in the firm. One-fourth of each partner's capital is to be transferred to the new partner. ZZ pays the partners P15,000 which is divided between them in the proportions to the equities given up. The capital balances of XX, YY, and ZZ after the admission should be:

• XX: P30,000

  YY: P15,000

  ZZ: P18,750

• XX: P25,000

  YY: P25,000

  ZZ: P25,000

• XX: P30,000

  YY: P15,000

  ZZ: P15,000

• XX: P20,000

  YY: P20,000

  ZZ: P20,000

The image shows the partnership's condensed balance sheet. Situation: ZZ invests P20,000 in cash for 1/4 ownership interest. The money goes to original partners. The capital balances of XX, YY, and ZZ after the admission should be:

• XX: P30,000

  YY: P15,000

  ZZ: P18,750

• XX: P25,000

  YY: P25,000

  ZZ: P25,000

• XX: P30,000

  YY: P15,000

  ZZ: P15,000

• XX: P20,000

  YY: P20,000

  ZZ: P20,000

The image shows the partnership's condensed balance sheet. Situation: ZZ invests P20,000 in cash for 1/4 ownership interest. The money goes to original partners. The partnership gain (gain to be recognized in partnership books) is:

• 0

• P1,250

• P5,000

• P20,000

The image shows the partnership's condensed balance sheet. Situation: ZZ invests P20,000 in cash for 1/4 ownership interest. The money goes to original partners. The gain to be recognized by XX and YY is:

• 0

• P1,250

• P5,000

• P20,000

Silverio, Domingo, Reyes and Pasko are partners sharing earnings in the ratio of 3/21; 4/21; 6/21 and 8/21. The balances of their capital account on December 31, 2019 are as follows:

The partners decide to liquidate, they accordingly convert the noncash assets in P23,200 of cash. After paying the liabilities to P3,000, they have P22,200 to divide. Assume that a debit balance of any partner's capital is uncollectible. The book value of the non-cash asset amounted to:

• P25,000

• P45,400

• P61,000

• P63,000

Silverio, Domingo, Reyes and Pasko are partners sharing earnings in the ratio of 3/21; 4/21; 6/21 and 8/21. The balances of their capital account on December 31, 2019 are as follows:

The partners decide to liquidate, they accordingly convert the noncash assets in P23,200 of cash. After paying the liabilities to P3,000, they have P22,200 to divide. Assume that a debit balance of any partner's capital is uncollectible. The share of Silverio in the loss upon conversion of the non-cash asset into cash was:

• P4,972

• P5,257

• P5,400

• None

Silverio, Domingo, Reyes and Pasko are partners sharing earnings in the ratio of 3/21; 4/21; 6/21 and 8/21. The balances of their capital account on December 31, 2019 are as follows:

The partners decide to liquidate, they accordingly convert the noncash assets in P23,200 of cash. After paying the liabilities to P3,000, they have P22,200 to divide. Assume that a debit balance of any partner's capital is uncollectible. After the P22,200 was divided, the capital balance of Domingo was:

• P3,200

• P3,920

• P4,400

• P17,800