Prelims Exam - Advacc

On December 1, 2024, EE and FF formed a partnership, agreeing to share for profits and losses in the ratio of 2:3, respectively. EE invested a parcel of land that cost him P25,000. FF invested P30.000 cash. The land was sold for P50,000 on the sAME date, three hours after formation of the partnership. How much should be the capital balance of EE right after formation?

• P25,000

• P30,000

• P60,000

• P50,000

MM, NN, a n d OO are partners with capital balances on December 31, 2024 of P300,000, P300,000 and P200,000, respectively. Profits are shared equally. OO wishes to withdraw and it is agreed that OO is to take certain equipment with second-hand value of P50,000 and a note for the balance of OO's interest. The equipment are carried on the books at P65,000. Brand new equipment maycost P80,000. Compute for: (1) OO's acquisition of the second-hand equipment wil result to reduction in capital; (2) the value of the note that wil OO get from the partnership's liquidation.

• (1) P15,000 each for MM and NN, (2) P150,000

• (1) P5,000 each for MM, NN and OO, (2) P145,000

• 1) P5,000 each for MM, NNand OO, (2) P195,000

• (1) P7,500 each for MM and NN, (2) P145,000

JJ and KK are partners who share profits and losses in the ratio of 60%: 40%, respectively. JJ's salary is P60,000 and P30,000 for KK. The partners are also paid interest on their average capital balances. In 2024, JJ received P30,000 of interest and KK. P12,000. The profit and loss allocation is determined after deductions for the salary and interest payments. If KKs' share in the residual income (income after deducting salaries and interest) was P60,000 in 2024, what was the total partnership income?

• P192,000

• 345,000

• 282,000

• 387,000

Cab and Jo are considering forming a partnership whereby profits will be allocated through the use of salaries and bonuses. Bonuses will be 10% of net income after total salaries and bonuses. Cab wil receive a salary of P30,000 and a bonus. Jo has the option of receiving a salary of P40,000 and a 10% bonus or simply receiving a salary of P52,000. Both partners will receive the same amount of bonus.

Determine the level of net income that would be necessary so that Jo would be indifferent to the profit sharing option selected.

• P240,000

• 300,000

• 94,000

• 334,000

AA, BB, and CC are partners with average capital balances during 2024 of P360,000, P180,000, and P120,000, respectively. Partners receive 10% interest on their average capital balances. After deducting salaries of P90,000 to AA and P60,000 to CC the residual profit or loss si divided equally. In 2024 the partnership sustained a 99,000 loss before interest and salaries to partners. By what amount should AA's capital account change?

• P21,000 increase

• 33,000 decrease

• 105,000 decrease

• 126,000 increase

Partner A first contributed P50,000 of capital into an existing partnership on March 1, 2024. On June 1, 2024, the partner contributed another P20,000. On September 1, 2024, the partner withdrew P15,000 from the partnership, Withdrawals in excess of P10,000 are charged to the partner's capital account. The annual weighted-average capital balance is

• P62,000

• 51,667

• 60,000

• 48,333

PP contributed P24,000 and CC contributed P48,000 to form a partnership, and they agreed to share profits in the ratio of their original capital contributions. During the first year of operations, they made a profit of P16,290; PP withdrew P5,050 and CC P8,000. At the start of the following year, they agreed to admit GG into the partnership. He was to receive a one-fourth interest in the capital and profits upon payment of P30,000 to PP. and CC, whose capital accounts were to b e reduced by transfers to GG's capital account of amounts sufficient to bring them back to their original capital ratio.

How should the P30,000 paid by GG be divided between PP and CC:

• PP.P 9,825; CC, P20,175

• PP,P15,000; CC, P15,000

• PP, P10,000; CC, P20,000

• PP,P 9,300; CC, P20,700

OO and TT are partners with capital balances P60,000 and P20,000, respectively. Profits and losses are divided in the ratio of 60:40. OO and TT decided to form a new partnership with GG, who invested land valued at P15,000 for a 20% capital interest in the new partnership. GG's cost of the land was P12,000. The partnership elected to use the bonus method to record the admission of GG into the partnership. GG's capital account should be credited for?

• P12,000

• 15,000

• 16,000

• 19,000

RR and XX formed a partnership and agreed to divide initial capital equally, even though RR contributed P25,000 and XX contributed P21,000 in identifiable assets. Under the bonus approach to adjust the capital accounts. XX's unidentifiable assets should be debited for:

• P11,500

• 4,000

• 2,000

• 0

On June 30, 2024, the statement of financial position for the partnership of CC, MM, and PP, together with their respective profit and loss ratios, were as follows:

Assets, at cost — P180,000

CC, Loan — 9,000

CC, Capital (20%) — 42,000

MM, Capital (20%) — 39,000

PP, Capital — 90,000

CC decided to retire from the partnership. by mutual agreement, the assets are to be adjusted to their fair value of P216,000 at June 30, 2024. It was agreed that the partnership would pay CC P61,200 cash for CC's partnership interest, including CC's loan which si to be repaid ni ful. No goodwill is to be recorded. After CC's retirement, what is the balance of MM's capital account?

• P36,450

• 39,000

• 45,450

• 46,200