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WorksheetsPartnership and Corporation
Total questions: 37
Worksheet time: 36mins
During the liquidation process, the partnership will focus on terminal activities?
True
False
Right of offset is an established legal doctrine that a deficient partner can exercise to partly or fully apply his loan account to the partnership against his capital deficiency in the process of liquidation?
True
False
When non-cash assets are sold less than book value, the sale results to a gain on realization.
True
False
The first step of the liquidation process is the sale of the non-cash assets and distribution of realization gain or loss?
True
False
Theoretical loss refers to the balance of non-cash assets that were not sold during the liquidation process?
True
False
Any partner who may develop a debit balance in his capital account may exercise the right of offset?
True
False
In every partnership liquidation, a general partner's separate/personal asset can be subjected to claims from creditors after partnership assets are exhausted?
False
True
When non-assets are sold more than the book value, the sale results to a loss on realization?
True
False
Realization in its simplest term means dissolution with liquidation?
True
False
Solvent partner is a deficient partner who is capable of paying his capital deficiency?
True
False
A partner who develops a debit balance after distribution of realization loss may contribute additional cash to the partnership?
True
False
A partner who is declared insolvent, his capital deficiency will be absorbed by the remaining partners with credit balances based in profit and loss sharing ratio?
False
True
In partnership liquidation, partner's loan account and the obligation of the partnership to outsiders need to be separated although these are both liabilities?
True
False
There can be no liquidation unless the business has to be dissolved?
True
False
In the order of payments, payment to outside creditors ranks second in the priority than payment to partner's loan?
True
False
The journal entry needed in the right to offset is to debit the capital account of the deficient partner and credit to loan account of the said partner?
False
True
In liquidation by installment, the distribution of cash could be a problem if the said cash will not be distributed as it becomes available but has to wait until the whole liquidation process is through?
False
True
The problem of equitable distribution of cash to the partners can be resolved by preparing the"cash safety payment schedule"?
True
False
In liquidation by installment, the main problem is how to equitable distributed cash as it becomes available while some non-cash assets are waiting to be sold.
False
True
When partners A, B, and C which has a profit and loss sharing ratio of 2:3:5, and B is insolvent in the liquidation process, the theoretical loss will be absorbed by A and C in a fractional share of 2/7 and 5/7.
True
False
The process of winding up the business activity is converting non-cash assets into cash, paying its liabilities and distribution of cash and the remaining assets to individual-
realization
dissolution
liquidation
none of these
When the partnership's non-cash assets are realized at less than its book value during the liquidation process, it results to a -
gain on realization
loss on realization
deficiency transactions
none of these
The following are the causes of partnership's dissolution with liquidation, except-
bankruptcy of the firm
when a partner dies
mutual agreement among partners to close the business
the purpose of which it is organized is accomplished already
When a partner develops a debit balance in his capital, but such partner has a loan to the partnership, he may exercise the doctrine of-
right to seizure
right to offset
partner's right
none of these
In preparing a cash distribution plan, the partner's capital and loan accounts should be-
both separated
combined
segregated
none of these
Under liquidation by installment, the partner who receives cash when there is cash available is the one-
who can sell the biggest portion of assets
who has a negligible amount of liability
who can absorbed the share of theoretical or possible loss
none of these
Shareholder's share of a corporation's accumulated profit from its operation is termed as-
liquidating dividends
dividends out of earnings
unappropriated dividends
dividends on hand
Cash dividends but still unpaid during the preparation of Statement of Financial Position is presented as a/an-
current liability
addition to shareholder's equity
disclosure in the balance sheet
current asset under cash and cash equivalent
which of the following statement is true concerning share dividends?
it reduces accumulated profits(losses) and increases share capital
it does not change the total shareholders' equity
retained earnings is said to have been capitalized
all of the above
In dividends declaration, there are three(3) important dates to remember, except
date of payment
date of record
date of declaration
date of incurrence
Solve the following problem. Direct amount only to submit your answer. The shareholders' Equity of Smart Babies Inc. on December 31, 2019 appeared as follows:
Ordinary Shares, authorized 3,000 par value P 100;
Issued 1,000 shares of which 200 shares are in the treasury P 100,000
Appropriated for Accumulated Profits and Losses P 20,000
Free or Unappropriated 60,000
Less: Treasury Shares 20,000
Total Shareholders' Equity P 160,000
How many shares are still unissued?
(a)
Solve the following problem. Direct amount only to submit your answer. The shareholders' Equity of Smart Babies Inc. on December 31, 2019 appeared as follows:
Ordinary Shares, authorized 3,000 par value P 100;
Issued 1,000 shares of which 200 shares are in the treasury P 100,000
Appropriated for Accumulated Profits and Losses P 20,000
Free or Unappropriated 60,000
Less: Treasury Shares 20,000
Total Shareholders' Equity P 160,000
How many shares are outstanding?
(a)
Solve the following problem. Direct amount only to submit your answer. The shareholders' Equity of Smart Babies Inc. on December 31, 2019 appeared as follows:
Ordinary Shares, authorized 3,000 par value P 100;
Issued 1,000 shares of which 200 shares are in the treasury P 100,000
Appropriated for Accumulated Profits and Losses P 20,000
Free or Unappropriated 60,000
Less: Treasury Shares 20,000
Total Shareholders' Equity P 160,000
How much amount of Accumulated Profits and Losses that can be available for dividend declaration?
(a)
Solve the following problem. Direct amount only to submit your answer. The shareholders' Equity of Smart Babies Inc. on December 31, 2019 appeared as follows:
Ordinary Shares, authorized 3,000 par value P 100;
Issued 1,000 shares of which 200 shares are in the treasury P 100,000
Appropriated for Accumulated Profits and Losses P 20,000
Free or Unappropriated 60,000
Less: Treasury Shares 20,000
Total Shareholders' Equity P 160,000
If 10% share dividend is declared, how many shares will be taken out from the unissued share capital?
(a)
Solve the following problem. Direct amount only to submit your answer. The shareholders' Equity of Smart Babies Inc. on December 31, 2019 appeared as follows:
Ordinary Shares, authorized 3,000 par value P 100;
Issued 1,000 shares of which 200 shares are in the treasury P 100,000
Appropriated for Accumulated Profits and Losses P 20,000
Free or Unappropriated 60,000
Less: Treasury Shares 20,000
Total Shareholders' Equity P 160,000
How much amount of the Accumulated Profits and Losses account will be capitalized on a 10% share dividends declared?
(a)
Solve the following problem. Direct amount only to submit your answer. The shareholders' Equity of Smart Babies Inc. on December 31, 2019 appeared as follows:
Ordinary Shares, authorized 3,000 par value P 100;
Issued 1,000 shares of which 200 shares are in the treasury P 100,000
Appropriated for Accumulated Profits and Losses P 20,000
Free or Unappropriated 60,000
Less: Treasury Shares 20,000
Total Shareholders' Equity P 160,000
After the declaration of share dividends, the total shareholders' equity will show an amount of?
(a)
Solve the following problem. Direct amount only to submit your answer. The shareholders' Equity of Smart Babies Inc. on December 31, 2019 appeared as follows:
Ordinary Shares, authorized 3,000 par value P 100;
Issued 1,000 shares of which 200 shares are in the treasury P 100,000
Appropriated for Accumulated Profits and Losses P 20,000
Free or Unappropriated 60,000
Less: Treasury Shares 20,000
Total Shareholders' Equity P 160,000
Assuming that the 200 shares in the treasury will be sold at P 105 per share, how much amount will be credited to "Share Premium" Treasury Share account?
(a)
