Quiz 1 1203 ACYAVA1 K32 ADVANCED FINANCIAL ACCOUNTING AND REPORTING 1 PDF

9/21/21, 9:39 PM Quiz 1: [1203_ACYAVA1_K32] - ADVANCED FINANCIAL ACCOUNTING AND REPORTING 1
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Quiz 1
Due
Aug 27 at 20:30
Points
57.5
Questions
45
Available
until Aug 27 at 20:30
Time Limit
150 Minutes
This quiz was locked Aug 27 at 20:30.
Attempt History
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Question 1 0
/ 1.5 pts
Partners Leonard, Sheldon, Raj, and Howard who share profits 5:3:1:1,
respectively, decide to liquidate their partnership. Capital balances before
liquidation are:
Leonard P60,000
Sheldon 40,000
Raj 30,000
Howard 10,000
The partners agree to the following:
Partnership’s computer equipment with a book value of P12,000 is to

Course
be taken over by partner Leonard at a price of Chat
P15,000. 
https://dlsu.instructure.com/courses/67283/quizzes/152622 1/33
Partnership’s liabilities are to be paid off and the balance of cash on

hand, P30,000 is to be divided in a manner that will avoid the need for
any possible recovery of cash from a partner.
How much of the P30,000 cash be distributed to Partner Sheldon?

20,000
orrect Answer
10,000
ou Answered
0

15,000
1.5
/ 1.5 pts Send
Question 2
The statement of financial position of Amy and Penny Partnership on May

1, 2023 before liquidation is as follows:
Assets Liabilities and Capital
Cash P14,000 Liabilities P35,000
Amy, Capital
Other assets 71,000 28,000
(70%)
Penny, Capital
22,000
(30%)
Total P85,000 Total P85,000
In May, assets with a book value of P34,000 are sold for P29,000.
Creditors are paid in full. Liquidation expenses of P1,000 is paid, and
P3,000 is paid to partners.
In May, how much did Penny receive?

0
Correct!
3,000

900

2,100
Question 3
Original Score:
0
/ 1.5 pts
Regraded Score:
1.5
/ 1.5 pts
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This question has been regraded.
Halley and Michael started a partnership some years ago and managed to
operate profitably for several years. Recently, however, they lost a
substantial legal suit and incurred unexpected losses on accounts
receivable and inventories. As a result, they decided to liquidate. They
sold all assets and only P162,000 was available to pay liabilities, which
amounted to P297,000. Their capital account balances before the
liquidation and their profit and loss sharing ratios are shown below:
Profit and Loss

Capital Balances
Ratios
Halley P207,000 60%
Michael 121,500 40%
Halley is personally insolvent after investing cash to pay the unpaid

creditors, but Michael has personal assets in excess of P900,000.
In the settlement to partners, how much cash should Halley receive?

orrect Answer
P63,900
ou Answered
0

P15,300

P63,000
Question 4 1.5
/ 1.5 pts
Georgie, Shelly, and Missy are partners in GSM Partnership and share
profits and losses, 5:3:2, respectively. The partners have agreed to
liquidate the partnership. Prior to liquidation, the partnership statement of
financial position shows the following book values:
Cash P25,200
Non-cash assets 297,600
Notes payable to Missy 38,400
Other liabilities 184,800
Georgie, capital 72,000
Shelly, capital (12,000)
Missy, capital 39,600
Liquidation expenses of P16,800 are paid. Non-cash assets with a book

value of P240,000 are sold for P216,000.
How much cash should Missy receive?

74,571

37,600

46,458
Correct!
39,600
Question 5 1.5
/ 1.5 pts
Penny, Amy, and Bernie were partners with capital balances in January 2,
2023 of P300,000, P200,000, and P100,000, respectively. On July 1,
2023, Penny retires from the partnership. On the date of retirement, the
partnership net loss is P60,000 and the partners agreed that a certain
asset is to be revalued at P80,000 from its original cost of P50,000. The
partners agreed further to pay Penny P225,000 in settlement of her
interest. The remaining partners continue to operate under a new
partnership, AB Partnership.
What is the total capital of AB Partnership?

P280,000

P285,000

P340,000
Correct!
P345,000
Question 6 1.5
/ 1.5 pts
On December 31, 2023 the condensed statement of financial position of

RMP Partnership is presented below:
Total assets P180,000
Rachel, loan P10,000
Rachel, capital 45,000
Monica, capital 40,000
Phoebe, capital 85,000
Total P180,000
Rachel, Monica, and Phoebe share profits and losses in the ratio of 3:2:1
respectively. It was agreed among the partners that Rachel retires from
the partnership and the partnership’s assets to be adjusted to their fair
value of P210,000. The partners further agreed to pay Rachel P64,000
cash for her total interest in the partnership including its loan.
What is the capital balance of Phoebe after the retirement of Rachel?

P27,000

P33,000

P35,000
Correct!
P92,000
Question 7 1.5
/ 1.5 pts
The partnership of Chandler and Monica provides for 3:2 sharing in profits
and losses. Prior to the admission of a third partner, Joey, the capital
accounts are: Chandler, P120,000 and Monica, P80,000. Joey invests
P50,000 for a P75,000 interest and partners agreed that the net assets of
the new partnership would be P300,000.
How much is Monica’s capital in the new partnership?

136,000

105,000
Correct!
90,000

70,000
Question 8 1.5
/ 1.5 pts
Ross, Chandler, and Joey are partners sharing earnings in the ratio of
5:3:2 respectively. As of December 31, 2020, their capital balances
showed P95,000 for Ross, P80,000 for Chandler, and P60,000 for Joey.
On January 1, 2023, the partnership admitted Ben as a new partner and

according to the partnership agreement, Ben will contribute P80,000 in
cash to the partnership and will also pay P10,000 for 15% of Chandler’s
share. Ben will share 20% in the earnings while the ratio of the original
partners will remain proportionately the same as before Ben’s admission.
After Ben’s admission, the total capital of the partnership will be P330,000
while Ben’s capital account will be P70,000.
The balance of Chandler’s capital account after the submission of Ben

would be:

74,600
Correct!
79,100

81,100

72,600
Question 9 1.5
/ 1.5 pts
SC Partnership begins its first year of operations with the following capital
balances:
Susan capital P200,000
Carol capital P100,000
According to the partnership agreement, all profits will be

distributed as follows:
Susan will be allowed a monthly salary of P20,000 and Carol will be

allowed a monthly salary of P10,000.
The partners will be allowed with interest equal to 10% of the capital
balance as of the first day of the year.
Susan will be allowed a bonus of 10% of the net profit after bonus.
The remainder will be divided on the basis of the beginning capital for
the first year and equally for the second year.
Each partner is allowed to withdraw up to P10,000 a year.
Assume that the net loss for the first year of operations is P15,000 with
net income of P55,000 in the subsequent year. Assume further that each
partner withdraws the maximum amount from the business each period.
What is the balance of Susan’s capital account at the end of the second
year?
Correct!
264,750

180,000

184,750

284,750
Question 10 0
/ 1.5 pts
Mike Hannigan is trying to decide whether to accept a salary of P40,000

or a salary of P25,000 plus a bonus of 10% of net income after salaries
and bonus as a means of allocating profit among the partners. Salaries
traceable to the other partners are estimated to be P100,000. What
amount of income would be necessary so that Mike Hannigan would
consider the choices to be equal?

165,000
ou Answered
265,000

305,000
orrect Answer
290,000
Question 11 1.5
/ 1.5 pts
Princess Consuela, a partner in the PC Partnership, is entitled to 40% of

the profits and losses. During 2023, Princess Consuela contributed land
to the partnership that cost her P50,000, but had a fair value of P60,000.
Also during 2023, Princess Consuela has drawings of P80,000. The
balance of Princess Consuela capital accounts was P120,000 at the
beginning of the year and P150,000 at the end of the year.
What is the partnership’s comprehensive income (loss) for 2023?

(P50,000)

(P75,000)

150,000
Correct!
125,000
Question 12 1.5
/ 1.5 pts
On January 2, 2023, Carol, Emily, and Rachel formed the CER

Partnership contributing cash as follows:
Carol P192,000
Emily P288,000
Rachel P432,000
The partnership contract provides the following provisions in respect with

partner’s remuneration:
Interest of 12% on average capital balances.

Annual salaries as follows:
Carol P28,800
Emily P24,000
Rachel P27,200
Remainder of the net income divided 40% to Carol, 30% to Emily, and
30% to Rachel.
Income before partner’s salaries and interest for the year ended
December 31, 2023 was P184,160. Carol invested additional cash of
P48,000 to the partnership on July 1, 2023. Rachel withdrew P72,000
from the partnership on October 1, 2023. The partners also withdrew
P1,500 monthly against their share of net income for the year.
What is the capital balance of Carol on December 31, 2023?

257,280
Correct!
274,320

286,992

235,200
Question 13 1.5
/ 1.5 pts
Ben and Emma have just formed a partnership. Ben contributed cash of
P126,000 and computed equipment that cost P54,000. The computer had
been used in his sole proprietorship and had been depreciated to
P24,000. The fair value of the equipment is P36,000. Ben also contributed
a note payable of P12,000 to be assumed by the partnership. Ben is to
have 60% interest in the partnership. Emma contributed only P90,000
cash.
Ben should make an additional investment (withdrawal) of:

84,000

(P76,800)
Correct!
(P15,000)

96,000
Question 14 0
/ 1.5 pts
Princess, Consuela, and Bananahammock formed a partnership on April

30, with the following assets, measured at their fair values, contributed by
each partner:
Princess Consuela Bananahammock
Cash P10,000 P12,000 P30,000
Delivery truck 150,000 28,000 -
Computers 8,500 5,100 -
Office furniture - 3,500 2,500
Totals P168,500 P48,600 P32,500
Although Bananahammock has contributed the most cash to the

partnership, he did not have the full amount of P30,000 available and was
forced to borrow P20,000. The delivery truck contributed by Princess has
a mortgage of P90,000 and the partnership is to assume responsibility for
the loan. The partners agreed to equalize their interest. Cash settlement
among the partners are to be made outside the partnership. What is the
cash settlement outside the partnership?

Princess should pay Consuela and Bananahammock, P25,300

Consuela should pay Princess, P25,300, and Bananahammock, P20,700
ou Answered
Bananahammock should pay Princess, P25,300, and Consuela, P4,600.
orrect Answer
Consuela and Bananahammock should pay Princess, P4,600 and
P20,700, respectively.
Question 15 1.5
/ 1.5 pts
Russ, Paolo, and Tag form a partnership on May 1, 2023. They agreed
that Russ will contribute office equipment with a total fair value of
P40,000; Paolo will contribute delivery equipment with a fair value of
P80,000; and Tag will contribute cash. If Tag wants a one third interest in
the capital and profits, he should contribute cash of

180,000

40,000
Correct!
60,000

120,000
Question 16 1.5
/ 1.5 pts
On March 1, 2023, Mike and David formed a partnership with each

contributing the following assets:
Mike David
Cash P30,000 P70,000
Machinery and equipment 25,000 75,000
Building - 225,000
Furniture and fixtures 10,000 -
The building is subject to a mortgage loan of P80,000, which is to be

assumed by the partnership. The partnership agreement provides that
Mike and David share profits and losses 30% and 70%, respectively. On
March 1, 2023, the balance in David’s capital account should be:

370,000
Correct!
290,000

305,000

314,000
Question 17 1.5
/ 1.5 pts
The accountant of HIMYM Company under liquidation provided the

following data:
Assets at book value P100,000
Assets at net realizable value 75,000
Liabilities at book value:
Fully secured mortgage payable 40,000
Unsecured accounts and notes

45,000
payable
Unrecorded liabilities:
Interest on bank notes 250
Administrative expenses 4,000
What is the estimated deficiency to unsecured creditors?
Correct!
14,250

31,000

35,000

10,000
Question 18 1.5
/ 1.5 pts
A review of the assets and liabilities of the Mosby Company in bankruptcy

on June 30, discloses the following:
A mortgage payable of P350,000 is secured by land and buildings

valued at P560,000
Notes payable of P175,000 are secured by equipment valued at
P140,000
Assets other than those referred to, have an estimated value of
P157,500
Liabilities other than those referred to, total P420,000, which included
claims with priority of P52,500

402,000
Correct!
87,500

35,000

414,000
Question 19 0
/ 1.5 pts
The following data were taken from the statement of affairs of Sherbatsky
Company:
Estimated liabilities with priority P122,500
Stockholders’ equity 441,000
Estimated liquidated expense –

55,125
unrecorded
Unsecured liabilities without priority 1,102,500
Loss on realization of assets 551,250
How much is the total free assets?

937,135
orrect Answer
1,059,625
ou Answered
992,250

953,575
Question 20 1.5
/ 1.5 pts
Stinson Company has had severe financial difficulties and is considering

the possibility of liquidation. At this time, the company has the following
assets (stated at net realizable value) and liabilities.
Assets (pledged against liabilities of

P116,000
P70,000)
Assets (pledged against liabilities of

50,000
P130,000)
Other assets 80,000
Liabilities with priority 42,000
Unsecured creditors 200,000
In liquidation, how much would be paid to the partially secured creditors?

130,000

50,000

200,000
Correct!
74,000
Question 21 1.5
/ 1.5 pts
Aldrin Corporation filed a petition for bankruptcy on March 2023. On April

10, 2023, the trustee provided the following information about the
corporation’s financial affairs:
Estimated Realizab
Book Values
Values
Assets
Cash P80,000 P80,000
Accounts receivable – net 400,000 300,000
Inventories 600,000 280,000
Plant assets – net 1,000,000 1,120,000

Liabilities
Liabilities with priority P320,000
Accounts payable – unsecured 600,000
Note payable – secured by accounts

400,000
receivable
Mortgage payable – secured by plant

880,000
assets
Compute the estimated recovery percentage of unsecured creditors:
Correct!
40%

80%

86%

83%
Question 22 1.5
/ 1.5 pts
The following data were taken from the statement of affairs of Eriksen
Company:
Estimated Re
Book Values
Values
Assets
Cash P6,000 P6,000
Accounts receivable 60,000 60,000
Land 100,000 80,000
Building (net) 220,000 160,000
Equipment (net) 250,000 100,000

Liabilities
Accounts payable P95,000
Wages payable (all have priority) 9,500
Taxes payable 14 000

Taxes payable 14,000
Notes payable (secured by receivables and

190,000
inventory)
Interest on notes payable 5,000
Bonds payable (secured by land and building) 220,000
Interest on bonds payable 11,000

68,000

68,500
Correct!
73,500

73,000
Question 23 1.5
/ 1.5 pts
The following data were taken from the statement of affairs of Eriksen
Company:
Estimated Re
Book Values
Values
Assets
Cash P6,000 P6,000
Accounts receivable 60,000 60,000

Land 100,000 80,000
Building (net) 220,000 160,000
Equipment (net) 250,000 100,000

Liabilities
Accounts payable P95,000
Wages payable (all have priority) 9,500
Taxes payable 14,000
Notes payable (secured by receivables and

190,000
inventory)
Interest on notes payable 5,000
Bonds payable (secured by land and building) 220,000
Interest on bonds payable 11,000
What is the amount to be paid to partially secured creditors?

163,150

161,000

161,043
Correct!
163,815
Question 24 1.5
/ 1.5 pts
The following data were taken from the statement of realization and
liquidation of GNB Corporation for the three-month period ended
December 31, 2023:
Assets to be realized P55,000
Assets acquired 60,000
Assets realized 70,000
Assets not realized 25,000
Liabilities to be liquidated 90,000
Liabilities assumed 30,000
Liabilities liquidated 60,000
Liabilities not liquidated 75,000
Supplementary credits 85,000
Supplementary charges 78,000
What is the net income (loss) for the period?
Correct!
(P28,000)

7,000

28,090

(P35,000)
Question 25 1.5
/ 1.5 pts
A statement of realization and liquidation has been prepared. Totals

therefrom are as follows:
Assets to be realized P80,000
Assets acquired 40,000
Assets realized 30,000
Assets not realized 90,000
Liabilities to be liquidated 80,000
Liabilities assumed 50,000
Liabilities liquidated 100,000
Liabilities not liquidated 30,000
Supplementary credits 110,000
Supplementary charges 98,000
The ending balances of capital stock and retained earnings are P100,000
and P18,000 respectively.
How much was the ending balance of cash?

45,000
Correct!
58,000

35,000

59,000
Question 26 1
/ 1 pts
Which of the following is not a characteristic of most partnership?

Mutual agency

Limited life
Correct!
Limited liability

Ease of formation
Question 27 1
/ 1 pts
Which of the following is not a characteristic of the proprietary theory that

influences accounting for partnerships?

Changes in the ownership structure of a partnership result in the
dissolution of the partnership.
Correct!
A partnership is characterized by limited liability.

A partnership is not viewed as a separate entity, distinct, taxable entity.

Partners’ salaries are viewed as a distribution of income rather than a
component of net income.
Question 28 1
/ 1 pts
Which of the following statements is correct with respect to a limited

partnership?

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

A general partner may also be a limited partner at the same time.

A limited partner may not be an unsecured creditor of the limited
partnership.
Correct!
A general partner may be a secured creditor of the limited partnership.
Question 29 1
/ 1 pts
An advantage of the partnership as a form of business organization would

be

A partnership may be terminated by the death or withdrawal of a partner.

Partners do not pay income taxes on their share in the partnership income.

A partnership is bound by the act of the partners.
Correct!
A partnership is created by mere agreements of the partners.
Question 30 1
/ 1 pts
When property other than cash is invented in a partnership, at what

amount should the noncash property be credited to the contributing
partner’s capital account?

Contributing partner’s original cost.

Assessed valuation for property tax purposes.
Correct!
Fair value at the date of contribution.

Contributing partner’s tax basis.
Question 31 1
/ 1 pts
Partnership capital and drawing accounts are similar to the corporate

Retained earnings account.
Correct!
Paid in capital, retained earnings, and dividend accounts.

Preferred and common stock accounts.

Paid in capital and retained earnings accounts.
Question 32 1
/ 1 pts
On April 30, 2020, Penny, Amy, and Bernadette formed a partnership by

combining their separate business proprietorships. Penny contributed
cash of P50,000. Amy contributed property with a P36,000 carrying
amount, a P40,000 original cost, and P80,000 fair value. The partnership
accepted responsibility for the P35,000 mortgage attached to the property.
Bernadette contributed equipment with a P30,000 carrying amount, a
P75,000 original cost, and P55,000 fair value. The partnership agreement
specifies that profits and losses are shared equally but is silent.
Which partner has the largest capital account balance at April 30, 2020?

Penny
Correct!
Bernadette

Amy

All capital balances are equal
Question 33 1
/ 1 pts
If a new partner acquired a partnership interest directly from the partners

rather than from the partnership itself,

The partnership has undergone a quasi-reorganization.

No entry is required.

The partnership assets should be revalued.
Correct!
The existing partner’s capital accounts should be reduced and the new
partner’s account increased.
Question 34 1
/ 1 pts
Which of the following results in dissolution of a partnership?

The contribution of additional assets to the partnership by an existing
partner.

The receipts of a draw by an existing partner.
Correct!
The withdrawal of a partner from a partnership.

The winding up of the partnership and the distribution of remaining assets
to the partners.
Question 35 0
/ 1 pts
When a new partner is admitted to a partnership, an original partner’s

capital account may be adjusted for
ou Answered
A proportionate share of the incoming partner’s investment.

His or her share of previously unrecorded intangible assets traceable to
the incoming partners.

None of the above.
orrect Answer
His or her share of previously unrecorded intangible assets traceable to
the original partners.
Question 36 0
/ 1 pts
Which of the following best characterizes the bonus method of recording a

new partner’s investment in a partnership?

The new partner’s initial capital balance is equal to his or her investment.
ou Answered
The bonus always results in an increase to the previous partners’ capital
balances.

Net assets of the previous partnership are not revalued.
orrect Answer
Assuming that recorded assets are properly valued, the book value of the
new partnership is equal to the book value of the previous partnership and
the investment of the new partner.
Question 37 1
/ 1 pts
Which of the following best illustrates the insolvency of a firm?

The filing of bankruptcy proceedings against the firm.

The firm has negative working capital.
Correct!
The firm has more liabilities than assets.

A deficit in the firm’s retained earnings.
Question 38 1
/ 1 pts
If the value of the pledged property is lesser than the obligation, what is
the treatment of the liability?

Collateralized

Unsecured.
Correct!
Partially secured.

Fully secured.
Question 39 1
/ 1 pts
The primary difference between a balance sheet and an accounting

statement of affairs is that:

Owners’ equity is not considered in the statement of affairs.

Assets are arranged in a different sequence.

Liabilities are arranged in a different sequence.
Correct!
A balance sheet reflects book values, while a statement of affairs
emphasizes realization values.
Question 40 1
/ 1 pts
An accounting statement of affairs of a corporation in financial difficulty

indicates that unsecured creditors would receive P0.40 on the peso.
Which one of the following assets is most likely to realize the smallest
percentage of its book value?

Inventories.

Plant and equipment.

Accounts receivable.
Correct!
Goodwill.
Question 41 1
/ 1 pts
If a dividend of 80% is allocable to Class 7 unsecured creditors based on

an accounting statement of affairs, it correctly may be concluded that

All unsecured claims will be paid in full.

Stockholders will receive 20% of their equity.
Correct!
Class 1 through 6 unsecured claims will be paid in full.

All unsecured claims will receive the same percentage of return.
Question 42 1
/ 1 pts
An arrangement for creditors to accept an amount less than the amount

owed to them is referred to as a

Chandler agreement

Bankruptcy agreement.

Charge and discharge agreement.
Correct!
Composition agreement.
Question 43 0
/ 1 pts
In a liquidation proceeding, if the proceedings on the realization of an

asset exceed the lien against the asset, the excess is assigned to

The stockholders of the corporation.
orrect Answer
Meet the claims of the unsecured creditors.
ou Answered
Other lien holders whose assets will not realize a sufficient amount to
cover their liens.

The holder of the lien.
Question 44 1
/ 1 pts
Fully secured creditors ALWAYS receive 100% of their claims.
Correct!
True

False
Question 45 0
/ 1 pts
Unsecured creditors with priority always receive 100% of their claims.
ou Answered
True
orrect Answer
False
Quiz Score:
47.5 out of 57.5

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9/21/21, 9:39 PM Quiz 1: [1203_ACYAVA1_K32] - ADVANCED FINANCIAL ACCOUNTING AND REPORTING 1

This quiz was locked Aug 27 at 20:30.

Score for this quiz:

The partners agree to the following:

Partnership’s computer equipment with a book value of P12,000 is to

Partnership’s liabilities are to be paid off and the balance of cash on

How much of the P30,000 cash be distributed to Partner Sheldon?

The statement of financial position of Amy and Penny Partnership on May

Assets Liabilities and Capital

Cash P14,000 Liabilities P35,000

Total P85,000 Total P85,000

In May, how much did Penny receive?

Profit and Loss

Halley P207,000 60%

Michael 121,500 40%

Halley is personally insolvent after investing cash to pay the unpaid

In the settlement to partners, how much cash should Halley receive?

Non-cash assets 297,600

Notes payable to Missy 38,400

Other liabilities 184,800

Georgie, capital 72,000

Shelly, capital (12,000)

Missy, capital 39,600

Liquidation expenses of P16,800 are paid. Non-cash assets with a book

How much cash should Missy receive?

What is the total capital of AB Partnership?

On December 31, 2023 the condensed statement of financial position of

Total assets P180,000

Rachel, loan P10,000

Rachel, capital 45,000

Monica, capital 40,000

Phoebe, capital 85,000

What is the capital balance of Phoebe after the retirement of Rachel?

How much is Monica’s capital in the new partnership?

On January 1, 2023, the partnership admitted Ben as a new partner and

The balance of Chandler’s capital account after the submission of Ben

Susan capital P200,000

Carol capital P100,000

According to the partnership agreement, all profits will be

Susan will be allowed a monthly salary of P20,000 and Carol will be

Mike Hannigan is trying to decide whether to accept a salary of P40,000

Princess Consuela, a partner in the PC Partnership, is entitled to 40% of

What is the partnership’s comprehensive income (loss) for 2023?

On January 2, 2023, Carol, Emily, and Rachel formed the CER

The partnership contract provides the following provisions in respect with

Interest of 12% on average capital balances.

What is the capital balance of Carol on December 31, 2023?

Ben should make an additional investment (withdrawal) of:

Princess, Consuela, and Bananahammock formed a partnership on April

Princess Consuela Bananahammock

Cash P10,000 P12,000 P30,000

Delivery truck 150,000 28,000 -

Computers 8,500 5,100 -

Office furniture - 3,500 2,500

Totals P168,500 P48,600 P32,500

Although Bananahammock has contributed the most cash to the

On March 1, 2023, Mike and David formed a partnership with each

Cash P30,000 P70,000