1) The document contains multiple choice questions and solutions related to partnership formation computational problems.
2) Questions involve calculating partner capital amounts, cash contributions, and transfers between partners based on asset valuations, profit/loss ratios, and bonus or non-cash asset amounts.
3) Solutions show step-by-step workings including calculating total partnership capital, adjusting partner capital for non-cash assets, and determining cash amounts required from each partner.
1) The document contains multiple choice questions and solutions related to partnership formation computational problems.
2) Questions involve calculating partner capital amounts, cash contributions, and transfers between partners based on asset valuations, profit/loss ratios, and bonus or non-cash asset amounts.
3) Solutions show step-by-step workings including calculating total partnership capital, adjusting partner capital for non-cash assets, and determining cash amounts required from each partner.
1) The document contains multiple choice questions and solutions related to partnership formation computational problems.
2) Questions involve calculating partner capital amounts, cash contributions, and transfers between partners based on asset valuations, profit/loss ratios, and bonus or non-cash asset amounts.
3) Solutions show step-by-step workings including calculating total partnership capital, adjusting partner capital for non-cash assets, and determining cash amounts required from each partner.
1) The document contains multiple choice questions and solutions related to partnership formation computational problems.
2) Questions involve calculating partner capital amounts, cash contributions, and transfers between partners based on asset valuations, profit/loss ratios, and bonus or non-cash asset amounts.
3) Solutions show step-by-step workings including calculating total partnership capital, adjusting partner capital for non-cash assets, and determining cash amounts required from each partner.
Solution: Cash to be invested by Mendez: Adjusted capital of Lopez (2/3) Unadjusted capital P158,400 Adjustments: Prepaid expenses 17,500 Accrued expenses ( 5,000 ) Allowance for bad debts (5% x P100,000 ) ( 5,000 )
Adjusted capital P165,900
Total partnership capital ( P 165,900 ÷ 2/3 ) P248,850
Multiply by Mendez’s interest 1/3%
Mendez’s capital P 82,950
Less Merchandise contributed 50,000
Cash to be invested by Mendez P 32,950
Total Capital:
Adjusted capital of Lopez P165,900
Contributed Capital of Mendez 82,950
Total Capital P 248,850
2. D. P77,500 Solution:
Moran, capital ( 40% )
Cash P 15,000 Furnitures and Fixtures 100,000 P 115,000 Divide by Moran’s P and L share percentage 40%
Total partnership capital P 287,500
Multiply by Nakar’s P & L share percentage 60%
Required capital of credit of Nakar: P 172,500
Contributed capital of Nakar: Merchandise inventory P 45,000 Land 15,000 Building 65,000
Total assets P 125,000
Less Liabilities 30,000 P 95,000 Required cash investment by Nakar P 77,500
3. C. P17,250 Solution:
Garcia, Capital Unadjusted balance P 49,500 Adjustments: Accumulated depreciation ( 4,500 ) Allowance for doubtful accounts ( 4,500 )
Adjusted balance P 40,500
Flores, capital:
Unadjusted balance P 57,000
Adjustments:
Accumulated depreciation ( 1,500 )
Allowance for doubtful accounts ( 12,000 )
Adjusted balance P 43,500
Garcia’s adjusted capital P 40, 500
Divide by Garcia’s P & L percentage 40%
Total partnership capital P 101,250
Flores’ P & L share percentage 60%
Flores’ capital credit P 60,750
Flores contributed capital 43,500
Additional cash to be invested by Flores P 17,250
4. D. P59, 375
Ortiz Ponce Total
( 60 % ) ( 40 % ) Unadjusted capital balances P 133,000 P 108,000 P241,000 Adjustments: Allowance for bad debts ( 2,700 ) ( 1,800 ) ( 4, 500) Inventories 3,000 2,000 5,000 Accrued expenses ( 2,400 ) ( 1,600 ) ( 4,000 )
Adjusted capital balances P 130,900 P 106,000 P237,500
Total capital before the formation of the new partnership P 237, 500 Divide by the total percentage share of Ortiz and Ponce ( 50% + 30%) 80%
Total capital pf the partnership before he admission of Roxas P 296,875
Multiply by Roxas Interest 20% Cash to be invested by Roxas P 59, 375
FORMATION NO. 3
5. D. P 90,000 and P48,000 respectively.
Merchandise to be invested by Gomez: Total partnership capital ( 180,000 / 60% ) P 300,000
Gomez’s capital ( 300,000 x 40% ) P 120,000
Less Cash investments 30,000
Merchandise to be invested by Gomez P 90,000
Cash to be invested by Jocson:
Adjusted capital of Jocson: Total assets ( at agreed valuations ) P 180,000 Less Accounts payable 48,000 P 132,000 Required capital of Jocson 180,000
Cash to be invested by Jocson P 48,000
6. B. P65,000 Solution:
Unadjusted Ell, Capital ( P 75,000 – P 5,000) P 70,000
Total partnership capital ( P113,640 ÷ 1/3 ) P 340,920
Less David’s capital 113,640
Cortez’s capital after adjustments P 227,280
Adjustments made: Allowance for doubtful account ( 2% x P 96,000 ) 1,920 Merchandise inventory ( 16,000) Prepaid expenses ( 5,200) Accrued expenses 3,200
Cortez’s capital before adjustments P 211,200
Formation # 4
8. A. P3,500,000 Solution:
Total assets at fair value P 4,625,000
Liabilities ( 1,125,000) Capital balance of Flora P 3,500,000
9. C. P 668,000
Solution: Total capital of the partnership (P3,500,000 ÷ 70%) P5,000,000 Eden agreed profit & loss ratio 30% Eden agreed capital 1,500,000 Eden contributed capital at fair value 812,000 Allocated cash to be invested by Eden P 688,000
10. C. From Sam to Tim , P3,600 and from Sam to Rey, P88,200.
Solution:
Rey Sam Tim Total
Contributed capital (assets-liabilities) P471,000 P291,000 P195,000 P957,000
Agreed capital (profit and loss ratio) 382,800 382,800 191,400 957,000 Capital transfer (Bonus) P 88,200 P(91,800) P 3,600 -
11. D. P 15,000
Solution:
Total agreed capital (P90,000 ÷ 40%) P225,000
Contributed capital of Candy (P126,000+P36,000-P12,000) 150,000 Total agreed capital (P90,000 ÷ 40%) 225,000Candy, agreed capital interest 60% Agreed capital of Candy 135,000 Contributed capital of Candy 150,000 Withdrawal P 15,000
