1. AAA, BBB and CCC are partners with average capital balances during 2008 of P120,000,

P60,000 and P40,000, respectively. Partners receive 10% interest on their average capital

balances. After deducting salaries or P30,000 to AAA and P20,000 to CCC, the residual

profit or loss is divided equally. In 2009 the partnership sustained a P33,000 loss before

interest and salaries to partners. By what amount should AAA's account change?

a. P7,000 increase c. P35,000 decrease

b. P11,000 decrease d. P42,000 increase

2. The partnership agreement of AAA, BBB and CCC provides for the year-end allocation of

net income in the following order:

First, AAA is to receive 10% of net income up to P100,000 and 20% over P100,000

Second, BBB and CCC each are to receive 5% of the remaining income over P150,000

The balance of income is to be allocated equally among the three partners

The partnership's 2009 net income was P250,000 before any allocations to partners. What

amount should be allocated to AAA?

a. P101,000 c. P108,000

b. P103,000 d. P110,000

3. The Articles of Partnership of Adam and Eve the following provisions were stipulated:

Annual salary of P60,000 each

Bonus to Adam of 20% of the net income after partner's salaries and bonus, the bonus

being treated as an expense.

Balance to be divided equally.

The partnership reported a net income of P360,000 after partners' salaries but before

bonus. How much is the share of Eve in the profit?

a. P 60,000

b. 90,000

c. 150,000

d. 210,000

4. Maxwell is trying to decide whether to accept a salary of P40,000 or salary of P25,000 plus

a bonus of 10% of net income. After salaries and bonus as a means of allocating profit

among partners. Salaries traceable to the other partners estimated to be P100,000. What

amount of income would be necessary so that Maxwell would consider choices to be

equal?

a. P165,000

b. 290,000

c. 265,000

d. 305,0005. Partner A first contributed P50,000 of capital into existing partnership on March 1, 2002. On

June 1, 2002, said partner contributed another P20,000. On September 1, 2002, he

withdrew P15,000 from the partnership. Withdrawal in excess of P10,000 are charged to

the partner's capital accounts. What is the annual weighted average capital balance of

Partner A?

a. P 32,500

b. 51,667

c. 60,000

d. 48,333

6. Garcia and Henson formed a partnership on January 2, 2005 and agreed to share profits

90% and 10%, respectively. Garcia contributed capital of P 25,000. Henson contributed

no capital but has a specialized expertise and manages the firm full time. There were no

withdrawals during the year. The partnership agreement provides for the following:

Capital accounts are to be credited annually with interest at 5% of beginning capital.

Henson is to be paid a salary of P1,000 a month.

Henson is to receive a bonus of 20% of income calculated before deducting his salary

and interest on both capital accounts.

Bonus, interest, and Henson's salary are to be considered partnership expenses.

The partnership 2005 income statement as follows:

Revenues P 96,450

Expenses (including salary, interest, and bonus) 49,700

Net income P 46,750

What is Henson's 2005 bonus?

a. P 11,688

b. 12,000

c. 15,000

d. 15,738