S interest. PROBLEM 4: MULTIPLE CHOICE - COMPUTATIONAL 1. A, B and C with profit and loss sharing ratio of 4:3:3, respectively, have the following condensed statement of rawal of C financial position: and B after Assets 1,880,000 Liabilities 480,000 A, Capital 620,000 B, Capital val on the 400,000 C, Capital 380,000 Total 1,880,000 Total 1,880,000 Is C P1,240,00 D will be admitted as a new partner with a 20% interest after he pays the three partners a premium of 10%. Under the book value method, D's capital credit will be: a. 200,000 c. 350,000 awal of C. b. 280,000 d. 376,000 (RPCPA - Adapted) hdrawal. al on the to 2. The capital accounts and profit and loss sharing ratios of A, B and C are as follows: A (1/2) P139,200; B (1/3) P208,800; and C (1/6) P96,000. On this date, D is admitted to the partnership f P1,000,000 a when he purchased, for P132,000, a proportionate interest from A and B in the net assets and profits of the partnership. and fair value As a result of the transaction, D acquired one-fifth interest in stiley the net assets and profits of the firm. What is the combined gain realized by A and B upon the sale of a portion of their C's retirement interest in the partnership to D? a. 0 c. 62,400 verted into b. 43,200 d. 82,000 (AICPA - Adapted) ordinary shat singcost ners' respect 3. A and B are partners with capital balances of P200,000 and P100,000 and sharing profits and losses at 3:1, respectively. They decided to admit C as a new partner with a 50% interest sued to each in the firm. C invested cash of P150,000, and A and B transferred portions of their capitals as bonus to C. After C's admission, B's capital would be a. 37,500. c. 81,250.94 d. 100,000. b. 56,250. PL sharing percentage (RPCPA - Adapted) 4. A and B are partners with capital balances of P200,000 P100,000 and profit sharing ratio of 3:1, respectively. The agree to admit C as a new partner. C invests P125,000 for 7 A decided to retire a 25% interest in the firm and the parties agree that the to entry on A's retireme firm capital after C's admission is to be P425,000. After a. credit to B's cap admission, the partners' capital balances would be b. credit to B's cap a. 214,062.50, 104,687.50, and 106,250.00, respectively. b. 225,000.00, 100,000.00, and 100,000.00, respectively. c debit to b d debit to C's cap C. 239,062.50, 79,687.50, and 125,000.00, respectively. d. 250,000.00, 75,000.00, and 100,000.00, respectively. (RPCPA - Adapted) & A withdrew from the partnership. 5. The admission of a new partner to a 20% interest in ; withdrawal? partnership for an investment of P18,000, but with a capital credit based on P100,000 total contributed capital, will resultin a. 112,000 b. 116,800 a. bonus to the old partners. b. bonus to the new partner. c. goodwill to the old partners. 9. The capital bala d. goodwill to the new partner. Happy, Capital (201 (RPCPA - Adapted) Sad, Capital (80%) 6. The capital balances of partners Ming and Piw are P80,000 and The net assets of th P40,000, respectively. They share in profits and losses in the wants to invest in ratio of 3:2. They have a desperate need for cash and the much should Ang agree to admit Andre as a new partner with a 1/3 interestin reflect the fair val both capital and profits upon the latter's capital infusion the adjusted capit P30,000. No goodwill is to be recognized. After Andrei Andre are: admission, the respective capital balances of Ming, Piw any a. 50,000, 50,000, and 50,000. b. 66,667, 33,333, and 50,000. c. 68,000, 32,000, and 50,000. d. 80,000, 40,000, and 30,000. (RPCPA - Adapted)0,000 respectively. Use the following information for the next two items: ests P125,000 for The partners in ABC Co. had the following capital balances and gree that the P/L sharing percentages: A (50%) P320,000; B (30%) P192,000; and 125,000. After C (20%) P128,000. ild be 7. A decided to retire and sold his interest to B for P360,000. The pectively. entry on A's retirement included a pectively. a. credit to B's capital for P360,000. ctively. b. credit to B's capital for P320,000. ctively. c. debit to B's capital for P24,000. d. debit to C's capital for P16,000. interest in 8. A withdrew from the partnership and was paid P360,000 by the partnership. What is the capital balance of C right after A's with a capit al, will resulti withdrawal? a. 112,000 c. 168,000 136 b. 116,800 d. 172,000 9. The capital balances of Happy and Sad are as follows: Happy, Capital (20%) 60,000 0Goose bris. Sad, Capital (80%) 20,000 P80,000 and The net assets of the partnership approximate fair values. If Angry losses in the wants to invest in the partnership for a 20% interest, how sh and the much should Angry invest if the amount of investment must 3 interest i reflect the fair value of the interest acquired? how much is the adjusted capital balance of Sad after the admission of Angry? infusion er Andre a. 20,000 20,000 C. 20,000 24,000 g, Piw and b. 25,000 20,000 d. 25,000 16,000 10. Kern and Pate are partners with capital balances of P60,000 and P20,000, respectively. Profits and losses are divided in the ratio of 60:40. Kern and Pate decided to form a new partnership with Grant, who invested land valued at P15,000 for a 20% capital interest in the new partnership. Grant's cost96 of the land was P12,000. The partnership elected to use it bonus method to record the admission of Grant into the the amount of partnership. Grant's capital account should be credited for c. 16,000. 120, 000. a. 12,000. d. 19,000. 135000. b. 15,000. Partners A and B, who share (AICPA) have the following statement 11. The net assets of ABC Co. as of July 1, 20x1 consists of the following: A (20%), P300,000; B (30%), P500,000; and C (50%) 120,000 P200,000. Profit of P1,800,000 for the six months ended June 30 100,000 20x1 is not yet closed to partners' respective capital accounts 140,000 C withdraws on July 1, 20x1 and the partnership pays him Accounts receivable P1,000,000 cash and gives him fully depreciated equipment 72,000 with fair value of P600,000. What is the capital balance of B 432,000 right after C's withdrawal? quipment net a. 780,000 c. 700,000 b. 1,220,000 d. 1,100,000 They agreed to incorporate Use the following information for the next three items: corporation absorbing the A, B and C are partners with capital balances of P300,000, P300,000 adjustments: provision for b and P200,000, respectively. The partners share in profits and losses inventory to P160,000 to rec equally. C is to retire and it is agreed that he would take furniture write-down; recognition of fu with carrying amount of P65,000 and a note for the balance of his of 23 0. The corporation's interest. The fair value of the furniture is P50,000; however, a brand-new furniture would cost P80,000. 1200, and the partners are to equivalent to their adjusted 12. C's acquisition of the furniture would result in value of the total shares issu a. reduction in capital of P15,000 each for A and B. a. 260,000 b. reduction in capital of P10,000 for C. b. 267 000 RPCPA- Adapted c. reduction in capital of P5,000 each for A, B and C. (RPCPA - Adapted) d. reduction in capital of P7,500 each for A and B. 13. C's acquisition of the furniture would result in a. reduction in capital of P5,000 each for A and B only. b. reduction in capital of P7,500 each for A and B only. c. reduction in capital of P15,000 for C.d. reduction in capital of P55,000 for C. (RPCPA - Adapted) 14. The amount of the note issued to C is a. 120,000. c. 145,000. b. 135,000. d. 150,000. of the (RPCPA - Adapted) (50% Ine 30 15. Partners A and B, who share equally in profits and losses, have the following statement of financial position as of Dec. ounts 31, 20x1: s him Cash 120,000 Accounts payable 172,000 pmen Accounts receivable 100,000 .A, Capital 140,000 e of R Inventory 140,000 B, Capital 120,000 Equipment, net 72,000 Total assets 432,000 Total liabilities & equity 432,000 They agreed to incorporate their partnership, with the new corporation absorbing the net assets after the following 00,000 adjustments: provision for bad debts of P10,000; write-up of losses inventory to P160,000 to recognize the reversal of a previous niture write-down; recognition of further depreciation on the equipment of his of P3,000. The corporation's capital stock is to have a par value of P100, and the partners are to be issued corresponding total shares ver, equivalent to their adjusted capital balances. The aggregate par value of the total shares issued to A and B was: a. 260,000 c. 273,000 b. 267,000 d. 280,000 (RPCPA - Adapted) SE