1. Accounting 30
Long Test 1
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2. Chapter 2: Partnership
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3. Short Problem 1
Peggy Sue and Mary Lou decided to form a partnership engage in selling religious literature. The assets contributed, the liabilities assumed and the fair market values of each from the partners upon formation of the business are as follows:
Peggy Sue Mary Lou
ASSETS
Cash P 45,000 P 70,000
Accounts Receivable 15, ,000
Allowance for Doubtful Accounts (2000)
Store Supplies 20,000
Store Equipment ,000
LIABILITIES
Notes Payable 26, ,000
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4. Short Problem 1
Give the Journal entry to record the formation of the Partnership.
Cash
Accounts Receivable
Store Supplies
Store Equipment
Notes Payable
Allowance for Doubtful Accounts 2000
Peggy Sue, Capital
Mary Lou, Capital
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5. Short Problem 1
b. If the partner’s agree to disctribute income and losses based on the ratio of their initial capital contributions, Peggy Sue and Mary Lou’s share of one period’s net income of P45,000 would be: Peggy Sue: Mary Lou: 27000
c. If the partner’s agreethat a 5% interest will be given on their initial investments, the remainder to be shared base on the ratio of their initial capital balances, how ould a net loss of P10,000 be shared by Peggy Sue: (4000) and Mary Lou (6000)
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6. Short Problem 2 C, Capital 49,000 Cash 77,000
The ABC Partnership is being liquidated. After all the liabilities have been paid and all the assets sold, the balances of the partner’s capital accounts are as follows:
A, Capital B, Capital C, Capital
| P42, P28,000 | | 63,000
Answer the following questions:
How much cash on hand is available for distribution to the partners immediately after all assets were sold and all liabilities paid? Ans. : 77,000
If B is unable to give his P28,000 unpaid deficiency, how much of this liabilities is absorbed by A’s capital account? (Assume equal sharing of profits and losses by the partners) Ans: P14,000
If the partners share profits and losses equally, the entry to record the final cash distribution to the pertners in a situation where B is unable to pay for his P28,000 deficiency is:
Journal Entry: A, Capital 28,000
C, Capital 49,000
Cash 77,000
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7. Short Problem 3
The balance sheet as of July 31, 20A of AB Tapes, owned by A.B. Sy, show the following assets and liabilities:
Cash P 2,500
Accounts Receivable 10,000
Merchandise Inventory 15,000
Fixed Assets 20,000
Accounts Payable 6,000
It is estimated that 5% of the receivables may prove uncollectible. Merchandise inventory includes obsolete items costing P5,000 of which P2,000 might still be realized. Depreciation has never been recorded. The fixed assets are two years old,have an estimated useful life of 10 years, and would cost P20,000 if currently purchased. Mr. Ariston is to be a partner upon his investment of P20,000 cash and P10,000 worth of merchandise.
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8. The adjusted capital of A.B. Sy is: P38,000
Short Problem 3
The adjusted capital of A.B. Sy is: P38,000
The toal assets of the partnership is:P74,000
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9. Short Problem 4
On Sept. 30, 20A1, Lolla admits Luli for an interest in her business. On this date, Lolla capital account shows a balance of P155,400. The following were agreed upon before the formation of the partnership:
Prepaid expenses of P17,500 and accrued expense of P5,000 are to be recognized.
5% of the outstanding accounts receivable of Lolla amounting to P100,000 is to be recognized as uncollectibles.
Luli is to be credited with a one-third interest in the partnership and is to invest cash aside from the P50,000 worth of merchandise.
How much cash is to be invested by luli? P31,450
The total capital of the partnerships: P244,350
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10. Short Problem 5
Ortiz and Ponce sharing profits on a 60:40 basis own NOP COMPANY. Their post-closing trial balances on June 30, 20A shows the following:
Debit Credit
Cash P 48,000
A/R 92,000
Inventories 165,000
Equipment 70,000
Accumulated Dep ,000
Accounts Payable ,000
Ortiz, Capital ,000
Ponce, Capital ,000
Total , ,000
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11. Short Problem 5
On this date, the partners agree to admit Nuguid to complete their NOP Company. Assets and liabilities are to be restated in accordance with their agreement as follows:
An allowance for possible uncollectibles of P4,500 is to be established.
Inventories are to be restated at their present replacement value of P170,000.
Accrued expenses of P4,000 are to be recognized.
Niguid, Ortiza, and Ponce will divide profits in the ratio of 2:5:3. Capital balances of the new partnership are to be in the agreed ratio, with Ortiz and Ponce making cash settlement between them outside of the partnership to adjust their capitals, and Nuguid investing cash in the partnership for his interest.
The cash to be invested by Nuguid is: P59,375
The total capital of the partnership after admission of Nuguid: P296,875
The correct cash settlement between Ortiz and Ponce is P17,537.5 payable to Ponce
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12. Short Problem 6
X, Y, Z are partners with capital balances at year-end of P25,000, P25,000 and P40,000, respectively. Profit and loss ratio is 4:4:2. The following were agreed upon:
Z is to receive a bonus of 10% of net income before other deductions.
Interest of 10% shall be paid on partner’s ending capital in excess of P30,000.
Annual salary of P15,000, P20,000 and P25,000 shall be paid to X,Y, Z, respectively.
Assuming a net income of P171,000 give the profit share of each partner.
X: 52,160. Y: 57,160. Z: 61,680
2. Assuming a net loss of P20,000 for the year, compute for the shares of the respective Partners.
X: (17,400). Y: (12,400). Z: 9800
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13. Long Problem 1
The balances of the accounts of Chic Beauty Shop owned by friends trisha and Sheila, except their capital accounts as of the end of the current month,May 31,2001 are as follows:
A/P P8,000 Rent Expense P20,500
A/R 32,000 Salaries Expense 43,000
Accum. Dep (4000) Sales Revenue 226,000
Cash 65,000 Supplies 28,000
Cost of Goods Sold 105,000 Utilities Expense 12,000
Machinery 40,000 Miscellaneous Exp 8,500
Notes Payable 20,000 Dep. Exp. Machinery 4,000
The beg. Capital investment of Trisha and Sheila areP60,000 and P40,000 respectively. They agreed that Sheila would receive a monthly salary allowance of P12,500 while Trisha will get P17,500 monthly. Apart from this, a 12% interest per annum on their original contributions will be given with the remainder to be allocated on the basis of their capital contribution ratio.
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14. Long Problem 1
1. Prepare in good form the statement of Changes in Owner’s Equity of Chic Beauty shop for the month ending May 31, 2001.
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15. Long Problem 1
2. Consider each of the following independent situations and make the corresponding journal entry to record the transactions.
After the financial statements were made on may 31, 2001, each partner agreed to sell1/2 of each of their respective interest at that point in time to Bless, whom they admit as a partner in exchange for P70,000 in cash.
On June 1, 2001, Courtney, investing P30,000 cash,finally became a partner after persistent requests by both Sheila and trisha for her to join their company. In exchange for agreeing to join the business, she is to receive a 25% interest in the partnership.
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16. Long Problem 2
Long Problem 2
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17. Long Prob 2 Answer
Long Problem 2 Answer
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18. Long Problem 3
Long Problem 3
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19. Long Problem 3 Answer
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20. Long Problem 4
Long Problem 4
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21. Long Problem Answer
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22. Long Problem 4 answer
Long Problem 4 Answer
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23. Long Problem 5
Long Problem 5
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24. Long Problem 5
Long Problem 5
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25. Long Problem 5
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26. Long Problem 5 Answer
Long Problem 5 Answer
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27. Long Problem 5 Answer
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28. Long Problem 5 Answer: Balance Sheet
(No answer for Asset and Liabilities) : Answer this on your own.
Equity
April, Capital
May, Capital
June, Capital
Total Equity
Total Liabilities and Equity
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29. Long Problem 5 : answer
Long Problem 5 Answer
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