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Red and White formed a partnership in 2010. The partnership agreement provides

for annual salary allowances of P55,000 for Red and P5,000 for White. The partners

share pro!ts e"ually and losses in a #0$0 ratio. The partnership had earnings of

P%0,000 for 200# &efore any allowance to partners. What amount of these earnings

should &e credited to each partner's capital account(

Red white

0,000))0,000

***+,000)+,000

,000))+#,000

5,000))+5,000

-o, /reg and owe are partners wit average capital &alances during 2010 of

P120,000, P#0,000 and P0,000, respectively. Partners receive 10 interest on their

average capital &alances . after deducting salaries of P+0,000 to -o and P20,000 to

ow's , the residual pro!t or loss is divided e"ually. n 2010, the partnership

sustained a P++,000 loss &efore interest and salaries to partners. 3y what amount

should -o capital account change(

***,000 increase

11,000 decrease

+5,000 decrease

2,000 increase

The partnership agreement of 4onna, ddy, and -arr provides for annual distri&ution

of pro!t and loss in the following se"uence6

)4onna ,the managing partner receives a &onus of 10 pro!t

)ach partner receives # interest on average capital investment

)Residual pro!t or loss is divided e"ually

)7verage capital investment for 2010 were6

4onna %0,000

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ddy 50,000

-arr +0,000

What portion should &e allocated to 888(

4onna 1,#00

ddy 29,%00

-arr 2%,#00

+5,1++

++,++++

The 7rticles of Partnership of 7dam and ve the following provisions werestipulated6

)annual salary of P#0,000 each

)3onus to 7dam of 20 of the net income after partnes' salaries , the &onus &eing

treated as an epense.

)&alance to &e divided e"ually

The partnership reported a net income of P+#0,000 after partners' salaries &ut

&efore &onus. ow much is the share of 888 in the pro!t(

7dam 20,000

ve 210,000

#0,000

90,000

150,000

Partners 77 and 33 have pro!t and loss agreement with the following provisions 6

salaries of P+0,000 and P5,000 for 77 and 33, respectively: a &onus to 77 of 10

of the net income after salaries and &onus : and interest of 10 on average capital

&alances of P20,000 for 77 and P+5,000 for 33. ;ne<third of any remaining pro!ts

will &e allocated to 77 and the &alance to 33. f the partnership had net income of

P102,500, how much should &e allocated to Partner 77(

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77 1,000 =,250)),500))1,1#>

33 #1,500

7 partnership has the following accounting amounts6

?ales 00,000

@ost of goods sold 00,000

;perating epense 100,000

?alary allocations to partners 1+0,000

nterest paid to &anAs 20,000

Partners' drawings %0,000

What is the partnership net income =loss>(

200,000

**1%0,000

50,000

=+0,000>

BitC, Barc and Bart are partners sharing pro!ts in the ratio of 56+62, respectively. 7s

of 4ecem&er +1, 2009, their capital &alances were P95,000 for BitC, P%0,000 forBarc , and P#0,000 for Bart. ;n Danuary 1, 2010, the partners admitted Eince as a

new partner and according to their agreement, Eince will contri&ute P%0,000 in cash

to the partnership and also pay P10,000 for 15 of Barc's share. Eince will &e given

a 20 share in pro!ts, while the original partners' share will &e proportionately the

same as &efore. 7fter the admission of Eince, the total capital will &e P++0,000 and

Eince's capital will &e P0,000.

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)The total amount of goodwill to the old partners , upon the admission of Eince

would &e 6

,000

*15,000

22,000

+,000

)The &alance of Barc's capital,after the admission of Eince would &e6

2,#00

,#00

*9,100

%1,100

The following condensed &alance sheet is presented for the partnership of 7lfa and

Eeda, who share pro!ts and losses in the ratio of #060, respectively6

@ash..................5,000

;ther assets...#25,000

Eeda, loan.........+0,000

T;T7F<<<<<<<<<<<<00,000

accounts paya&le ........120,000

7lfa, capital...................+%,000

Eeda, capital.................2+2,000

T;T7F<<<<<<<<<<<<<<<<<<<<<<<<<00,000

)The assets and lia&ilities are fairly valued on the &alance sheet. 7lfa and 3eds

decide to admit @app as a new partner with a 20 interest. Go goodwill or &onus is

to &e recorded. What amount should @all contri&ute in cash or other assets(

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110,000

11#,000

10,000

**15,000

)nstead of admitting a new partner, 7lfa and Eeda decide to li"uidate the

partnership. f the other assets are sold for P500,000, what amount of the availa&le

@7's should &e distri&uted to 7lfa(

255,000

**2+,000

+2,000

+%,000

G, H and I are partners sharing pro!ts and losses in the ratio 6+6+, respectively.

The condensed &alance sheet of GHI Partnership as of 4ecem&er +1, 200# is6

@ash....................50,000

;ther assets.....1+0,000

T;T7F<<<<<<<<<<<<<<1%0,000

Fia&ilities............0,000

G capital.............#0,000

H capital.............0,000

I capital.............0,000

T;T7F<<<<<<<<<<<<<1%0,000

)7ll the partners agree to admit J as a 1$5 partner in the partnership without any

goodwill or &onus. J shall contri&ute assets amounting to

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2%,000

10,000

*+5,000

#0,000

)The GHI Partnership is dissolved and li"uidated &y installments. The !rst

realiCation of P0,000 cash is on the sale of other assets with &ooA value of

P%0,000. 7fter payment of the lia&ilities, the cash availa&le is distri&uted to G, H and

I respectively as follows6

+#,000))2,000))2,000

,000))2%,000))2%,000

1#,000))12,000))12,000

**2,000))1+,000))1+,000

The following condensed &alance sheet is presented for the partnership of ?mith

and Dones, who share pro!ts and losses in the ratio of #060, respectively.

;ther assets...............50,000

?mith loan....................20,000

T;T7F<<<<<<<<<<<<<<<<<<<<<<<0,000

accounts paya&le..... 120,000

?mith capital............. 195,000

Dones capital............ 155,000

T;T7F<<<<<<<<<<<<<<<<<<<<< 0,000

The partners decided to li"uidate the partnership. f the other assets are sold for

P+%5,000.

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)What amount of the availa&le cash should &e distri&uted to 888(

?mith 1+#,000

Dones 129,000

15#,000

159,000

195,000

Partner Borgan is personally insolvent, owing P#00,00. Personal assets will only

&ring P200,000 when li"uidated. 7t the same time, Borgan has a credit capital

&alance in the partnership of P120,000. The capital amounts of the other partners

total a credit &alance of P250,000. Knder the doctrine of marshalling of assets, how

much the personal creditors of Borgan can collect(

120,000

200,000

*+20,000

50,000

7s of 4ecem&er +1, the &ooAs of 7B partnership showed a capital &alances of6 7<

P0,000: B<P25,000 and <5,000. The partner's pro!t and loss ratio was +6261,

respectively. The partners decided to dissolve and li"uidate. They sold all the

noncash assets for P+,000 cash. 7fter settlement of all lia&ilities amounting to

P12,000, they still have P2%,000 cash left for distri&ution.

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)The loss on the realiCation of the noncash assets was

0,000

*2,000

,000

5,000

)7ssuming that any partner's capital &alance is uncollecti&le, the share of 7 in the

P2%,000 cash for distri&ution would &e

19,000

1%,000

*1,%00

0,000

n Bay 2010, melda, a partner of an accounting !rm, decided to withdraw when the

partners' capital &alances were6 BiAee, P#00,000: Raul, P#00,000: and meldaP00,000. t was agreed that melda is to taAe the partnership's fully depreciated

computer with a second hand value of P2,000 that cost the partnership P+#,000. f

pro!ts ad losses are shared e"ually, what would &e the capital &alance of 888 after

the retirement of melda(

BiAe*#0%,000))592,000))#00,000))#12,000

Raul*#0%,000))same

Bac and Dolly, in a Loint venture , contri&uted P150,000 each in order to purchase

canned goods which are sold &y lots at a Mclosing<outM sale. They agreed to divide

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their pro!ts e"ually and each shall record his purchases, sales, and epenses in his

own &ooAs. 7fter selling almost all of the canned goods: they wind up their venture.

The following data relate to the venture transactions6

<<Doint venture credit &alance of Bac was P120,000 and Dolly was P105,000

<< penses paid from the Loint venture cash was P15,000 &y Bac and P19,500 &y

Dolly

<< @ost of unsold canned goods, which Bac and Dolly agreed to assume were P,500

and P,000, respectively.

) What was the total sales of the Loint venture(

*559,500

5+#,500

525,000

++,500

) What was the Loint venture gain or loss(

202,000

21+,500

22,000

*2+#,500

)n the !nal settlement, what was the total amount due to Barc including his

investment(

25#,500

25%,000

2#+,50

*2#%,250

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t is the contractually agreed sharing of control over an economic activity, and

eists only when the strategic !nancial and operating decisions relating to the

activity re"uire the unanimous consent of the parties sharing control.

@ontrol

* Doint control

?igni!cant nNuence

@ontrolling interest

t is a party to a Loint venture and does not have Loint control over that Loint venture

Eenturer

* nvestor in a Loint venture

nvestor with a power to govern the !nancial and operating policies

Gone of these

;n ;cto&er 1, 2010, 7, 3 and @ entered into a Loint venture &usiness. They were to

marAet a special alarm device. The venture pro!ts and losses were to &e shared into

56+62 ratio, respectively. ;n 4ecem&er +1, 2010 while the Loint venture is still

uncompleted, the three participants decided to recogniCe the pro!ts or losses for

three months period. The inventory is listed at 25 a&ove cost at P50,000. The Loint

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venture account has a de&it &alance of P2,000. Go separate &ooAs are maintained

for the Loint venture.

)What was the Loint venture pro!ts =losses> for the three months period(

*1#,000

2#,000

=2,000>

1+,5000

)What were the shares of 7, 3, and @ in the pro!ts =losses>(

7.,..3...@

=12,000> )=200>)=,%00>

**%,000),%00)+,200

1+,000),%00)5,200

#,50),050)2,00

The following were found in your eamination of the interplant accounts &etween

the ome ;Oce and the 3utuan 3ranch6

1. Transfer of !ed assets from ome ;Oce amounting to P5+,9#0 was not &ooAed

&y the &ranch

2. P10,000 covering marAeting epense of another &ranch was charged &y ome

;Oce to 3utuan.

+. 3utuan recorded a de&it note on inventory transfers from ome ;Oce of P5,000

twice.

. ome ;Oce recorded cash transfer of P#5,00 from 3utuan 3ranch as coming

from 4avao 3ranch

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5. 3utuan reversed a previous de&it memo from @agayan de ;ro 3ranch amounting

to P10,500. ome ;Oce decided that this charge is appropriately 4avao 3ranch's

cost.

#. 3utuan recorded a de&it memo from ome ;Oce of P,#50 as P5#0

) The net adLustment in the home oOce &ooAs related to the 3utuan 3ranch @urrent

account is6

*5,00

#5,00

%#,200

9,%20

)The net adLustment in 3utuan's &ooAs related to the ome ;Oce account is6

++,++5

+1,50

*20,950

10,50

)3efore the a&ove discrepancies were given eect,the &alance in the home oOce

&ooAs of its 3utuan 3ranch @urrent account was de&it &alance of P1#5,920. The

unadLusted &alance in the 3utuan 3ranch &ooAs of its ome ;Oce @urrent accounts

must &e6

92,++#

9%,2+0

10,500

*111,10

)The adLusted &alance of the reciprocal accounts is6

%,%0

*90,220

99,200

109,120

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7t the end of 200%, the &ranch reported an inventory of P15,#25. The home oOce

&ills this &ranch at 125 of cost. 4uring 2009, goods costing P+00,000 were

shipped to the &ranch. The account Mallowance for overvaluation of &ranch

inventoryM after adLustment, shows a &alance of P1#,250 at the end of the year.

)What was the amount of inventory at Danuary 1, 2009 at cost(

*12,500

15,#25

19,5+1

2%,125

)What was the amount of ending inventory at &illed price(

+09,+5

2,500

*%1,250

#5,000

)What was the amount of allowance for overvaluation &efore adLustments(

#1,%5

***%,125

20,+12

20,000

)What was the amount of ending inventory at cost(

*#5,000

%1,250

#1,%5

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15,#25

Gew ra @orp. &ills its newly esta&lished &ranch for merchandise at 10 of cost. 7t

the end of its !rst month, the &ranch reported, among other things, the following6

Berchandise from ome ;Oce =at &illed price>...................................2%,000

Berchandise purchased locally &y &ranch...........................10,000

nventory, ?eptem&er +0, of which P2,000 are of local purchases...9,000

Get sales for month.................................+,500

)The &ranch inventory at cost should &e recorded at

+%,000

*,000

9,000

Gone of the a&ove

)The gross pro!t of the &ranch in so far as the ome ;Oce is concerned was

22,500

1,500

22,90

*20,500

t is the entity that has the controlling !nancial interests

nvestor

*parent

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7ssociate

7Oliate

Poe, nc. ac"uired 100 of ?haw @o. in a &usiness com&ination on ?eptem&er +0,

2009. 4uring 2009, Poet declared "uarterly dividends of P25,000 and ?haw declared

"uarterly dividends of P10,000. Knder the purchase method of accounting for the

&usiness com&ination, what amount should &e reported as dividends declared in the

4ecem&er +1, 2009 consolidated statement of retained earnings(

*100,000

105,000

1+0,000

10,000

Red @orp. has a 90 interest in White @o.: while the latter has an %0 interest in

?ol @orp. -or the year ended 4ecem&er +1, 2009, the net income from own

operations of these three companies were6 Red P1,000,000 : White P500,000 : and

?ol P250,000. What is the amount of minority interest =Goncontrolling interest> in

net income for 2009(

120,000

100,000

*0,000

50,000

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