PART 2 – COMPREHENSION.
1. Rose and Jim started a partnership. Rose contributed a building that she purchased 10 years ago for P100,000. The
accumulated depreciation o the building on the date of formation of the partnership is P25,000 and the fair value is
P110,000. For what amount will Rose’s capital account be credited on the book of the partnership?
2. On October 1, Joyce and Russel formed a partnership, agreeing to share profits and losses in the ratio of 2:3 respectively.
Joyce contributed a parcel of land that cost P50,000. Russel contributed P100,000 cash. The land was sold for P80,000 on
October 1, three hours after formation of the partnership. How much should be recorded in Joyce’s capital account on
formation of the partnership?
3. On September 30, Paolo, Mark and Nathaniel formed a partnership by combining their separate business proprietorships.
Paolo contributed cash of P75,000. Mark contributed property with a P54,000 carrying amount, P60,000 original cost and
P120,000 fair value. The partnership assumed the P52,500 attached to the property. Nathaniel contributed equipment with
a P45,000 carrying amount, P112,500 original cost and P82,500 fair value. The partnership agreement specified that
profits and losses are to be shared equally. Which partner has the largest September 30 capital account balances?
4. On October 1, Nika and Leizel formed a partnership and agreed to share profits and losses in the ratio of 4:6, respectively.
Nika contributed a parcel of land that cost P100,000. Leizel contributed P400,000 cash. The land was sold for P180,000 on
October 1, immediately after formation of the partnership. How much cash should Nika need to invest for her to have a
capital interest same with her profit and loss ratio?
5. Jade invested in a partnership a parcel of land which cost his father P300,000. The land had a market value of P450,000
when Jade inherited it three years ago. Currently, the land is independently appraised at P750,000 even though Jade
insisted that he “wouldn’t take P1,350,000 for it”. The land should be recorded in the accounts of the partnership at
____.
6. On September 30, Cristelle, Joy and Ronamae formed a partnership by combining their separate business proprietorships.
Cristelle contributed cash of P500,000. Joy contributed property with a carrying amount of P360,000, original cost of
P400,000 and fair value of P800,000. The partnership accepted responsibility for the P350,000 mortgage attached to the
property.
Ronamae contributed equipment with a carrying amount of P300,000, original cost of P750,000 and fair value of P550,000.
The partnership agreement specifies that the profits and losses are to be shared equally but is silent regarding capital
contributions. Which partner has the largest September 30 capital account balance?
7. Cayla, Ruth and Carla are forming a new partnership each contributing cash of P200,000 and their respective non-cash
assets valued at P100,000, P200,000 and P300,000, respectively. Cayla’s non-cash contribution is her own developed
software valued at cost which she could sell for trice the amount. Partners agree to admit her software at market value and
they will share profits equally. For what amount will Cayla’s capital account be credited on the book of the
partnership?
FOR NUMBERS 18 TO 20:
Yvonne, Iralhene and Ara are new CPAs and are to form an accounting partnership. Yvonne is to contribute cash of
P75,000 and her computer originally bought at P80,000 but has a second-hand value of P50,000. Iralhene is to contribute
cash of P100,000 and tables and chairs worth P20,000 but acquired by Iralhene for only P18,000. Ara, whose family is
selling computers, is to contribute cash of P40,000 and a brand-new computer plus printer with regular price at 80,000
which cost their family’s computer dealership P70,000. Partners agree to share profits 3:2:3. The capital balances of
Yvonne, Iralhene and Ara, respectively upon formation are: _________; _________; __________
PART 3 – APPLICATION. Analyze each independent question and answer it by applying the rules on the distribution of
partnership profits/losses.
FOR NUMBERS 21 TO 22:
The partnership agreement of Mayer and Piolo provides the interest at 10% per year is to be credited to each partner on
the basis of their average capital balances. A summary of Mayer’s and Piolo’s capital account for the year ended
December 31, 2024 follows: MAYER PIOLO
Balance, January 1 P420,000 Jan. 1 P500,000
Additional investment, July 1 120,000 Apr. 1 80,000
Withdrawal, August 1 ( 45,000) Sep. 1 ( 30,000)
Balance, December 31 495,000 Dec. 31 550,000
What amount of interest should be credited to Mayer and Piolo’s capital account for 2024?
FOR NUMBER 23:
Leslie and Jamaica are partners who shares profits and losses in the ratio of 60:40, respectively. Leslie’s salary is P60,000
and P30,000 for Jamaica. The partners are also paid interest on their average capital balances. In 2018, Leslie received
P30,000 of interest and Jamaica, P12,000. The profit and loss allocation is determined after deductions for the salary and
interest payments. If Jamaica’s share in the residual profit (Profit after deducting salaries and interest) was P60,000 in
2018, what was the total partnership profit?
FOR NUMBERS 24 TO 26:
In its first year of operations, the partnership of Darren, Vladimir and Marvin made a profit of P20,000, before providing for
salaries of P5,000 and P3,000 per annum for Darren and Vladimir, respectively. The capital contributions of the partners
are as follows: Darren, P30,000; Vladimir, P20,000 and Marvin, P10,000. Assuming that no profit and loss ratio are
provided in the partnership agreement and that there has been no change in the capital contributions during the year, how
much profit share will be received by Darren, Vladimir and Marvin?
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FOR NUMBER 27:
If a partnership has a profit of P44,000 and Eunice is to be allocated a bonus of 10% of profit after the bonus, Eunice’s
bonus would be:
FOR NUMBERS 28 TO 29:
Keiven and Eixon partnership have the following profit and loss agreement: salaries of P30,000 and P45,000 for Keiven
and Eixon, respectively; a bonus to Keiven of 10% of profit after salaries and bonus; interest of 10% on average capital
balance of P20,000 and P35,000 for Keivena and Eixon, respectively. One-third of any remaining profits is allocated to
Keiven and the balance to Eixon. If the partnership had profit of P102,500, how much should be allocated to Keiven and
Eixon, respectively?
FOR NUMBER 30:
Ella is trying to decide whether to accept a salary of P40,000 or a salary of P25,000 plus a bonus of 10% of profit after the
bonus as a way of dividing the profits among the partners. What amount of profit would make the choices equal?
FOR NUMBERS 31 TO 33:
Angelika, Aprilyn and Ericah are partners with average capital balance during the year of P120,000, P60,000 and P40,000,
respectively. Partners receive 10% interest on their average capital balances. After deducting salaries of P30,000 to
Angelika and P20,000 to Aprilyn, the residual profit or loss is divided equally. If the partnership earned P105,000, how
much would be allocated to Angelika, Aprilyn and Ericah, respectively?
FOR NUMBERS 34 TO 36:
Remiah, Melyn and Mary Jane are partners with average capital balances during 2024 of P360,000, P180,000 and
P120,000, respectively. Partners receive 10% interest on their average capital balances. After deducting salaries of
P90,000 to Remiah and P60,000 to Mary Jane, the residual profit or loss is divided equally. In 20 24, the firm sustained a
P99,000 loss before interest and salaries to partners. Given the following information, how much profit was allocated
to Remiah, Melyn and Mary Jane?
FOR NUMBERS 37 TO 39:
Lexter, Justine and Xyron are partners in the accounting firm. Their ending capital account balances were: Lexter, P90,000;
Justine, P110,000 and Xyron, P50,000. They share profits and losses in a 4:4:2 ratio, after the following special terms:
Xyron is to receive a bonus of 10% of profit after bonus
Interest of 10% shall be paid on that portion of the partner’s capital in excess of P100,000.
Salaries of P10,000 and P12,000 shall be paid to Lexter and Xyron, respectively
Assuming profits of P44,000 in 2016, the total profit share of Lexter, Justine and Xyron, respectively would be:
FOR NUMBER 40:
Ella had a beginning capital balance of P35,000 and made an additional investment of P27,000 during the year. In the
same year, Ella made drawings of P5,000 per month. The post-closing capital balance of Ella is P72,000.What is her
share in the partnership profit?
ANSWER SHEET
Name: _________________________________________ Score: ____________
THEORIES PARTNERSHIP FORMATION PARTNERSHIP OPERATION
1
1 ROSE, CAPITAL = P__________________ 21 MAYER’S INTEREST = P____________ 31 ANGELIKA = P_____________
1
1
2 JOYCE, CAPITAL = P_________________ 22 PIOLO’S INTEREST = P_____________ 32 APRILYN = P______________
2
1
3 WHICH PARTNER? __________________ 23 PARTNERSHIP PROFIT = P_________ 33 ERICAH = P_______________
3
1
4 CASH = P____________________ 24 DARREN = P___________________ 34 REMIAH = P_______________
4
1
5 LAND = P____________________ 25 VLADIMIR = P__________________ 35 MELYN = P________________
5
1
6 WHICH PARTNER? __________________ 26 MARVIN = P____________________ 36 MARY JANE = P___________
6
1
7 CAYLA, CAPITAL = P_________________ 27 EUNICE, BONUS = P______________ 37 LEXTER = P_______________
7
1
8 YVONNE, CAPITAL = P________________ 28 KEIVEN = P________________ 38 JUSTINE = P______________
8
1
9 IRALHENE, CAPITAL = P______________ 29 EIXON = P_________________ 39 XYRON = P_______________
9
2
10 ARA, CAPITAL = P___________________ 30 PROFIT = P________________ 40 ELLA = P_________________
0
Course/Year & Section: __________________________ Date: ______________
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