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AC1 Reviewer Sample Questions

The document contains 10 multiple choice questions that test knowledge of partnership accounting concepts. The questions cover topics such as distributing partnership profits and losses according to capital contribution ratios, components of the profit distribution formula, treatment of partner withdrawals, revaluation of partnership assets, admitting new partners, and dissolution of partnerships.

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34 views

AC1 Reviewer Sample Questions

The document contains 10 multiple choice questions that test knowledge of partnership accounting concepts. The questions cover topics such as distributing partnership profits and losses according to capital contribution ratios, components of the profit distribution formula, treatment of partner withdrawals, revaluation of partnership assets, admitting new partners, and dissolution of partnerships.

Uploaded by

Via Embien
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Quiz 1 Midterm

1. Salvador, Gabao, and Valdez formed a partnership. Their cash contributions are as follows: Salvador,
P200,000; Gabao, P250,000, and Valdez, P150,000. The partners agreed that the profit or loss will be
distributed based on the ratio of capital invested. If the partnership reported a profit of P180,000 for its
first year of operations, what amount should be credited to Gabao and Valdez' capital account?

2. Velasquez and Chua decided to form a partnership for their newly established catering business with
capital contributions of P1,200,000 and P800,000, respectively. Their partnership agreement calls for
Velasquez to receive P60,000 per year in salary. Also, each partner is to receive an interest allowance
equal to 10% of the partner's beginning capital contributions, with any remaining profit or loss divided
2:3. If profit for its initial year is P460,000, then Velasquez and Chua's respective shares are:

3. At the beginning the year, the balance sheet of CBA Company showed the following balances in the
partners' capital accounts: Tobita, 120,000 and Del Rosario, 180,000. Tobita and Del Rosario share
profits and losses in a 4:3 ratio. During 2022, CBA experienced a P40,000 profit Tobita withdrew
P18,000. What will be the balance in Tobita’s capital on December 31, 2022, assuming the CBA company
uses its capital account to record the share in income and loss?

4. Magueflor and Tan have respective partnership capital balances of 75,000 and 90,000 on January 1.
Magueflor withdrew 15,000 on May 20, 5,000 on July 27 and additional investment of 25,000 on
October 5. Tan invested an additional 10,000 on February 28, 12,000 on June 1 and withdrew 22,000 on
November 1. The average capital balance of Magueflor and Tan for the year are:

5. Carlo Berly Ernesto

Beginning Capital 250,000 500,000 400,000

The partnership agreement of CBE Company provided the following terms on sharing of profit and
losses:

✓Interest of 10% shall be paid based on partners’ beginning capital.

✓Carlo is to receive bonus of 5% of the profit up to 1,000,000 and 2% on the amount of excess.

✓Berly and Ernesto are to receive a salary of 30,000 every quarter.

✓The balance is to be divided 2:3:5


For the year ended, the partnership has total sales of 10,000,000 and total expenses of 2,250,000. The
partners' shares should be:

6. Which of the following is not considered a legitimate expense of a partnership?

✓ Interest paid to partners based on the amount of their invested capital

7. Closing entries of a partnership include entries to

✓ Close income and expense accounts to the income summary account; and then close the profits or
losses to the drawing accounts.

8. According to the Philippine Civil Code, in the absence of an agreement, profit and loss are divided by
partners in the ratio of:

✓ Capital contributions

9.Which of the following is not a component of the formula used to distribute partnership profits to the
partners?

✓Interest on notes to partners.

10. Periodic withdrawals by partners are best viewed as

✓Distribution of partnership assets to the partners.

Quiz 2 Midterm

Shalala Partnership is a law firm formed under GPP by Atty. Princess Cabrera, Atty. Alyssa Chua, and
Atty. Liezl Del Rosario who share profit and losses 3:3:4. Atty. Vince Velasquez has been asked to join the
partnership. Prior to admitting Velasquez, the assets of Shalala Partnership were revalued to reflect their
current market values. The revaluation resulted in machinery being decreased by 60,000 and equipment
being increased to 120,000 from 80,000. Prior to revaluation, the equity balances for Cabrera, Chua and
Del Rosario were 350,000 and 400,000, and 200,000 respectively.

REQUIREMENTS:

CASE 1: Velasquez invested 200,000 for a 30% interest in the partnership.

Capital Balance after Dissolution: Cabrera


New Interest Ratio (use percentage): Chua

What is the amount of bonus to old/new partner?

CASE 2: Velasquez invested 120,000 for a 10% interest in the partnership.

Capital Balance after Dissolution: Cabrera

New Interest Ratio (use percentage): Chua

What is the amount of bonus to old/new partner?

CASE 3: Velasquez paid the partners 300,000 for a 15% interest in the partnership.

Capital Balance after Dissolution: Cabrera

New Interest Ratio (use percentage): Chua

What is the amount of bonus to old/new partner?

Assume that CASE NO. 3 represents the partners' new capital balances.

Because of long hours of work Cabrera and Velasquez become close that develops into a romantic
relationship, but due to misunderstanding they eventually call it quits. Cabrera unable to work at peace
with Velasquez, decided to leave the partnership receiving a payment of 400,000 in full settlement of
her interest in the partnership. Assume the partnership earned 100,000 in net income after one year of
operation.

QUESTIONS

If Cabrera sold her interest to the partnership, what is the amount of partnership capital after the
withdrawal of Cabrera.

If Cabrera sold her interest to Del Rosario, what is the amount of partnership capital after the
withdrawal of Cabrera.

If Cabrera sold her interest to an outsider, what is the amount of partnership capital after the
withdrawal of Cabrera.

Prelim Exam

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