Sharmaine M.

Sipalay BSA -1 MWF 1:30-3:30

MULTIPLE CHOICES-COMPUTATIONAL

ANSWERS

1. A. P55,000
Jose’s capital should be credited for the market value of the computer contributed by him.

2. B. P60,000
Solution:
(40,000+80,000) ÷ 2/3 = 180,000 x 1/3 = P60,000

3. A. P350,000
Solution:
Cash P 100,000
Land 300,000
Mortgage payable (50,000)

Net assets (Julio , capital) P 350,000

4. B. P80,000
Solution:

Total Capital (300,000/60%) P 500,000

Perla’s interest 40%

Perla’s capital P 200,000

Less: Non-cash asset contributed at market value
Land P 70,000
Building 90,000
Mortgage payable ( 40,000 ) 120,000
Cash contribution P 80,000

5. D. zero
Reason: Under the bonus method, a transfer of capital is only required.

6. B. Reyes - P350,000, Santos – P750,000

Solution:
Reyes Santos
Cash P200,000 P300,000
Inventory - 150,000
Building - 400,000
Equipment 150,000
Mortgage payable ( 100,000)

Net asset (capital) P350,000 P750,000

 Formation # 2

1. A. P32,950 and P248,850 respectively

Solution:
Cash to be invested by Mendez:
Adjusted capital of Lopez (2/3)
Unadjusted capital P158,400
Adjustments:
Prepaid expenses 17,500
Accrued expenses ( 5,000 )
Allowance for bad debts (5% x P100,000 ) ( 5,000 )

Adjusted capital P165,900

Total partnership capital ( P 165,900 ÷ 2/3 ) P248,850

Multiply by Mendez’s interest 1/3%

Mendez’s capital P 82,950

Less Merchandise contributed 50,000

Cash to be invested by Mendez P 32,950

Total Capital:

Adjusted capital of Lopez P165,900

Contributed Capital of Mendez 82,950

Total Capital P 248,850

2. D. P77,500
Solution:

Moran, capital (40%)

Cash P 15,000
Furniture and Fixtures _100,000
P115,000
Divide by Moran's P & L share
percentage ______40%
Total partnership capital P287,500
Multiply by Nakar's P & L share
percentage ______60%
Required capital of credit of Nakar:
P172,500
Contributed capital of Nakar:
Merchandise inventory P 45,000
Land 15,000
Building __65,000
Total assets P125,000
Less Liabilities __30,000 P 95,000
Required cash investment by Nakar P
77,500
Moran, capital ( 40% )
Cash P 15,000
Furnitures and Fixtures 100,000 P 115,000
Divide by Moran’s P and L share percentage 40%

Total partnership capital P 287,500

Multiply by Nakar’s P & L share percentage 60%

Cash P 15,000
Furniture and Fixtures _100,000
P115,000
Divide by Moran's P & L share
percentage ______40%
Total partnership capital P287,500
Multiply by Nakar's P & L share
percentage ______60%
Required capital of credit of Nakar:
P172,500
Contributed capital of Nakar:
Merchandise inventory P 45,000
Land 15,000
Building __65,000
Total assets P125,000
Less Liabilities __30,000 P 95,000
Required cash investment by Nakar P
77,500
Required capital of credit of Nakar: P 172,500
Contributed capital of Nakar:
Merchandise inventory P 45,000
Land 15,000
Building 65,000
 Total assets P 125,000
Less Liabilities 30,000 P 95,000
Required cash investment by Nakar P 77,500

3. C. P17,250
Solution:

Garcia, Capital
Unadjusted balance P 49,500
Adjustments:
Accumulated depreciation ( 4,500 )
Allowance for doubtful accounts ( 4,500 )

Adjusted balance P 40,500

Flores, capital:

Unadjusted balance P 57,000

Adjustments:

Accumulated depreciation ( 1,500 )

Allowance for doubtful accounts ( 12,000 )

Adjusted balance P 43,500

Garcia’s adjusted capital P 40, 500

Divide by Garcia’s P & L percentage 40%

Total partnership capital P 101,250

Flores’ P & L share percentage 60%

Flores’ capital credit P 60,750

Flores contributed capital 43,500

Additional cash to be invested by Flores P 17,250

4. D. P59, 375

Ortiz Ponce Total

( 60 % ) ( 40 % )
Unadjusted capital balances P 133,000 P 108,000 P241,000
Adjustments:
Allowance for bad debts ( 2,700 ) ( 1,800 ) ( 4, 500)
Inventories 3,000 2,000 5,000
Accrued expenses ( 2,400 ) ( 1,600 ) ( 4,000 )

Adjusted capital balances P 130,900 P 106,000 P237,500

Total capital before the formation of the new partnership P 237, 500
Divide by the total percentage share of Ortiz and Ponce ( 50% + 30%) 80%
 Total capital pf the partnership before he admission of Roxas P 296,875
Multiply by Roxas Interest 20%

Cash to be invested by Roxas P 59, 375

FORMATION NO. 3

5. D. P 90,000 and P48,000 respectively.

Merchandise to be invested by Gomez:
Total partnership capital ( 180,000 / 60% ) P 300,000

Gomez’s capital ( 300,000 x 40% ) P 120,000

Less Cash investments 30,000

Merchandise to be invested by Gomez P 90,000

Cash to be invested by Jocson:

Adjusted capital of Jocson:
Total assets ( at agreed valuations ) P 180,000
Less Accounts payable 48,000 P 132,000
Required capital of Jocson 180,000

Cash to be invested by Jocson P 48,000

6. B. P65,000
Solution:

Unadjusted Ell, Capital ( P 75,000 – P 5,000) P 70,000

Allowance for doubtful accounts ( 1,000 )
Accounts payable ( 4,000 )

Adjusted Ell, capital P 65,000

7. C. P211,200
Solution:

Total partnership capital ( P113,640 ÷ 1/3 ) P 340,920

Less David’s capital 113,640

Cortez’s capital after adjustments P 227,280

Adjustments made:
Allowance for doubtful account ( 2% x P 96,000 ) 1,920
Merchandise inventory ( 16,000)
Prepaid expenses ( 5,200)
Accrued expenses 3,200

Cortez’s capital before adjustments P 211,200

8. A. P3,500,000
Solution:
 Total assets at fair value P 4,625,000
Liabilities ( 1,125,000)
Capital balance of Flora P 3,500,000

9. C. P 668,000

Solution:

Total capital of the partnership

(P3,500,000 ÷ 70%) P5,000,000
Eden agreed profit & loss ratio
30%
Eden agreed capital 1,500,000
Eden contributed capital at fair value
812,000
Allocated cash to be invested by Eden P
688,000
Total capital of the partnership
(P3,500,000 ÷ 70%) P5,000,000
Eden agreed profit & loss ratio
30%
Eden agreed capital 1,500,000
Eden contributed capital at fair value
812,000
Allocated cash to be invested by Eden P
688,000
Total capital of the partnership (P3,500,000 ÷ 70%) P5,000,000
Eden agreed profit & loss ratio 30%
Eden agreed capital 1,500,000
Eden contributed capital at fair value 812,000
Allocated cash to be invested by Eden P 688,000

10. C. From Sam to Tim , P3,600 and from Sam to Rey, P88,200.

Solution:

Rey Sam Tim Total

Contributed capital (assets-liabilities) P471,000 P291,000 P195,000 P957,000

Agreed capital (profit and loss ratio) 382,800 382,800 191,400 957,000
Capital transfer (Bonus) P 88,200 P(91,800) P 3,600 -

11. Withdrawal P 15,000

Solution:

Total agreed capital (P90,000 ÷ 40%) P225,000

Contributed capital of Candy (P126,000+P36,000-P12,000) 150,000
Total agreed capital (P90,000 ÷ 40%) 225,000Candy, agreed capital interest 60%
Agreed capital of Candy 135,000
Contributed capital of Candy 150,000
Withdrawal P 15,000