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Partnership Operations Quiz

The document outlines various partnership scenarios involving profit sharing, capital accounts, and losses among partners. It includes calculations for net income allocations, capital account changes, and profit shares based on specified agreements. Each section presents a different partnership case with corresponding financial figures and answers.

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5 views

Partnership Operations Quiz

The document outlines various partnership scenarios involving profit sharing, capital accounts, and losses among partners. It includes calculations for net income allocations, capital account changes, and profit shares based on specified agreements. Each section presents a different partnership case with corresponding financial figures and answers.

Uploaded by

canlasj791
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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PROBLEM SOLVING

A1. Bee, Cee and Dee, accountants, agree to form a partnership and to share profits in the ratio
of 5:3:2. They also agreed that Dee is to be allowed a salary of P 28,000 and that Cee is to be
guaranteed P 21,000 as his share of the profits. During the first year of operation, service revenue
are P 180,000, while expenses total P 96,000. What amount of net income should be credited to
Bee's capital account? Answer: P25,000
A2. What amount of net income should be credited to Cee's capital account?
Answer: P21,000
A3. What amount of net income should be credited to Dee's capital account?
Answer: P38,000

B1. Jag, Lee and Levis are partners with average capital balances during 2019 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 Jag and P60,000 to Levis, the residual profit or
loss is divided equally. In 2019. the partnership sustained a P99,000 loss before interest and
salaries to partners. By what amount should Jag's capital account change? Place a parenthesis ( if
your answer is decrease, if increase just type the amount., with no other special characters.
Answer: P21,000
B2. By what amount should Lee's capital account change?
Answer: (P87,000)
B3. By what amount should Levis' capital account change?
Answer: (P33,000)

C. Red, Orange and Yellow formed a partnership on June 1, 2019. Red is an industrial partner
while Orange and Yellow are capitalist partners with cash contribution of P 80,000 and
P120,000, respectively. They share profits in the ratio of 2:5:3 to Red, Orange and yellow,
respectively. If operations for 2019 resulted to a loss of P 140,000, how much is the share of
Yellow?
Answer: (P52,500) / P52,500

D1. On January 1, 2019, Tik and Tok have capital balances of P 50,000 and P100,000. Partner
Tik made monthly withdrawals of P 1,000 while Tok made monthly withdrawals of P 1,500.
Partners profit and loss agreement were as follows: 1) Annual salaries of P 60,000 for Tik and P
40,000 for Tok; 2) 10% interest on beginning capital; 3) Remainder are shared equally. If the
partnership capital at the end of the year is P225,000, the partnership operations for the year
resulted to ____. Place a parenthesis () if your answer is net loss, if profit just type the amount,
with no other special characters.
Answer: P105,000
D2. Capital balance of Tik at the end of the year is
Answer: P98,000
D3. Capital balance of Tok at the end of the year is
Answer: P127,000

E1. Bench, a partner in the ABC Partnership, has a 30% participation in partnership profits and
losses. Bench's capital account had a net decrease of P 120,000 during the calendar year 2019.
During 2019, Bench withdrew P 260,000 (charged against his capital account) and contributed
property valued at D 50,000 to the partnership. What was the profit of ABC Partnership?
Answer: P300,000
E2. How much is the profit share of Bench?
Answer: P90,000

F. AB Partnership's operation for the year 2022 resulted in a profit of P240,000. Their profit
sharing agreement provided the following;
* Salaries of P5,000 and P15,000 is to be given to A and B respectively;
* 10% of profit after salaries and bonus is to be given to. Partner B;
* The balance is to be divided using the 7:3 ratio, respectively.
How much profit is to be allocated to B?
Answer: P95,000

G. YI is the managing partner of PP Partnership. He is given an incentive of 5% bohus on profit.


The profit of the partnership is P757,250, net of income tax rate of 35%. How much is the bonus
before deduction of bonus and income taxes?
Answer: P58,250
H. B1, B2, B3 are partners with average capital balances during 2021 of P945,000, P477,300 and
P324,700, respectively. The partners received 10% interest on their average capital balances,
salaries of P244,650 to B1 and P165,250 to B3; any residual profit or loss is divided equally. In
2021, the partnership had a net loss of P251,248 before the interest and salaries to partners. What
is the change in the capital balances of B1? Place a parenthesis if your answer is a decrease.
Answer: P60,534
I. During the year, the ABC partnership's operations generated a loss. The partnership agreement
provides for the following P/L sharing provisions:
* Interest of P2,000, P3,000, and P5,000 to partners A, B, and C, respectively
* Salary of P15,000 to partner A
* Any remainder is allocated equally.
If the share of partner A in the loss is P8,000, how much is the net loss for the period?
Answer: (P50,000)

J. A, B and C formed a partnership on June 1, 2019. A is an industrial partner while B and C are
capitalist partners with cash contribution of P 80,000 and P120,000, respectively. They share
profits in the ratio of 2:5:3 to A, B and C, respectively. If operations for 2019 resulted to a loss of
P 140,000, how much is the share of C?
Answer: (P52,500) / P52,500
THEORIES

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