1.

Castello, a partner in BRC Partnership, assigns his partnership interest

to Serrano, who is not made a partner. After the assignment, Serrano
asserts the right to
I. Participate in the management of BRC
II. Castelos’ partnership profit

Serrano is correct as to which of these rights?

a) I only c) I and II
b) II only d) Neither I nor II

2. Jose and Andres are partners with capital balances of ₱30,000 and
₱40,000 and sharing profits and losses 40% and 60%, respectively. If
Alberto is admitted as partner paying ₱20,000 in exchange for 50% of
Jose’s equity. The entry in the partnership books should be as follows

a. Jose, Capital 15,000

Alberto, Capital 15,000
b. Cash 20,000
Alberto, Capital 20,000
c. Cash 20,000
Goodwill 5,000
Alberto, Capital 25,000
d. Cash 20,000
Jose, Capital 5,000
Alberto, Capital 15,000

3. The capital accounts of the partnership of Silang, Pilar and Agudo are
presented below with their respective profit and loss ratio:

Silang ₱ 278,000 (1/2)

Pilar 418,000 (1/3)
Agudo 192,000 (1/6)

Jacinto was admitted to the partnership when he purchased directly, for

₱264,000, a proportionate interest from Silang and Pilar in the net assets and
profits of the partnership. As a result, Jacinto acquired a one-fifth interest in
the net assets and profits of the firm.
 Assuming no assets revaluation is to be recorded, what is the combined
gain realized by Silang and Pilar upon the sale of a portion of their interests in
the partnership to Jacinto?
a. ₱0 c. 124,800
b. 86,400 d. 164,000

4. Lima and Mitra are partners with a profit and loss ratio of 75:25 and
capital balances of ₱100,000 and ₱50,000 respectively. Nova is to be
admitted into the partnership by purchasing a 20% interest in the
capital, profits and losses for ₱60,000. Assuming that no asset
revaluation is to be made, the capital balances of Lima and Mitra after
admission of Nova are
a. Lima ₱ 80,000 and Mitra ₱40,000
b. Lima ₱120,000 and Mitra ₱60,000
c. Lima ₱112,000 and Mitra ₱38,000
d. Lima ₱100,000 and Mitra ₱50,000

5. Using the information in #4 and assuming that asset revaluation is to be

made, the capital balances of Lima, Mitra and Nova are
a. ₱170,000; ₱70,000; ₱60,000
b. ₱800,000; ₱40,000; ₱30,000
c. ₱192,500; ₱77,000; ₱30,000
d. ₱100,000; ₱50,000; ₱60,000

6. Felix contributed ₱24,000 and Elias contributed ₱48,000 to form a

partnership, and they agreed to share profits in the ratio of their original
capital contributions. During the first year of operations, they made a
profit of ₱16,290; Felix withdrew ₱5,050 and Elias, ₱8,000. At the start of
the following year, they agreed to admit Desta into the partnership. He
was to receive a one-fourth interest in the capital and profits upon
payment of ₱30,000 to Felix and Elias, whose capital accounts were to be
reduced by transfers to Desta’s capital account of amounts sufficient to
bring them back to their original capital ratio.

How should the ₱30,000 paid by Desta be divided between Felix and Elias?
a. Felix, ₱9,825; Elias, ₱20,175
b. Felix, ₱15,000; Elias, ₱15,000
c. Felix, ₱10,000; Elias, ₱20,000
d. Felix, ₱9,300; Elias, ₱20,700
7. In the Quirino-Aquino Partnership, Quirino and Aquino had a capital
ratio of 3:1 and a profit and loss ratio 2:1, respectively. The bonus
method was used to record Martial’s admittance as a new partner. What
ratio should be used to allocate, to Quirino and Aquino, the excess of
Martial’s contribution over the amount credited to Martial’s capital
account?

a. Quirino and Aquino’s new relative capital ratio.

b. Quirino and Aquino’s new relative profit and loss ratio.
c. Quirino and Aquino’s old capital ratio.
d. Quirino and Aquino’s old profit and loss ratio.

8. Palma, Antonio and David are partners with capital balances of 100,000,
60,000, and 40,000, respectively. The partners share income and loss
equally. For an investment of 100,000 cash, Baluyot is to be admitted as
a partner with a one-fourth interest in capital and income. Which of the
following can best justify the amount of Baluyot’s investment?

a. Baluyot will receive a bonus from the other partners upon his
admission to the partnership.
b. Assets of the partnership were overvalued immediately prior to
Baluyot’s investment.
c. The book value of the partnership’s net assets was less than their
fair value immediately prior to Baluyot’s investment.
d. Baluyot is apparently bringing goodwill into the partnership, and
his capital account will be credited for the appropriate amount.

9. The partnership of Linsao and Mison provides for equal sharing of profits
and losses. Prior to the admission of a third partner Zamora, the capital
accounts are Linsao, 75,000 and Mison, 105,000. Zamora invests 90,000
for a 75,000 interest and partners agreed that the net assets of the new
partnership would be 270,000.

This admission involves

a. Asset revaluation to old partners of 15,000
b. Bonus to new partners of 15,000
c. Bonus to old partners of 15,000
d. Asset revaluation to new partner of 15,000
1. Using the information in #9, how much is Mison’s capital in the new
partnership?
a. 105,000
b. 110,000
c. 112,500
d. 120,000

1. Voltaire and Asuncion are partners having capital balances of 150,000

and 180,000, respectively and sharing profits and losses equally. They
admit Leonor to a one-third interest in partnership capital and profits for
an investment of 195,000. If the asset revaluation method is used in
recording the admission of Leonor to the partnership

a. Leonor capital will be 175,000

b. Total capital will be 525,000
c. Asuncion capital will be 210,000
d. Asset revaluation will be recorded at 45,000

2. Using the information in #11 and assuming that the bonus approach is
use in recording the admission of Leonor to the partnership

a. Leonor capital will be 195,000

b. Total capital will be 585,000
c. Asuncion capital will be 210,000
d. Voltaire will receive a bonus of 10,000

3. Ordan, Quizon and Dizon are partners with capital balances of 224,000,
260,000 and 116,000 respectively, sharing profits and losses in the ratio
of 3:2:1. Sison is admitted as a new partner bringing with him expertise
and reputation. He is to invest cash for a 25% interest in the assets of
the partnership which includes a credit of 37,500 for bonus upon his
admission. How much cash should Sison contribute?

a. 130,000
b. 150,000
c. 185,000
d. 200,000
14. Julian, Kiamco, and Lapid are partners sharing profits in the ratio of 5:3:2,
respectively. As of December 31, 2010, their capital balances were 95,000 for
Julian, 80,000 for Kiamco, 60,000 for Lapid.

On January 1, 2012, the partners admitted Manalo as a new partner and

according to their agreement; Manalo will contribute 80,000 in cash to the
partnership and also pay 10,000 for 15% of Kiamco’s share. Manalo will be
given a 20% share in profits, while the original partners’ share will be
proportionately the same as before. After the admission of Manalo, the total
capital will be 330,000 and Manalo’s capital will be 70,000. The amount of
asset revaluation is

a. 7,000
b. 15,000
c. 22,000
d. 37,000

15. Using the information in #14 the bonus admission of Manalo would be

a. 6,600
b. 11,000
c. 12,000
d. 22,000

16. Using the information in #14, the balance of Kiamco’s capital, after the
admission of Manalo, would be

a. 72,600
b. 74,600
c. 79,100
d. 81,100

17. On April 30, 2012, the firm Juan, Cosme and Luna presents the following
data from its statement of financial position

Cash 21,000 Accounts Payable 15,000

Other Current Assets 42,000 Mortgage Payable 30,000
Fixed Assets 702,000 Juan, Capital
360,000
Cosme, Capital 225,000
 Luna, Capital
135,000
765,000 765,000

At this time, Magno is admitted to the firm when he purchases a one-sixth

interest in the firm for 82,500. The old partners equalize their capital
investments. Afterwards, all the partners agree to divide profits and losses
equally.

The new firm closes its books on June 30, 2011 reporting profit of 12,600 for
the two months. The partners made the following withdrawals: Juan and Luna,
750 per month; Cosme and Magno, 1,000 per month.

On June 30, 2012, Magno invests enough cash to increase his capital to a one-
fourth interest in the partnership. The June 30, 2012 capital balances of Juan,
Cosme and Luna before the investment of Magno are

a. Juan, 121,250; Cosme, 201,650; Luna, 200,000

b. Juan, 201,650; Cosme, 201,150; Luna, 201,650
c. Juan, 200,000; Cosme, 200,000; Luna, 200,000
d. Juan, 360,000; Cosme, 225,000; Luna, 135,000

18. The cash to be invested by Magno on June 30, 2012 (rounded to the
nearest peso) is

a. 20,000
b. 60,333
c. 80,333
d. 121,150

19. On May 1, 2012, the business accounts of Campos and Centeno appear
below:
ASSETS CAMPOS CENTENO
Cash ₱ 11,000 ₱ 22,354
Accounts Receivable 234,536 567,890
Inventories 123,035 260,102
Land 603,000
Buildings 428,267
Furniture and Fixtures 50,345 34,789
Other Assets 2,000 3,600
 1,020,916 1,317,002

EQUITIES
Accounts Payable 178,940 234,650
Notes Payable 200,000 345,000
Campos, Capital 641,976
Centeno, Capital 728,352
1,020,916 1,317,002

Campos and Centeno agreed to form a partnership contributing their respective

assets and equities subject to the following adjustments:

a. Accounts receivable of 20,000 in Campos’ books and 35,000 in Centeno’s

books are uncollectible
b. Inventories of 5,500 and 6,700 are worthless in Campos’ and Centeno’s
respective books
c. Other assets of 2,000 and 3,600 in Campos’ and Centeno’s respective
books are to be written off.

The capital accounts of the partners after the adjustments will be

Campos Centeno
a. 614,476 683,052
b. 615,942 717,894
c. 640,876 712,345
d. 613,576 683,350

20. Using the information in #19, how much assets does the partnership have?

a. 2,237,918
b. 2,265,118
c. 2,337,918
d. 2,365,218

21. Using the information in #19 and assuming Coronel offered o join for a 20%
interest in the firm, how much cash should he contribute?

a. 324,382
b. 330,870
c. 337,487
d. 344,237