Requirement 1.1 pee vacessary entries to adjust the book of Jacklyn. es Dt cm Allowance for cite Account 4 6 Seed Sous tapitan zone AY Focciyns capita) 3,260 pice fesse ee Gata oe eines cea wie ieee Prepare ncesar eis toast the bok of Kenneth a cot a) kenneth i capital is}900 seer areca : pee [a tnvenvory 50 : aeecaeel DS Paar ee Kenneth, cap ta) Lia geen 109, omer _Acsets me8 Rae ase pilibus payable 35,0i e (On the date of formation, prepare a Statement of Financial Position for Jacklyn and Kenneth’ partnership. ‘and K Builders ‘Statement of Financial Position January 1, 2016 cash 38,560 | drcounts Receivables (net 241,600 Snveniori B4sc0e Eucnitum > Fixture (net) Nooo | Equip: (nee 1255.08 piand 400,000 lotr Agere ee a tora Assets Ald, 09 0. | colanes paycbi. 4s.000, Ubuistie eayabl nb O fibccounts foyabie a Taciiyn, capital 944,500 accel Kenneth, capt) aptal_trabilitics and capital sea (y eile eee meee Hazel operates a successful merchandising busine Cash 60,000.00 ‘Accounts Receivable 120,000.00 ‘Merchandise Inventory 180,000.00 Store furniture (net) 70,000.00 Total Assets 430,000.00 ‘Accounts Payable 195,000.00 ‘Accrued Expenses 15,000.00 Hazel, capital 320,000.00 Total Assets| 430,000.00 with her fiend Angel. Hazel will contribute her business subject tothe following adjustments: accounts must be set up at 2% of the outstanding accounts receivable. ‘Angel contribute to give her a 40% interest in the partnership? (3 points) * = I2S,o¢O gI2,~0°o X F070 aeProblem 3 On January 1, 2016, Aubrey and Barb Feported a profit of P400,000 forthe year ended December 31 wer on the space provided 4 T Profit share | ‘Aubrey barbie, a | ee eel ese a ak eer | ee [ee a [Prone ond toss ata agreed by Arey and Brie NS, ae ¢. Annual salaries of P80,000 and P100,000 i: v a te ee | Annual salaries of P75,000 each, interest of 10% based on thelt 145, 000 {___ orignal capital contribution and the balance shared equal piseeecs ca Requirement 3.2 Compute the capital balan Gi stall T Hb The partner flied to come up wih profiviosaareement 540,007 Profit and fost ratio az agreed by Aubrey and Barbe Ie 60D, 540,000 respectively. L ‘Annual salaries of P80,000 and P100,000 is provided for Aubrey and Barbie, respectively. Balance Is distributed equally. 440,000 ~ | a Anal salaries of 75,000 each. Interest of 10% based onthe’ | coy cy reed original capital contribution and the balance shared equally fn, eee | asey face Seria c) [goo \nee End of Quiz oT [a0 «av “Tare 5) Likewise aii sarbic Tors 000 \ee,000 newer B90v0 (ox, 00 a aula oo00 (0,000 220,000 progit Snowe {4o,000 210,000 400,000 00 satarves 73,000 75/000 i ae 0,00 A) Interest i/s 39,000 ree ES 400,000 400,000 S50 Ga ance ee £0000. 205,000 ae 00) |Adyencise Universizy of che Dhilippines COLLEGE OF BUSINESS DEPARTMENT OF ACCOUNTANCY Principles of Accounting It - Quiz #2 are CE Name Rowell Scone INSTRUCTION. Write your final answer on the space provided. Aveid erasures it will invalidate your answer. Whisper prayer before you start. GOO Oa Problem! 210 o, ‘The partnership agreement of Noe!, Manny, and Cynthia provides that profits are to be divided as follows: Partners are to recelve a 10% interest on their average capital Each partner is to receive an annual salary of P24,000. ‘Noel, the manager, i to receive a bonus equivalent to 10% of the net income after interest and salaries. Remaining profits is to be divided equally among the partners vvvy ‘The movement in the capital ofthe partners Is summarized below: 110,000.01 180,000.01 450,000.00 20,000.00. z 30,000. 50,000.01 20,000.08 5,000.04 20,000.01 50,000,007 20,000.09 10,000.00 10,000.00) 30,000.00 30,000.00, ‘The partnership had a net income of P180,000 for the year just ended. equiremens: 1. Whats the average cpl of Noel? _3eana 2. What is the average capital of Manny? 143,780 ereks 3. What is the average capital of Cynthia? 189,949 aoe ‘4. Prepare a schedule showing the distribution of partnership net income. 1918 [wooo — [miery powers [steep 08s [40 mao | fest gave ree lvwin ted «| goose) “eos 78 4 “*Show supporting computations below: ( powute [Oto ( 190/076 - $2,000 -72,000) 50,400 > ‘i = §eoe6 Prepare Statement of Changes in Partners’ Equity. NMC Partnership Statement of Changes in Partners Equity For the year ended December 31,2001 foc manny nahin Taal Beginning [Beginning Capitay WAT uoeo0 1wo,eve | 150,000 | 44e,000 Adda tewesement UY ce,o00. lio, 0uo 230/000 Drawing Ul 7ic,eco 15,000 20,000) $5000 ending Canital 160,000 225,000 W000 | 435,000 Net income 60,025 O75 =a,b00_ | 180/000 otal FA 220,035 295,175 E 244,800 25900 Problem 2 The partnership of A and Crealzed einen 20000 for yar ended Dezember 31 2015The partners agreed to allow 320% bonus to 8, the managing partner. The partners are provided annual salaries of P100,000 each and 10% interest on ending capital balances. After providing bonus, salaries, and interest, the partners divided residual profits equally. Partners A, 8, and C reported ending balances of P200,000, P150,000, and P175,000, respectively. capital Instruction: Compute the amount of bonus under each ofthe following assumptions. 2 points each) 4. Bonusis based on profit before salaries, interest and bonus. 84,000 2. Bonsis based on prof after bonus but before salaries and itress pg 09 _ ee 3, Bonusis based on profit after salaries and bonts. ‘4. Bonus is based on profit after salaries and interest but before bonus, 5. Bonusis based onproft after slares. Problem 3. Emerald Bry, and Diamond owns Precious Gems Partnership. Their agreement inudes the flowing: > Emerald and Bery! receives a salary of P40,000 and 20,000, respectively. > Emerald and Beryl receives a bonus of 5% of net income after bonus. > Allpartners are to receive a 10% interest on their average | ‘capital balances. The average capital balances are as follows: Emerald, P100,000; Beryl, P90,000; Diamond, P94,000. > Any remaining profits are tobe divided equally among partners Eom1 Determine how profit of 210,000 wil be cated ane the pat \t 2 Ww 0,000. Gens) Problem 4 gthe tolowing: ‘Mel and Jay are partners with capitals of P200,000 and 120,000, ras 8, 10% Interest on their capital balance. bb. Annual salary of P36,000 to Mel ‘& _ Remainder in 60:40 ratio to Mel and Jay partnership income be Tn order for ay to receive P40,000in the remainder of the proft afer saiary and nearest? What would 168,000 God Bess! h Jeu le. 50D ne a 2000 jud 2000 (%00 =2,000 Poi 0,000 4otyo 100,000 108,000Advencise Universizy of che Philippines COLLEGE OF BUSINESS DEPARTMENT OF ACCOUNTANCY Principles of Accounting Il - Unit Test | Many Sunciel Rowell 2 Scone: 2Y/ ( @} INSTRUCTION. — Use permanent ink in writing you final answer onthe space provided bare gach nuriber, Erasure Is strictly nok allowed on fina answer. Support your answer with proper solution. Whisper a prayer before youstan, OS ma 1d has accumulated depreciation of P5,000. Mark contributes equipment to a partnership. The equipment cost 20,000 an try on the __The Equipment has a faic market value of P16,000 on June 20, 2016, the formation of the partnership. The e partnership's books wil include: od 2. a debit to equipment for 20,000 ba debit to equipment for P16,000 € debit to equipment for P14,000 4. _acredit to accumulated depreciation for 6,000. « Justine estributes a heavy equipment originally costing P350,000 toa partnership. On the date of formation, the related ‘price when sold to the matket as second hand is P300,000..The FY = 16,000 —-acCismulated depreciation ls P70,000 but its curvent sellin ‘equipment must be recorded in the partnership book at 350,000 b. 280,000 Fv2 200,000 230,000 4. 300,000 Cnt contoutes» heavy equipment orignal contig F3S0000 toa partnership. On the date of formation, the related > sated cepretions P0000 bs caren seling price when sol tothe market as second hand's 7300,000, The of 50,00 wich the parnershiphas assumed, Wstn's capital must be recorded in the equipments subject toa partnership book at ae 2. 7350,000 ; anti, Ser. -tatands b. P280,000 a — htm Jushne Capital —-SH00e 4. 230,000 meriqage payable =< fa Yn Oa ‘a. Debit to accounts receivable of P72,000 Bebo allowance for uncllectbe accounts of 4000 * Debi accounts receivable of 65,00 d. Credit allowance for uncollectible accounts of P4,000 there isan agreement for division of profits but none for losses, itis concluded that losses should be distributed in the same way as profits fosses should be distributed equally ‘osses should be charged to the partner with the biggest share in profit ( ay ares losses should be divided according to the partners’ original capital contribution,—14. How mich isthe invested capital of tebron? . P2,000,000 a © 2,500,000 | 4,000,000 ie nee —~ a P7,500,000 Me >. 5,000,000 equipment SCONE © pssoo00 ( qisoesecw 7,000,000 rans 71,600,000 Use the following Information in answering items 16 ~ 22: Anne admits Dianne asa partner in her business. Accounts inthe ledger of Anne on December 31, 2035, immediately before the admission of Dianne show the following balances cash 260,000 aug 24992 remid Op r4000 Accounts Receivable 420000 Wa 2088 Ag 200) Merchandise inventory 480,000 wi. 24090 pica. aoe Accounts Payable 260,000 gig! +290 Anne, capital 300,000 onan Epmrere ‘They have agreed that for purposes of establishing Dianne's interest, the following adjustment should be made: | Anallowance for uncolecible accounts accounts receivable; The merchandise Inventory iste be increa¥@d by P20,000, and & Prepaid expenses of P25,000 and accrued expenses ofPS,600 are to be recognized, Dianne sto Invest sufficient cash to obtain a 1/3 interest n the partnership. The partnership wil use a new set of accounting books. —D._16. The ety oat the acounts receivable inthe book of Anne woul nclade 4 credit for uncollectible accounts of P21,000 Dd. ‘entry to adjust the merchandise inventory in the book of the part '& Debit allowance for uncollectibie accounts of P21,000 'b. Credit allowance for uncollectbie accounts of P42,000, & Debit accounts receivable of P23,000 “a. Debit inventory for P20,000 'b. Credit Anne capital for P20,000WRN DD SN Pars Se we Ea 20. The total assets of the newly formed partnership is + F1,863,700 re Co b P1,642,700 0, © 4522,700 ties 4 P4617,700 prepaid Brcrees 15) 000 bites ofthe newly formed partnership i sennrener’ | F a. 260,000 cal Syed arp 260,000 & 7266,600 4402 4 Answer not given Pee rs rota Linh 246100 2 22-The total capita of the newly formed partnership i 2. P1,223,200 Ay Capra) 417,400 b. P1599,000 f © PL402,300 D. Capita) cs! 1.376.100 1976 00 Fale) Use the following information in answering questions 23.34: oha\ Lid 2 % Mark, Leo, and Elirige formed a partnership on Knuary 1, 2022with investments of Pi00,000, 150,000, sed #2501 respectively. They greed tothe following division of profits and loses: 2 Interest pF TR based on the beginning capital ofthe year h Kamran ctrigsoniiad & Balance ter Jhterest and salary ina ratio of 20% for Mark, and 40% each for Leo and Eldrige on, Net nce foyer 2014 wais0,030 Mien 2015, income was P1800, During 014 015, th priest a ——= P 63,000 fdary acta Ff aon Remainder 28h) (4,000 (41) 3000 (46/) 32009 : to” ae C28. hat was Eldrige’s share of income for year 20147 ‘P6300 b. P53,000 & P38,000 4. 29,000 @.P51,000 ‘Mark's share of income for year 2014? ‘a P63,000 b. 53,000 < PS8,000 4. P29,000 e an ! _D_26. what was Eldrige’s capital balance at the end of 2014? eo Ld yo 200,000 7224.00 & #238,000 & P246,000fe. P24,000 27. What was Leo's capital balance atthe end of 20147 ,_P350,000 60,000 © P165,000 4. P213,000 @. P201,000 atypia) b.P117,000 . P119,000 4. P128,000 fe. P153,000 2, wot artes share of come for eu 2057 rane b. 775,540 65,540 4, 70,040 61,420 B28 wot was rapt tment 08 ! . #100000 | 100,000 en| 000 7,000. Se a O Se aoo tease Of. Ny 702 aosoo 90nd Sell solary \,008 ; cide 13,600 Remaindertat) 2220 (#)) 45490 "0/) 45A8D pom: Port tae “samo asysyp 10,080 WORE D._30. Eldrige’s share of income for Year 2015? 2" 34,420 75,540 65,540 70,040 b 4 fe. 63,420 As, wows Marsh ct nome fo Yow 2057 ‘a. P34420 b. P75,540 765,540 4. P70,040 fe, 761,420 Eldndge cpt, E at was Eldrige’s capital balance atthe end of 20152. 24,000 feyooo 19,090 204,040 P139,420 246,000 276,540 279,440 304,040 Pecee Slt les capital balance at the end of 2015? C34, what was Mari’s capital balance atthe end of 2015? a P163,420 Leo, cqpi +4)b. p1si,420 © P139420 4 P100,000 fe. 7142,000 f {Use the following information In answering tems 35 ~ 36: (Write your final answer on the space provided before each umber partner, Is allowed a “The net income of Nell and Lance Partnership for 2015 amounted to P504,000. Nell as the manag - bonus. 5;H00 _35. if bonus was based on net income before bonus, what was Nei's bonus in 2015? (6/, 400 35, itbonus wal 45,16 _36, 1rbonus was based on net income after bogus, what was eis bonusin2015? 1""/* Bonus Use the following information in answering items 35 ~ 36: (Write your final answer on the space provided before each umber The net income of Ariel and Kendrew Partnership for Year 2015 amounted to P504,009. Ariel isthe managing partner. Assume thatthe partners agreed on the following allocation of profits and losses Bonus of 20% to Ariel , Salaries to Ariel, P4z,000 and to Kendrew,P72,000; : Interest of 10% on average capital balances of P144,000 and P96,000 of Ariel and Kendrew, respectively. 4. Residual balance i allocated to Ariel and Kendrew in the ratio of 2:1. e & - | Assume bonus was bated on net ingame before bonus sla and incest. ' bonus sate 2p 10,000 0/37. Yow mucisthe share of Aili partnership income for 20157 sores ABD 1212 20,0 qujow 240,007 . 32jee Vejen ane Roms Zi. \00, 800 1}@2,400_38. How much is the share of Kendrew in partnership income for 2015? vemande k cae Coane: gO rie OU they SE? sov009 wort O00 5 0h Teor 8. Assume bonus was based on neti vopl but before interest nd salaries. 2\4p00_39. How much Ts the share of Ariel in partnership income for 2015? 2 = folams — 4Bq0 7200 120,00 Nneere# i'l \ys4,000 %Wy,0D 240,000} Bonus 200, 84,000 eapw 4 @ 7 £0,909 18,00 40. Howmuch isthe share endew inte parinaripcametor2aiss Net CHs)90,000 (',) soma) “ou2eu 7K fort “Zibem Tegan SO a Se ( sey eov - 22000) y a0 Sip a vie seit deans sitet nn Rosin Gio wr 209, 33 44. How much isthe share of Ariel in the partnership income fer 2015? "A x eG 32,90 Cagis OR sta ee Que Ja4,c67 ee Bonsai) 64000 i £7 42 Wow muchisthe sare Kendrew inte partesip come or 49% ()c3,393 CUA647_go 267 opis ieee ga sia famed 90 38,03 me? Ne= RO pov = 240,000 * ~ — *.20 20 s > , B. Assume bos was aad on et fon fs sed on netincome afterbonus, salaries andinterest anys 2.4 000 Fe J PRRE a Howmahistestarctircintne averorennie ee 2 22> 3224p Remayntet (‘/;) 8! - tops, 2 *PPE{O0 44. How much ithe share of Kendrew inthe partnership income for 2015? |slew nership has profit ¢fP4a,000 and Partner Kristian Isto be allocated a bonus of 10% of profit after bonus, Krstianne!'s C5 ‘bonus woud be 3 P4400 A800 eo «4000 3.600 110 Answer no ven B46, ore, a partner in £6 Parenersip haa 20% shareln the parnershipprofit and loss. Her capital sccount had net decrease ‘of P6000 in 2015. During that year, she withdrew P120,000 against her capital account but invested a property with afar ‘value of P25,000, The profit ofthe partnership in year 2015s a ; = mapa Pour O30, 550,000 a “al ». P150,000 | s Name: 2 ar = Use permanent inkin writing your final answer on the space provided. Erasure's strictly INSTRUCTION. ‘Support your answer with proper solution. Whisper a prayer before you start Oa Problem 1 ‘The capital balances and profit-and-loss sharing percentages for A, 8, and Con December 31, 2015 are as follows A, capital (30%) 80,000 8, capital (50%) 90,000 capital (20%) 70,000 ‘The partners agree to admit D into the partnership on January 1, 2016 for a 20% interest n the capital and income of the business. Instruction: Under each ofthe following independent scenarios, (1) prepare entries to record the admission of D into the partnership, and (2) compute the capital balances ofthe partners after the admission of D. D purchased 20% of each of the capital ofA, 8, and C by paying P60,000. 1 Journal entry: Debit, Stedit. ral (60,000 % 207+) Yo000 — 18,000 picapitel ( 9g oun x 2077) Cy Capital (70000 K 207 ) 14,000 _— O,Capital ( 14,0004 1B000FI, 000) We oo0 Capital balance ofeach partner after admission A _@,000 ae c 6,000 =— 8 12.280 — D _4e,000 fe invests P50,000 in the partnership for 8 20% interest. Land account is understated in the book of A, 8, and C. Journal entry:Journal entry 3. _Diiwests 970,000 inthe partnership for a 20% Intarest. Land acc sec wer ai’ 200 - 1p, 000 | M10, 060 090,200 ‘4. DinwestsP60,000 fora 15% interest inthe partnership, Journal entry. i —Siedit. 0,000 + SuSQ0 soo at ra t 45,000. eee ee ee‘rote i AB, and Care partners in trading business. They share profits and losses In 50:30:20 ratio w Acapital 3°. 300,000 Reaper *°/ 200,000 Ceaptal 10% 300,000 Imetructon: € is retiring from the partnership. Under each of the following ind retirement, and (b) compute the capital balance ofthe remaining partners after his retirement. 1. Cwas paid 220,000, Journal ety: ] Debit. | Cicapital Teo.ce © G [acepivel == 150 B, Capital ar - cash —— meee Capt balance ofeach pare ater retirement of A sangoo 8 102,800 2 Cwas pis Pa0,00. Journal entry Debit, 190,000 ——Autapital G6 —_ 97 hy wt ich sores worm a psrtersip, Rey to conte ash St E13S00, and Join isto conbune his equipment with book value of 200,00. I wes agreed that the equipment contributed by John shal be recorded at an amount that will give him 55% interest in the partnership cepital. The capital of partner John in the partnership upon formation is: a. P335)000 Rey ¥67- 135/PO 309000 © S$ & 88h 5,000 ony ss? _ sd. P1650 7 “SZ. Roland and Mark agreed to form a partnership with total agreed capitalization of P300,000, with Mark contributing f the total agreed capitalization, How much should Roland contribute? = :. \000 ~ TAC 300,000 — Roland 3/sc. _P150,000 Seo. xy 1,000 Mars ¥3 4, 50,000 loe, Leo and Eldrige agree to form a partnership with Chloe contributing P50,000 for two-thirds interest.in the partnership, and Leo and Eldrige sharing equally in the remaining required capitalization. The total assets of the partnership ypon formation is ae er aman oa] 150,000 ‘ 2s 225,000 ees, BA Eldrige agree to form a partnership with Chloe contributing P50,000 for two-thirds interest in the and Leo and Eldrige sharing equally in the remaining required capitalization. The capital of Eldrig i it mation is oe 200 712500 — PER 2 75000 ee b. 75,000 2) (so,000), ¢. P5000 5000/2 ~ pe Akg, Jar Nata Ft formed a parmersis oc yd EET pref tnd wth an acuston 3 _ Gt of P25,000. Natsumi contributed P25,000 cash, and Faith 75,000 cash. The land has a fair value of P50,000 at the formation date. The total capital credit ofthe partnership should be ; +P150,000 - Fut. P125,000 4. 145,000hots Inder the bonus method, ‘any increase or decrease in the capital credit of a partner is '@ Dedlucted from or added to the capital credits of the other partners. 7 b Recognized as goodwill & Recognized as expense d. Deferred and amortized to profit and loss bis ‘In accordance with the partnership agreement b. Equally d._inthe same manner as with profits. ~ C3». #1 and Cain formed a partnership and agreed to divide initial capital equally. At ein contributed P180,000 in identifiable assets. Under the bonus method to adj capital accounts should be debited for P2000 mm TEC Bonus TAC 10000 ~ b. P5,000 a SEABE! 00,200] (10j008) 4200 ne serearn [e0p02_| joyo90-—/ 0,000, For items 10~ 12: eee ~~ =—- 999,000 Jenny, Mar and Rie form financial position: Jenny Cash 90,000 ‘Accounts Receivable 45,000 Allowance for doubtful accounts 3,000 tand ie ding ; ‘Accumulated Depreciation - Building Mortgage Payable ~ Bank : ‘Owner's capital 132,000 ‘They agreed that the mortgage revalued at their respective fair market values > Accounsts Receivable at 90%. > Land at 120%, > Building at 70%. Thy also agreed that their capital balances should be equal in partner whose capital balance sive additional cash contribution. B Eos cof the partners has the highest capital balance after adjustments and how much? Mar, P129,000 d. some other @ Rie, P130,000 b. Jenny, P130,500 + © _B-11, How much is the total additional cash contribution of the partners with As determined in accordance with the Partnership Code of the Philippines Mar P 5,000 20,000 2,000 80,000 100,000 50,000 60,000 93,000 lower: aly the share of each partner inthe profits has been agreed upon, the share ofeach in the loss bel contributed 200,000 and ist the capital accounts, Abel's 1ed a partnership by combining their separate businesses with the following statements of Rie 60,000 75,000 5,000 130,000 payable shall be absorbed by the partnership and that the following assets should be ‘amount and profit and loss should be divided equally. Any is not equal to that of the partner with the highest capital balance after adjustments shall12 Pee als ret aus i (30,502 ™ 84 700° R 127,000 = or nv ee) B20 are | 1.008 0p?) oe 130,900 — a1609 rp) eae | tac = Tojo 2,800 |P2000 P3900 7 Du12. ow muchis 387,000 b. P380;000 the total partnership capital? For items 13 - 23: ‘The Partners of Dricia and Drenz are engage in wooden furnit je to hotels. Dricia’s capital contribution upon Partnership formation was P40,000 and Drenz’s was P60,000. They agree to share profits and losses as follows: Bricia Dre tors! As salaries 28,000 40,000 yao ea000 Asinterest on original capital (ome 10%) (_eqamlO%) woo 19082 Remaining profits/osses {sfbrofis forte fst yeor reached P120,00, ohn -19/ What share ofthe profits would Driciaeceved? a PAs600-- b, 957,400 B14” What share of profs would Dranz received? a PYE0 b. 457400 A A. 15“ The ending capital of Dricia would be a P2460“ b. A04600 © 15 Five of Drenz would be: 24,600 b. 104600 f the profits for the first year amounted to P40,000, D._17% What share of the profit would Drenz received? a, 26,000 perc. (70,000%3°7" b. P19;800 peace (30,00 Tor. C.- 18, Awhat share of the profit would Dricia received? a. 26,000 b. 19,800 Ny. 1¢-The ending capital of Drcia would be: a. P.60;600~ 79,400 B.-20. the ending capital of Drenz would be: = a. P 60,600 b. P794007 LY Goer 30%) 2700.70%) Capon 30%) 244,40 75, YOO ) ste Pag.400 4 P75,400 < Pa6,400 75,400 + pecia P9740 | fo;202 d. P106.400 we yea 389500 e masaco? | o3088 | 75.t00 d p106400 _4 5 Tes,400 [ ortiq pene — De p2oe00 2B 4q9% 7d. PI9400 HOO? GRY P105,200 P1s4,800ser ae Peo tera tal xe0v0 qoee oeee — ee 00/08 Bm. x rae omounted to 20.000, (24400) (elmo) 1881020) 1% oss would Dricia received? (He) [ene] om) 2: \ si & Pasone Me (4¢,00) x 207 c Y Dem (4Q,000% 707. d. P5,200 3 Wioa share of te lss would renz received? = P2600) paene (wieis a pee00 RAO 29,000 (0% {the profit for the year were P: the 30,000, what share of the profit would Dricia received? * a profit would Dr a brit D1 48,000 » 97 © P1740 eS . (12,400) De or Ifthe partnership agreement does not specify how income ito be allocated, profits and losses shouldbe allocated Equally, I proportion othe weighted average of capital invested during the period Ezuitably so that partners are compensated fr the time and effort expended on behalf ofthe partnership tm accordance with their capital contribution = a. P5200 — 4,000 Te ast) b a A A257 parmesship agreement of Ariynne and Jonnoleigh provides interest at 14% per year to be credited to each partner on the bass of weighted average capital balances. A summary of Arynne’s capital account forthe year ended December 31,2016, a8 as follows: netene 249/000 Balance, January 1 P2190 21yo00k%i2 = Additional Investment, June 24 60000 bacon. 94.00 0 Withdrawal, August 9 22500 (arusoo) Hin What amount of interest should be credited to Arlynne? 2 73228750- P3465050 P4750 é. P21,7505 5B 25 “ice, mos and Obadiah formed a partnership on January 1, 2010, and contributed 150,000, 200,000, and ‘250,000, respectively. Their articles of co-partnership provide that the operation income be shared among the partners as follows: As salary, P24,000 for Joel, P18,000 for Amos, and P12,000 for Obadiah; interest of 1233 on the average capital during 2010 of the three partners; and the remainder in the ratio of 42:4, respectively. ‘The operating income for the year ended December 31, 2010 amounted to P200,000. Joel contributed additional ‘capital of 30,000 on July 1, and made a drawing of P10,000 on October 1; Amos contributed additional capital ‘of P20,000 of August 6 and made a drawing of P10,000 on September 28; and Obadiah made a drawing of - T4or. A 207 =a i Salary 2400 yoo ieee jaterest127 (4800 94,700 24,400. 73/44 The partners capital balances on December 31,2010are; WSS Ot” eo bi Amos 1 Me es Paeie: e118? 110a P300.000 ». P262500 270000 ; 7,500 Di 35. sWhatis Rap's Ra slow 7 ' capital balance at December 31, 2015? =e Toe Se ticlenion, December 31,2015 ' 80 [tas Pena p2e7s00 _jievs_ i 5 337,500 Ha oa Ke 36. whats Glows ‘Capital balance at December 31,2015? @ P362,500 # Eres bd. Pato, ‘ pation P2750 aged ic —=—37,/Sig and Fred ac nora Sig nd Fed agreed to share the partnership's prof follows Boone OO fa Sig: P15,000 per month; $% bor after sal fe wont S% bonus after salary and bonus _44}-1e0 77050 To Fred: The remaining balance “is pes = $411,022, @P385,000 «92200007 =F b. 219,000 ——— ‘&.P200,000 Di_38, er the parnersin agreement, Kenérew i 0 recive « bonus of 20% of net income str bonus andthe ‘remainder is to be distributed as follows: 35% each to Kendrew and Aliza, and the 30% to Nicole. Ifthe partnership's net income is P3 180.000, what is the amount of Kendrew's share? K 3. P795,000 & 8Q7}000 eames SIREN, BUBO™ x 20f $96,00% = ». P4325,000 =a ie sd 1A57,500 Pusstsoo C38, oppose that he old parteshis of A&B reported the folowing: 2180-sze4= 2,us0 Partners: = 387. apital Profit and Loss Ratio, A 200,000 40% 2-5 8 300,000 60% FCs to be admit for 20% interest inthe pertneshig's asset and prot by investing P125,000, then the new profit and loss rato ofthe new partnership without specific agreement between A & B would be: a 8 a 97 189 (tee 207) a 40% 60% & Gos. te] Je C07. x B07) b. 6% 40% & 2% 48% C avy @ 33% the admission of a new partner, the total partnership capital increased by the fair value of the new partner’ ‘net contributions to the partnership. The admission was accounted for |& Under the goodwill method ‘Under the bonus method partner effected through purchase of interest in the partnership is 0ks as a debit to cash or other asset and credit to the incoming partner's© Recorded in the partners i secies hip books asa transfer from equity to lability C42. gery AiG 208 Nard a1@ partners who have ac 5 10 admit Art for one third int 8 capt of ?90.000 each nd share profits a ote equal. They fer : rd interest inthe frm upon his investment of P60,000, Under the bonus method, what i the total agreed capital ofthe partnership? of P60,000 Under th hat ® 180,000 a ok b. P270000 EK 5 reaooo % : é. 7150000 60 Bre 7 1CGx respectively. On December 31, 2010, their 3/000 and Ka, P300}000. On that date, they agreed to admit Daw asa partner wit Partner with a one-third interes in the capital and profits and losses, and upon his investment of P250,000. Ba ard Ka are Pz2a Ke are partners who share profit and losses inthe ratio of 7: Atspective capital accounts were as follows: Be, ‘What are the capital balances of 6, Ke and Daw, immediatly after the admission of Daw? ral. Ba ka Daw aq, year (50) 755.000 & Psno00 P300000 325,000 food (eo) | 295,000 315,000 285,000 sooono SAM 3 Love & r men wo It © 316667 283,333 300000 Daw 2. Oe 4. 350,000 300000 250,000 a folios: A 2% 100000 © GOW) 720080, etm STOOD te be trated the parent by ec percha of 2% ech sng pros capa P00, The tal eaten te pret aet D's admission is: A 186 (20,000) how a. P340,000 e ae SoA <. P300,000 2B Psoo00. ngess_yxo,ovo_ 207. &.Paa0.000 : Wea leeds 45, 3h capital blances inthe PSH Parinership are FAI Capita P600,000 Sarah's capital, 500,000; and Hannah's “ea Pat) Profit and os ratio ae 5:32, respectively fo Farah Sarrah, and Hannah, The FISH Partnership is formed by admitting Irish into the firm with a cash investment of P600,000 for a 25% capita interest. The bonus to be credited to Hannah's capital in admitting ish is 27 a P1000 52. F Geo &. P7000 07, 4 18/008 b, P3700 +o é 500 gi prso0o «7 * — oo ie) te emer mieeseaieace ts? @% _ Foritems 46-50 ho 290 “109% 71 Gara, Zeus, and Juz are partners dividing profit and loss ofthe partnership in the agreed ratio of 12:3 The following are OOS the ledger balances at the start of liquidation: HEP seroediat PoP Cash P 50,000 Accounts Payable 120,000 Non-cash Assets {670,000 Loans Payable ~ Zeus 10,00 Loans Receivable ~ Ezra 30000 Loans Payable — Juz 20000 ara, capital 150000 Zeus, capital 200,000 Juz, capital 250,000 PEDO Total liabilities and capital Soo P1500 d, P46920Bape“ tt Zeus received P20,0 ved P20,000 in the first cash distribution, how much cash did ern Alstribution, how much cash did Ezra received b e500 4 Pom 49 if Fara received Pa, & & fed P18,000 in the frst distribution of cash, how much did Zeus received? a. P2061 ee be paro0o. 80,000 Cc If Ju received P25,000 in the fst cash distribution, how much cash di Eara received? P3000 «730333 b.__P80,000 d, 788,500 _C.. 59th uz received P30,000 inthe frst cash distribution, whats the total eash avaiable for distribution to Partners? ‘a Pr4o.o00 120000 4. 240.900 tb. 290,000 EG sy“in amount is computed by? ‘2. Multiplying the total claims ofthe partner in the partnership by his profit and loss percentage Multiplying the capital bolance ofthe partner inthe partnership by his profit and loss percentage Dividing the total claims/nteress of the partner in the partnership by his profit and loss percentage er by his profit and loss percentage preparing the cash priority program forthe installment method of liquidation, the maximum loss abeorplion S,-Bhiding the capital balance ofthe part Bo tmepermers cept acountincreazesinthefoloing cases except when #parne'transactionin thepariersie involves ‘a. His intial investment in the partnership. 4 Personal drawings. Share in the net income. AC Additional investment in the partnership. _D-. wiich ofthe folowing is not considered asa legitimate expense of a partnership? Interest paid to partners based on the amount of their invested capital, Depreciation on assets contributed to the partnership by the partners. ‘Salary paid to the manager hired to run the business. ‘Supplies used in the partnership business. A. DX ‘wo sole proprietors formed @ partnership. Non-cash assets forming part of the initial investment in the’ partnership would be recorded at the a Proprietor’s book values or the fair value of the property at the date of the investment in the partnership, a whichever is higher. Proprietors’ book value or the fir market value of the property atthe date ofthe investment whichever is lower. «é_ Proprietors’ book values of the property atthe date ofthe investment, - Fair matket value ofthe property atthe date of investment. : ‘Ace, Boy, and Cr are partners Ther contributions are as follows: Ace ~ P6000; Boy = P4000: the partners did nat agree on how to divide loses f theres loss of P100000, now CAC a ae a) Ad ‘by the partners? 5 A) ono& Ace=PE0,000; Boy ~ P40,000; cart ~ PO B, Ace~P35,000; Boy ~ P25,000; Carl ~P40,000, © Ace ~P35,000; Boy ~ P35,000; Carl ~ 30,000 d. Age -P30,000; Boy ~ P20,000; Carl ~ 50,000 Aa 56. ther the cash prccty program, when al ofthe priorities are paid, any remaining cash distribution is -& Allocated to the partners based on their respective profit or loss ratios 'b. Allocated to the partners based on the balances in their capital account after: allocal Allocated to partners based on their pre-computed priorities d. Allocated to partners based on the relative value of their capital balances tion of losses BL sn raven vans and Raya received interest allowance of P100,000 and P150,000, respectively. They divide remaining profits and losses in a ratio of 3:1. the company sustained loss of P110,000 during the year, what 1 the share of Manda in the reported loss? 190,00) U to 1S? ase @& (P105,000) Mado, (4) ( 82501 ¥ c. (P120,000) (25) Ga). b 500) xs d. (°170,000) ——— Cio Z Utosoo) x 7% =] 225%) ey) Ase, ‘bough Rod's interest in the Chris and Rod Partnership by a direct payment of P600,000 to Rod. The capital balances before the sale were P240,000 and 360,000, respectively ar.Chris and Rod. What will be the capital balance of Dave recorded in the partnership book? yoo 2 < Red 760,000 {o07.= « 600,000 ches 240,00 O 4. P4g0,000 = 58-“Jam and Rem are partrers who share profits and losses ina ratio of 2:1 and have capital balances of 750,000 and 1,500,000, respectively. The partners agreed to admit Jen to the partnership. Jen invested P750,000 for a 35% interest in the partnership. The new capital of the partnership after admitting Jen is P3,000,000, Rer's capital balance after admitting Jenis sen 3,000,000 *AS7/ Bem ‘1/3 x (300,006) 5 x G9 a P1,600,000 = 1joS0,000&_P1,500,000 b. P1350,000 ~pyHGe%) A P1400,000 sere) 4,$00,000 ZFS OTT Rembeg Cup 30 wt T eon hee and Jey are partners who share profits and losses in a ratio of 3:2, respectively, have the following capital December 31, 2011: Braver ~ P2,000,000; Jay ~ P1,500,000. interest. B We 60 & 7900000 + 1,s008 7 Gd. PBOO,000 Tames |00 (\00) Is 4, sc SooPS agreed to admit James in the pat 0 for 9 poe-fourth ite Papert ie James inthe partnership by investing P1000, 000 for 920 Ga ‘Assume that the port @ P750,000 B woo O) Vass b. Pars000 punas000 72 Noo P1,125:000 Tag Ver {25 Braver's capital after admission of lames wil be: a P2, j &Pa060000 & 71925000 4 ¢na)x 3/5 + -P2,075,000 é prasoon YT). Wy = Aas serrcapta ater admission of James wil be: -& P1.450,000 5 eae 1,500,000 RPGR Assume that the partners agreed to admit James in the partnership by investing P1,000,000 for a 20% interest. The land account was determined to be understated and must be adj Peete ncn srnriesty gc teenie a P125,000 wo b. 500,000 % 20 sare a. P2,300,000 b. 1,700,000 200 [2a ies 5000 SE travers capt acount ater asin of ame il be 8, b. 2,000,000 2 2,300,000 b. 1,700,000 Jay/s capital account after admission of James wil be a, P2,300,000 1,700,000 baa Ah). Foritems 71-73: paper Partners Joan and Meryl each have P200,000 capital balance and Cash equals P100,000, non-cash assets equal P600,000, and liabilities equal 300,000, a PO = 72, Asa result of partnership liquidation, Joan will receive cash of it at 50,000 Pade 090,000 —— = 8,004 Y4 401 sey soo 3ev {T=} °° G25 ames apt cr wl e to its foir value before James's admission. p-0- ‘Some other amount & P1,900,000 4. Some other answer « P1,000,000 d. Some other answer 1,000,000 d. Some other answer AA -Be=70, Assume thatthe partners agred to adit James into the partnership by investing P2,000.000 fr a one-fourth interest, James's capital is @) P1,375,000 = % u908 ih persion sa nee d.P1,625,00078% 21027 __ 240 2,509 \ “ ~ Ya Eee iar profits and losses in a 3:2 ratio, respectively. ‘Assume that the non-cash assets were sold for P250,000 and that the partners is personally insolvent. As a result of partnership liquidation, Mery! will receive cash of 60,000 4. 100,000 & P60,000 100,000Assume that the non-cash AS a result of the liquidat a P-o~ ‘assets were sold for P225,000 and the partners are solvent. jor, Meryl will receive cash of & P50,000 Chan ‘& 25,000 ra «d. 60,000 Ben Which of the folowing isan expense of a partnership? &. Interest on partners’ capital account balances. b. Salaries given to partners © Both AandB Neither A or 8 Appartner’s withdrawal of assets from the partnership that is considered a permanent reduction in the partner's ‘equity is debited to the partner's Drawing account & Capital account ee Retained earnings account 4. Loan receivable account A ~76. ‘Salaries to partners of a partnership typically should be accounted for as ‘a device for sharing partnership net income ‘an operating expense of the partnership, Drawings by the partners from the partnership Reduction of the partners’ capital account balances aose ee acer cema ey rom neso neal feces Eas eae According to beginning capital ratio d. According to average capital ratio DF inatintedparvestip, a. The general partners have limited liability b. Allpartners have limited lability. ‘&_Allbut the general partners have limited lability. pe All but the general partners have unlimited liability. By Rowell contributes land to a partnership. The land cost him P200,000 five years ago. On the formation of the 79. partnership, the fair market value of the land is P500,000 and is subject to P50,000 mortgage which the partnership ‘assumed. The entry on the partnership's books would not include: ‘a. a debit to land for P500,000 accredit to capital for P 450,000 ba credit to capital for P500,000 d. _acredit to mortgage payable for P50,000 a wii contributes a delivery truck originally costing P350,000 to a partnership. On the date of formation, the related accumulated depreciation is P70,000 but its current selling price when sold to the market as second hand {is P300,000. The truckis subject to a mortgage of PS0,000 which the partnership has assumed, Kristianne's capital ‘must be recorded in the partnership book at sara] 70g, pes0,000 {= d. — P230,000 Besant nea evi ate slowance fx unsectoesesants of F300 et Grips000 of te accounts can be collected. The entry made by the would not include dati:Debit to acc: cre NOUN ecevabe of P5000 Debi a towanee for uncollctible scounts of 7,000 Cant Accounts receivable of 72.000 Fedit to Dianne capital for P65,000 2 b. d. A et Partner whose liability f lity for partnership debts is limited to his capital contribution to the partnership is called @ a A phcinee is capital contribution to the pa ip Sitar Secret partner 4, Dormant partner BE Bo crrtas more or rope cone partnership scaled Capitatst partner «Nominal partner a B.Industal partner 4. Secret partner I te va pre oc steartmon te fe parce 8 Romina partner Tima peer to 9 levine porter ae eer rie TD 85, A partner who doesnot take active part but known asa partners clled & Dormant partner Silent partner b. Secret partner 4, Nominal partner Nominal p For items 86 -87: ‘Anne and Leah agreed to form a partnership by contributing money and property. They wil share profits and losses inthe ratio of 40:60, respectively. Anne will contribute cash of P250,000 and inventories with fair market value of 350,000 on the date of partnership formation. Leah must contribute enough cash to bring the partners’ capital to the agreed profit and loss rato. fase, L407) on | sa.008 [_-86. How much should Leah contribute into the partnership? Le a. 600,000 . P360,000 G00,000 b. P1,500,000 P300,000 Arane YoY. _ @o0cu C.._ 87. What is the total partnership capital upon formation? Leah eo. | F00C04 eg a, P960,000 & P1,500,000 jour |) $00 pe , Pe40,000 4, 7,000,000 (ero0e ——— xtor. oer nae 40%. = 9qa0e ‘The statement of financial position of hte PPP Partnership, ust before liquidation, is as follows: Cash *%6,000.60 abilities 70,000.00 Non-cash assets 140.000.00 Ping. capital 60%) 0,000.00 ~ Pang. capital 20%) $0,000.00 Pong, capital to.000.00 na mani oe ans C88. ifthe non-cash assets are sold for P150,000 and the liabilities are paid, the remaining cash should be distributed to the partners as follows: a Pak 48,000 8,000 is om 000 Ps0,000 10,000e & P5€000 52,000 PA: P00 2.000 24,000 24000 B89. it thenon-cash oe fel *2 for P100000 andthe Kables are pad 0 the partners as follows Ping ing cash should be distributed Pang ae eee 40.000 po oa Oe 42,000 2,000 © P&2.000 14000 14000 P5000 50.000 P10,000 ring cath should be distributed 65 If thetnon-cash assets are sold for P70,000 and the liabilities are paid, the remaining follows en Pang Pong |B P5000 ae b. P5.600 735200 PO P80 a Fa - Cash wea = Gal 88) Ceqlap — dejan: re, Seger \sqo0b (140,00! Nea 5 sweat (70,000 ch. usb ¢ Baencer [29,000 ayntnd (0008) oo ce sqeov 1 : 10,900 Sone soe) ace 4o,000 \40,0°0 ™ es ee ee » (49,000) (eo ae (79,090) paneer qe) po Ua aa Jo,e00 so Poterees ——10/ a) F aes (2006 e no \40,a00 i 00) et m0) ey later eg (tt aN a ; “ale oF BY Get) if on fe) ee uu pemynt stay Lae : Sree 0/000 ae oe ‘ Bat ane ae dd | Less ak ee = a (Cr) f inte Lond and He all ge yo te dein of youn Kart” Paton 4Adventist University of the Philippines College of Business Department of Accountancy Preliminary Examination in Principles of Accounting | February 16,2016 fare, Rowell P Score: = True oF False. Write Ton the biank ifthe statements true and F ifthe statement i false : EL Finacial accountings intended to provide accounting information ony forthe management 2s Pais fr _decision making. £2 External auditing fells under private accounting, Tin managerial accounting, there is no accounting standard that needs to be strictly followed since the tos st provide accounting information fo management EC etera users of accountng infomation include the goverment ex Ney sro cocard 2 external user of the financial reports. lis 8g E vice-type entities are those that buy goods the sell them ass. 4 L_7Manacaring enties yan atria and conver them into finished products +s al Ownership in a corporation is represented by stock/shareholdings. “E9-—“Apartnrshipis alvays ound hy to nvivals 109 110-Under cash basis of accounting, income is recognized when cash is received. Multiple Choice. Write the letter of the best answer on the space before the number. Bi, Alot the folowing are qualitative characteristics ofa financial statements except Boh 2. substance over form reliability b. going concern di prudence _B.2.__ Which of the following is not partof basic financial statement? a. Trial balance statement «. Statement of Cash Flows b. Statement of Comprehensive Income d. Notes to Financial Statements D3 The following are examples of service entities except a. Globe Telecommunications. .Jollibee (Fast Food) b. Meralco. (Electricity Provider) 4, South Supermarket _D. A= Which of the following is considered an advantage of a sole proprietorship over ‘other forms of organization? a. limited liability . more expertise shared b. bigger source of funding (capital) d.ease of formation ._5,_—-Aill have normal credit balances except ee a. customer advances drawings b. capital d.accounts payable — af ©. _ Debiting cash while crediting accounts receivable represents a. customer refund ¢. collection from customers _ b, payment to suppliers d.rendering services for cash = ‘AL7. Statement 1—Balance sheet accounts are also called permanent/real accounts. Statement 2—Temporary accounts are closed at the end of each accounting period. a. both statements are true c. only statement 1 is correct. b. both statements are false dL only statement 1 is incorrectS_Aésets are different from expenses in that assets have normal debit balance b.assets ate credited to represent decrease Bie” 3 Supplies are different from merchandise inventory in that 2. supplies are bought on account b.supplies are bought for cash “B18 Prepaid rent accountis debited when a. the entity pays a previous month's rent b.the entity pays rent in advance ‘a unearned revenue berevenue All of the following accounts are temporary except assets have future economic value d.assets are paid for «supplies are not meant to be sold d.supplies are assets centity falls to pay the current month rent dLentity consumes the prepaid rent supplies expense dirent expense 7 S12. Aclaim froma customer for services rendered isan item reported as {a accounts payable in the balance sheet ‘accounts receivable in the balance sheet ‘c. service revenue in income statement service expense in the income statement .D..32~ Financial information must poses ths characters inorder for users oealy understand the contents of the financial statements reliability completeness a increase in asset, decrease in equity b. decrease in lability, decrease in asset 15, The norma tance ofan count son the a a. debit side of the account beret side fhe account ce can payments on accounts payable will 2a. increase assets and liabilities bincrease liabilities and decrease capital FA Which snot poet corbin of matt relevance d.understandability «c.dectease in equity, increase in liability d.increase in asset, increase in liability side represented by the increase in the account d.side represented by the decrease in the account . decrease assets and decrease liabilities . decrease assets and decrease capital _D.37,~ Which of the following distinguishes the personal transactions of business owners from business transactions? cost principle 'b. going concern assumption 718 Which of the following is not a current asset? a.cash biaccounts receivable A/a 19. Which of the following statements is true a. assets increase when Its debited b. the normal balance of liabilities is credit c expenses have normal credit balance d. revenue accounts are decreased by credit them «substance over form d.separate entity assumption c. furniture 4. merchandise inventoryNA “520. Which ofthe following best represents recelving customer's payment in ad 7 incense nase, decrease n another asset 6. decrease in ait, decrease in reverse b increase in asset, decrease in liality d.increase In asset, decrease in hatality 2:21. Which ofthe following can complement an increase in asset ina simple journal entry? a decrease in habiity ‘ icteasein expanie b increase another ype of asset Ghinctease in cquty B.22. When bills are received, and payment is not made immediately, the proper recording should be CG lncrease In asset, increave in ability 2. increase in equity, increase in asset diincrease in asset, decrease in equity b.decrease in equity, increase in lablity 28, Aietoliowing accounts have normal credit balances, except a. capital withdrawals interest income B24, Assets difer from expensesin away that 2 assets have debt balance while expense hase olance _b. assets have future economic benefit while benefits from expenses have already been used €. expenses are incresed when debited while assets are deceased when credited duther sno dfeence at all €.25. The Financial Statements include all ofthe following, except: a. Statement of Financial Position (Balance Sheet) b. Statement of Comprehensive Income (Income Statement) Statement of Worksheet d. Statement of Cash flows Business Transaction Analysis. ‘Show how the following transactions affect the accounting equation write plus sign (+) to indicate increase and a ‘minus sign (-) to indicate decrease in a group of accounts. Leave the box blank if it has zero net effect on the group of accounts. (3 points for each item transaction) [8 T Received and paid the electricity [9 J Paid the promissory note in #4. [10 Paid other utilities for the month, 4,300. | Borrowed 140,000 from the bank through aloanJoumalizing. Write the journal entries fr the foregoing transactions (2 points for each transaction) be Se ee | Se a te es [eee Lz 7 sere ee Sera a ls [eR cease At eve { = [aneoo [a coe | 20,000) Tyo LeeBivie epense i | 10 poss} steers —___sseo | ° ea | spo} fa [eee $$ }2=} _4 [== oans pavabie i [swo.ev0 ee a0 | Ta a cash | 200 ip va 40/00 a service inccme 301005 14 REBT espe oe | cosh. 15,000 [qs [eeiees winarasal Toe L cash we8etemporary (1 point each) THial Balance (1 point each conect balance). Determine whether the accounts rea ot teporary po | Account Name [Gia 2 overstated assets and overstated capital b. overstated expenses and overstated captl (]pnderstated assets and understated capital none a the above ‘On ay 1,2013, Tay Co. bought machine for ?240,00. Atte end ofthe yar deprecation expense forthe machine ‘amounted to P12,000. The machine has a useful fe of 12 years. Whatisthe salvage value ofthemachine? | ye — gv. 2.12000, nes 190,900 wT »b.18,000 .P24,000 fete oe «P3000 cnmectiieshoe gfe" 2, ee Choose he incre taterent bout the “sing ens” 2. acued expenses neces to update the counts ©madeat the begining of every prod general mage at the endo accounting period Which ofthe statements describe the accumulated depreciation account? a. acontra-aset account deducted from the related asset account b.aliabilty account with a credit balance acomtra-asset account deducted from accounts receivables dinane ofthe above ‘The periodic expiration of al plant assets except land is a. bad debts expense «. depreciation expense b. asset expense d.accrued expense Services oF goods that have nat been consumed a the end of the accounting period a. accrued expenses «accrued income b. prepaid expenses d.uneamed income ‘Supplies on hand ae shown as P315 inthe books before closing the trial balance, P290 ofthese supplies were used during ‘the period. The amount tobe shown inthe adjusted balance sheet i, P25 debit &.P290 debit .P315 debit 4. P25 creat Depreciablecostisequal to 2. acquisition cost less salvage vale dvided by estimated useful ie @iectuistioncostless salvage valve . market vale less salvage value <. market vale ess salvage vale divided by estimated useful life Statement 1: Prepaid expenses may be recorded intially as expenses or as assets. Statement 2:On December 31, Brock Inc, owes 15 days’ worth of accrued interest on aP3,000.00 note payable at 8% interes. The adjusting entry includes a debit to Interest Expense for P1000. ‘ V. Poelsame errs =i j a. true false false, true retrace 2 Collected 90,000 fro 3. Sold 50,000 on cash, C Received the electricity bil for t Borrowed 780,000 from the ba the month, (8890) nk, ee 1 PBeding : = ee Accourt, payable 2 [tose Accounts Ree 3 bash iE Sales 4 [wiles expense tutes payable 5 |cash Some Payable Problem 2. The trial balance of Jimeno Company is shown below: Trial Balance ‘Adjustments: le a Credit ‘+ The remaining balance for supplies has Cash 760,000.00 been determined to be 32,000 at the end), ‘Accounts Recewable 262,000.00 ‘+ fhe period. Supplies 307,000.00 4 Thesalvage value of the machine and |. land 800,000.00 the vehicle was determined to be en Machine 37000000 70,000 and 60,000. Both have a useful Vehicle 360,000.00 eas + ‘© Salaries of 40,000 have been accrued at ‘AD -Machine a anny ‘theend of the year. ‘AO Vehicle 40,000.00 ‘© Theloans payable has a 2-year term ‘Accounts Payable 100,000.00 ‘and an annual interest of 8. The ‘Loans Payable 400,000.00 Unterestis payable On June 1, 2016 and June 1,2017(end of the 2 years). Jimeno, Capital Bec Jena Weneaees: smn Prepare a worksheet (2 points for each correct Revenues 000,000.00) footing balance). Post the necessary journal Salaries Expense 480,000.00 entries on the adjustment colurnns (2 points 7 8.3 hm ences of 4,000 reait over the debi balance inthe lance sheet column fr the worksheet at ntl footing Indicates 2. Income of 4,000 « 1oss0of20,000 b. oss of 4.00 | 4. cannot be determined 8 ane a va B._ 3, Fale to record deprecation expense n a period causes a. assets tobe understated Fabilty tobe overstated b. income tobe overstated di capital to be understated LAAs epee obese fr more than one pod 2 ae expensed at the ea of purchase b expensed atthe year of spr c. experised against each ofthe years benefitted using deprecation d.not expensed at all ey eet contains all of these sets of columns, except: ‘a. Income statement « balance sheet b.adjustments d.cashflow D6 “AF the following transactions involve cash flow? a. purchase on account accrual of salaries . depreciation d.deferred expense D7, ch of the following adjustments has an original entry prior to the adjustment? a. accrued salaries . accrued utities revenue earned d. Insurance incurred As 8, _Apincif in expense a. decreasesincome « Increases capital b. increases income d. does not affect income and capital 2. 9, so in coperscot go together with 2, increase n asset « inceasein asset none of the above b. increase In liability _ A. 10. __Thedebit and crelt analysis ofa transaction normally takes place 1. before an entry is recorded in a journal.‘when the entry posted tothe ledger. {when the trl balance s prepare dat some other potnt inthe accounting cle, FA : = 11 The accounting equation must remain in balance t 2. throughout each step inthe accounting oye only when journal enties are reconded «only atthe time the tral balance f prepa. 4. only when formal nancial statements ae prepared 12, Which ofthe following errors could have been committed and sil result to a balanced tial balance? 2. an amount could be entered in the wrong account. b. a transaction could have been entered twice «.atransaction could have been omitted. d.allofthese a ac gS ety terecentagethan sconce ean saa ate 2a. debitto accounts recelvable b credit to accounts receivable. d.creditto accounts payable ~B_14.__smratiesrned revenue can best be described as an amount ‘2. collected and currently matched with expenses. b, collected and not currently matched with expenses «not collected and currently matched with expenses. 4.not collected and not currently matched with expenses Anacenred revenue can best be described as an amount 2. collected and cumenty matched wit expenses b collected and notcurenty matched with expenses. notcolected and curenty matched with expenses 4-not collected and not cunenty matched with expenses Dine: Mpa etl not bea correct form foran adjusting entry? a. Adebit to a revenue and a creditto a liability peered te 'b, A debit to an expense and a credit to a liability oor .Adebit toa lability and a credit toa revenue d, Adebittoan asset anda credittoa lability Cc Ls. seg accounting period, an expense item has been incurred and consumed but not yet pald for or recorded, ff en the end-of period adjusting entry would involve a.aliablty account and an asset account. ban asset or contra asset account and an expense account. «.alablty account and an expense account. a receivable account and a revenue account. c When an item of revenue is collected and recorded in advance, itis normally called a(n), revenue. a. accrued poyoco | 4 E 1 B9,000. | [ pepecation Expense [ power | L e —_ Le L asso Feco | 3A o00 peeo0o | Taejoop # TAGees permanency NS29 ‘TEST MATERIAL 1 _Smlapace Rowell P_ TT 2:30° $30 sc ge Aly Income Summary 4. Capital Drawing 00 5. Sup} the balance sheet total debit column Fis a P5,250 balance and ce: Balance Sheet column. This difference is d ing entries must be ‘a. Anentry in the adj worksheet for P2,550 5 statement column debit or credit b @ 4 c lamn of the balance sheet © The ype income is extended tothe credit column of the \piince sheet . £ Snagit te totaf debiJcolumn of the Income Statement is rege ee er a and the total credit column is P897,000.' Which of these a All the socounts have aero balances statements is correct? The asets ability and equity aeons have eo Sema lances b. The difference represents net loss which is extended to © Theincome, expense and income summary accounts the debit column of the balance sheet. have zero balances income, expense, income summary and capital peer ° The difference represents net income which is extended to the debit column of the balance sheet. to the credit column of the balance sheet. d. None of the abovea j Completion of the Accounting Cycle the closing entries, the income summary account has balance of P28,000. Which of the following statement is al revenues are greater than total expenses, cating net profit al expenses are greater than total revenues, indicating net loss, ‘owner invested additional cash of P28,000 Jerfient is correct. lowing steps may be omitted in the completion of the ies are posted to the general ledger entries are journalized then posted to the sdger Statements are prepared -versal of some adjustments made a. Unearned Service Revenue <. Accumulated depreciation d. Accrued Interest Payable © Moubtful account expense 10. sheet, the Income Statement debit column equals P800,000 the credit columns equals P700,000. Which of the following statements ‘The results of operation is a loss of P100,000 which is added to the credit column of the Income statement and ~ extended to the credit column of the Balance Sheet. Te added to the credit column of the Income Statement and ‘extended to the debit column of the Balance Sheet. ¢. The results of operation is profit of P100,000 which is added to the credit column of the Income d. The results of operation is a profit of Pl added to the credit column of the Income Statement and added to the debit column of the Balance Sheet. e. None of the above statements is correct. SOLANA Meet CA ek GAMO aie Bs Sk ll a a a = ‘The results of operation is a Joss of P100,000 which is eT A —————— Part 1 - Service Accounting aut that ee I-A the beginning of the year, the balance of G. A. Rante Capits} is * During the year, G.A. Rante invested P50,000 but made a lrawal of P30,000 at the last quarter of the year. After closing the al accounts, Income summary showed a Aebit-halance of F36,000. The net increase/ decrease in the capital account ise =o Increase of P16,000 Increase of P56,000 Decrease of No effect on capital oe Orr z § a lo ® Makati Palace Hotel adjusts its accounts every month but prepares closing entries only at Decernber 31, the end of calendar year. The ledger ted accounts are given at the end of each month: 11B0N3 12p1/3 Cash 56,000 Accommodation Revenue 750,000 ~F4 If balance sheet and income statement is prepared for the month of Decemiber only, what would be the amount of cash and ‘accommodation revenue to appear in the financis @ Cash, P84.000; Accommodation Revenue, P1,050,000 ’b. Cash, P84,000; Accommodation Revenue, P'300,000 Cash P28,000; , PL 0504 3o-The Service vehicle, costing P1,000,000 of XXX Company is being ‘depreciated over 10 year life with salvage value equal to 10% of its costs. Alter recording the depreciation on December 31, 2013, the balance of the accumulated depreciation account is P315,000. What is the age of the service vehicle as of December 31, 2013? 3 years 3.15 years 35 years year eremt of the Accounting Cycle Company has P9000, 10% 90-day note receivable mmber 31. ‘The note is dated December 1. An is made on the note at year end. the work sheet’s Balance a column than 1 al Balance debit column This would be the resul ‘a. A P6OO entry to supplies in the work adjustments debit column BA adjustment debit column © A P00 entry to supplies in the work sheet’s adjustments credit column a. Not given re yaoot ‘rial balance? : ‘a. Prepaid insurance expense b. Accumulated depreciation Unearned rental income Doubtful account expense 00 entry to supplies expense in the work sheet’s 4 La f 7, beginning of the JA com} repares reversing entries at the beginning eee eed Which of the following adjusting entries prepared should be reversed? a’ {© The enty to take up the eared portion of rent cole advanced b. The entry to take up the expired portion of the insurance -mium paid in advanced « The eae) take up unused supplies at the end of — accounting period d. The entry to record depreciation of fixed asset 4 wes Dl AZ PREIT AD Part 1 - Service Accounting ou of the following errors would cause the trial balance to be unequal? TA transaction was posted twice B.A cash sales transaction was recorded correct, but posted as debit to cash and credit to accounts payable cash purchase transaction was recorded correctly, but posted as debit to utilities expense and credit to accounts payable @ A payment of P500 to a creditor was posted as debit of P500 to accounts payable and a debit to accounts receivable of P500. a Ketor posting the closing entries: ‘a Income summary, revenue accounts and equity accounts have zero balances b. Expense accounts, revenue accounts and equity accounts have zero balances © Revenue accounts, expense accounts and income . sumumary accounts have zero balances a balance of all accounts will become zero ‘Which of the following is NOT TRUE of a worksheet? Ithelps facilitate the preparation of financial statement is included as part of the published financial statements It provides a place where adjusting entries can be made informally before they are journalize and posted It provides balancing mechanism that helps to uncover accounting errorsAdventist University of the Philippines COLLEGE OF BUSINESS 19 Department of Accountancy a Quip Il im Principples of Recounting f 2° bate_oY] re] Name_salapace , Rowell MULTIPLE CHOICE: Write the letter of the best answer on the space before the number. B__1. hich ofthe following is equal to the Statement of Financial Position (a.k.a. Balance Sheet)? ‘, Unadjusted tral balance Adjusted trial balance , Post-osing trial balance 4. Unbalance trial balance ‘Which ofthe following describe the correct effect of closing entries? ‘a. Only nominal and temporary accounts are closed with closing entries b. Owner's drawing isthe only temporary account that is beng closed with the closing entries < Closing entries will also reduce the contra assets accounts to Zero 4. The income summary account i the real account wih the same nature as capital poe ee adjusting entries could be reversed, except one. a. Debit supplies, credit supplies expense . Debit interest receivable, credit interest income Debit deprecation expense, cedit accumulated depreciation d. Debit fevenue, credit unearned revenue C._-€" There is net income when ‘a. The credit totals in the adjusted tral balance is greater the the debit totals inthe income statement columns b. The credit totals in balance sheet columns in the worksheet is greater than the debit totals inthe income statement column. The debit total is greater than the credit total in the balance sheet column d. The adjusted trial balance is not balanced C. Which of the following wil have an open account in the post-losing tral balance? a. used supplies ‘unearned interest income b. interest expense 4. rent income therm worksheet lays the groundwork for formal financial statement preparation. b. is a fundamental financial statement. ._ provides details necessary for full disclosure and the preparation of footnotes. 4._is prepared at the end of each operating cycle B _A7- In preparing a worksheet, anet loss would be computed and entered in the: a. debit column of the income statement columns of the worksheet. . credit column of the income statement columns of the worksheet. in the debit column ofthe adjusted trial balance. 4d. in the credit column ofthe balance sheet columns ofthe worksheet ZL D8. hich of the following accounts would not be closed at the end of an accounting period? ‘a. Income Summary Revenue b. Expenses 4. Capital Accountbis _2- IM gra ese sempre et account cunt of $1010. The proper ery to record the cs othe Ian amar nak wt che 10,00 Income Summary 10,000 b.. Norris, Capital 10,000 Income Summary 10000 Income Summary 1000 Nori, Capital 10,00 4. Income Summary 10,000 : Expenses 10,000 —AZ_10. The folowing statements all pertain to the accounting cycle. Which of these statements wrong? a. A post-closing tral balance is prepared prior to closing temporary accourts. '. Formal financial statements may be produced from the worksheet, (c_Adjusting entries are recorded inthe journal and posted tothe ledger. 1d. The post-cosing tral balance is prepared by examinng ledger balances ro 1. Which of the following statements about reversing entries is true? ‘a. Identical account balances are achieved inthe subsequent accounting period whether reversing entrees art uutlized oF not. b. Reversing entries may not be used with accrued revenues. c._ Reversais are generally appked to those adjusting ems that do nck invole tature cash fica. 1d. Reversing entries would not be prepared f a company also utkzed dusng erties. subcequert to the cote a B.__12. Shipman Company had accrued salanes of $300 on December 31, The company recorded reverseg ertries 6 the folowng January 1. On the next payday, January 7, the appropriate ery to record tne payrert of $3 5000 al BP salanes should include soonas Comes MO ° a. a debit to Salares Expense of $1,000. «a debatto Salanes Expense of $1,300, ™ doanes Pagaele b. a debit to Salaries Expense of $700. 4. a debit to Salanes Payable for $200. paveres OF" AS han expense has been incurred but nat yet recorded, then the endo: pend acyusteg erty woud neve a(0) ‘a babiity account and an asset account, eQuty ard a habity acco. 4. recevvable account and a revenue accourt ty account and an expense account AL 14 Faure to record wage expense earned by employes atthe end cf an accouring pened tat wi ve pad onthe following Friday resus in a. understated income. b, understated iabines. c_sersated expenses ores assets 15, Faiure to record the expired amount of Prepaid Insurance Expense would NOT a. understate expenses. 1. overstate net income,overstate mers’ equity, 4. understate lables. Ince in an Unearned Revenue account represents an amount that is red Colected a Yes a? b Yes ‘s © No te 4 No "o Reversing Entries. Give two examples of adjusting entries that ae reversible (4 points) ) Solanes tapense Goo soiane, Segoe 00 2 wrens cael? Treome rete 2,000