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Partnership Dissolution: Quiz

1. Nunu and JYP sold a portion of their partnership interest to Cheer for P132,000. This resulted in Cheer acquiring a 1/5 interest in the partnership's net assets and profits. The question asks for the combined gain realized by Nunu and JYP from this sale. 2. LIN's capital account should be debited by P16,000 when SEO purchased half of LIN's 50% profit sharing interest and half of LIN's P24,000 capital for P32,000. 3. DOO will be admitted as a new partner for a 20% interest after paying the existing partners a minimum of 10% of the value of their interests. This will

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313 views5 pages

Partnership Dissolution: Quiz

1. Nunu and JYP sold a portion of their partnership interest to Cheer for P132,000. This resulted in Cheer acquiring a 1/5 interest in the partnership's net assets and profits. The question asks for the combined gain realized by Nunu and JYP from this sale. 2. LIN's capital account should be debited by P16,000 when SEO purchased half of LIN's 50% profit sharing interest and half of LIN's P24,000 capital for P32,000. 3. DOO will be admitted as a new partner for a 20% interest after paying the existing partners a minimum of 10% of the value of their interests. This will

Uploaded by

Lee Suarez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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PARTNERSHIP DISSOLUTION: QUIZ

1. The capital accounts of the partnership of Nunu, JYP, and Red on June 1, 2020 and are presented
below with their respective profit and loss ratios:

Nunu P139,200 1/2


JYP P208,800 1/3
Red P96,000 1/6

On June 1, 2020, Cheer is admitted to the partnership when he purchased, for P132,000, a
proportionate interest from Nunu and JYP in the net assets and profits of the partnership. As a
result of a transaction, Cheer acquired a one-fifth interest in the net assets and profits of the firm.
What is the combined gain realized by Nunu and JYP upon the sale of a portion of their interest
in the partnership to Cheer?

2. SUHO Partnership had a net income of P8,000,000 for the month ended September 30, 2020.
SEO purchased an interest in the SUHO Partnership of LIN and DO by paying LIN P32,000 for
half of her capital and half of her 50% percent profit sharing interest on October 1, 2020. At this
time, LIN capital balance was P24,000 and DO capital balance was P56,000. LIN should receive
a debit to her capital account of:
3. Partners ARI, EU and KO sharing profit and loss based on 4:3:2 ratio have the following
condensed statement of financial position:

Total assets P1,880,000 Liabilities P480,000 ARI, capital 620,000


EU, capital 400,000 KO, capital 380,000
Total liabilities and capital P1,880,000

DOO will be admitted as a new partner for 20% interest after he pays the three partners with a
minimum of 10%. Thus, the old partner will have to transfer to DOO 20% of their interest.

4. Partners ARI, BRE, and CHE share profits and losses 50:30:20, respectively. The statements of
financial position at April 30, 2020 follows:

Cash 40,000 Accounts Payable 100,000


Other Assets 360,000 Ari, Capital 74,000
Bre, Capital 130,000
Che, Capital 96,000

Total 400,000 Total 400,000

The assets and liabilities are recorded and presented at their respective fair values, JUJU to be
admitted as a new partner with a 20% capital interest and a 20% share of profits and losses in
exchange for cash contribution. No bonus is to be recorded. How much cash should JUJU
contribute?
5. The following is the condensed statement of financial position of the partnership ANN, LIM and
ELA who share profits and losses in the ratio of 4:3:3.

Cash 180,000 Accounts Payable 420,000


Other Assets 1,660,000 Ela, Loan 60,000
Jo, Receivable 40,000 Ann, Capital 620,000
Lim, Capital 400,000
Ela, Capital 380,000
Total 1,880,000 Total 1,880,000

Assume that the assets and liabilities are fairly valued on the balance sheet and the partnership
decides to admit MOM as a new partner, with a 20% interest. No bonus is to be recorded. How
much MOM should contribute in cash or other assets?

6. COLE and GIGI are partners who share profits and losses in the ratio of 7:3, respectively. On
October 5, 2020, their respective capital accounts were as follows:

COLE P35,000
GIGI 30,000

On that date they agreed to admit HARRY as a partner with a one-third interest in the capital and
profits and losses, and upon his investment of P25,000. The new partnership will begin with a
total capital of P90,000. Immediately after HARRY'S admission, what are the capital balances of
COLE, GIGI, and HARRY, respectively?
7. On June 30, 2020, the balance sheet for the partnership of LY, ARI and TRI, together with their
respective profit and loss ratio, were as follows:

Assets, at cost 180,000

LY, Loan 9,000


LY, Capital (20%) 42,000
ARI, Capital (20%) 39,000
TRI, Capital (60%) 90,000
Total 180,000

LY had decided to retire from the partnership. By mutual agreement, the assets are to be adjusted
to their fair value of P216,000 at June 13, 2020. It was agreed that the partnership would pay LY
P61,200 cash for LY'S partnership interest, including LY'S loan which is to be repaid in full. No
goodwill is to be recorded. After LY'S retirement, what is the balance of ARI'S capital account?

8. HAR, ALV and UNI are partners with capital balances on December 31, 2020 of P300,000,
P300,000 and P200,000 respectively. Profit are shared equally. UNI wishes to withdraw and it is
agreed that she is to take certain furniture and fixtures with second hand value of P50,000 and
note for the balance of her interest. The furniture and fixtures are carried in the books at P65,000.
Brand new, the furniture and fixtures may cost P80,000. UNI'S acquisition of the second-hand
furniture will result to:

A) Reduction in capital of P10,000 for UNI.


B) Reduction in capital of P15,000 each for HAR and ALV.
C) Reduction in capital of P5,000 each for HAR, ALV and UNI.
D) Reduction in capital of P7,500 each for HAR and ALV.
9. On December 31, 2020 the condensed statement of financial position of TD Partnership is
presented below:

Total Assets 180,000

Nuna, Loan 10,000


Nuna, Capital 45,000
Jessi, Capital 40,000
Edawn, Capital 85,000
Total Liabilities and Capital 180,000

NUNA, JESSI and EDAWN share profits and losses in the ratio of 3:2:1 respectively, It was agreed
among the partners that NUNA retires from the partnership and the partnership's assets to be
adjusted to their fair value of P210,000. The partners further agreed to pay NUNA P64,000 cash
for her total interest in the partnership.

What is the capital balance of EDAWN after the retirement of NUNA?

10. REVE, ARMY and ONCE were partners with capital balances on January 2, 2020 of P300,000,
P200,000 and P100,000, respectively. On July 1, 2020 REVE retires from the partnership. On the
date of retirement the partnership net loss is P60,000 and the partners agreed that certain asset
is to be revalued at P80,000 from its original cost of P50,000. The partners agreed further to pay
REVE P225,000 in settlement of her interest. The remaining partners continue to operate under
a new partnership, SM partnership.

What is the total capital of SM partnership?

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