AC FAR-QUIZ9 PDF

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Summary

1. Luz, Vi, and Minda are partners with capital balances, as of December 31, 2011, of P300,000,P300,000, and P200,000, respectively, and who share profits and losses equally. Minda wishesto withdraw, and it is agreed that she is to take certain furniture items, with a second-hand valueof P50,000, an...

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1. Luz, Vi, and Minda are partners with capital balances, as of December 31, 2011, of P300,000,

P300,000, and P200,000, respectively, and who share profits and losses equally. Minda wishes to withdraw, and it is agreed that she is to take certain furniture items, with a second-hand value of P50,000, and a note for the balance of her interest. The furniture items are carried in the books at P65,000; brand new, however, they would cost P80,000. The value of the note that Minda would get is: a. P120,000 c. P145,000 b. P135,000 d. P150,000 The value of the note that Minda would get is P145,000, computed as follows: Minda’s capital P200,000 Less: Charges for: Second-hand value of asset taken P50,000 Share of loss on asset taken: (P65,000 – P50,000) x 1/3 5,000 Total charges against Minda’s capital 55,000 Value of the note to be issued to Minda P145,000

2. The condensed balance sheet of the partnership of Tic, Tac and Toe as

Net assets

P 400,000

Tic, capital (50%) P 200,000 Tac, capital (30%) 120,000 Toe, capital (20%) 80,000 Total capital P 400,000 As of said date, Tic retired from the partnership. Per agreement, Tic was paid P225,000 for his interest and the goodwill implied from the settlement was recorded. After Tic’s retirement, the partnership’s “net assets” was:

a. b. c. d.

P175,000 P200,000 P225,000 P250,000 After Tic’s retirement, the partnership’s “net assets” was P225,000, computed as follows: Net assets, before Tic’s retirement Implied goodwill: (P225,000 – P200,000) / 50% Adjusted net assets Less: Payment to Tic Net assets, after Tic’s retirement

P400,000 50,000 P450,000 225,000 P225,000

3. Juan, Pedro, and Pablo are partners who share profits and losses in a 5:3:2 ratio and, on

January 1, 2011, have capital balances of P90,000, P160,000, and P200,000, respectively. Pablo withdrew from the partnership on July 1, 2011 and the partners agreed that, as of this date, certain inventory items would have to be revalued at P70,000 from their recorded cost of P50,000. For the sixth month period ending June 30, 2011, the partnership realized a net income of P130,000. The partners decided that Pablo should be paid P145,000 for his interest

and the remaining partners’ capital accounts should be adjusted for any goodwill resulting from the settlement. The payment to Pablo included goodwill of: a. P15,000 c. P42,500 b. P25,000 d. P50,000 The payment to Pablo included a goodwill of P15,000, computed as follows: Payment for Pablo’s interest Less: Pablo’s interest just his withdrawal: January 1 Capital Add: Share in: Inventory write-up: P20,000 x 20% Net income to 6/30: 130,000 x 20% July 1 capital just before withdrawal Goodwill included in payment to Pablo

P245,000 P200,000 4,000 26,000 230,000 P 15,000

4. Hugo, Ivan, and Juni are partners sharing profits and losses in the respective ratio of 3:3:4. Juni

is given permission to retire effective May 31, 2011, and it was agreed that settlement is to be made by the remaining partners making payments from their personal funds. The capital balances o this date are P30,000, P25,000 and P45,000 for Hugo, Ivan, and Juni, respectively. If Juni received P45,000, how much did Hugo pay Juni?

a. b. c. d.

P13,500 P18,000 P22,500 P45,000 If Juni received P45,000, Hugo pay Juni the amount of P22,500, computed as follows: (P45,000 x ½)

P22,500

5. Karen, Karmi, and Kathy are partners sharing profits in the respective ratio of 2:3:5. On May 31,

2011, Kathy opted to retire. The capital account balances, at this time, are P95,000, P140,000, and P135,000, respectively. Assuming that Kathy is paid P132,000, Karen would be credited:

a. b. c. d.

P 600 P 857 P1,200 P1,800 Assuming the Kathy is paid P132,000, Karen would be credited in the amount of P1,200, computed as follows: (P135,000 –P132,000) x 2/5 P1,200

6. ANA, MAE, and RAE share partnership profits and losses in the ratio of 2:3:5, respectively. On

October 31, 2011, RAE was permitted to withdraw from the partnership at which time their capital balances were: Ana, capital Mae, capital Rae, capital

P25,000 40,000 35,000

If RAE is paid P39,000 in full payment of her interest, the capital of ANA immediately after RAE’s withdrawal would be:

a. b. c. d.

P22,600 P23,000 P23,400 P26,600 If Rae is paid P39,000 in full payment of her interest, the capital of Ana immediately after Rae’s withdrawal would be P23,400, computed as follows: Amount paid to Rae P39,000 Less: Rae’s capital balance 35,000 Bonus to Rae from Ana and Mae P 4,000 Ana’s capital balance before Rae’s retirement Less: Share in bonus to Rae (P4,000 x2/5) Ana’s capital balance after Rae’s retirement

P25,000 1,600 P23,400

7. The condensed balance sheet of the partnership of Ken Sy and Ben Ty as of December 31,

2011 showed the following: Total assets Total liabilities Ken Sy, capital Ben Ty, capital

P200,000 40,000 80,000 80,000

On this date, the partnership was dissolved and its net assets were transferred to a newly-formed corporation. The fair value of the assets was P24,000 more than the carrying value of the firm’s books. Each of the partners was issued 10,000 shares of the corporation’s P1 par common stock. Immediately after effecting the transfer of the net assets, and the issuance of stock, the corporation’s additional paid in capital account would be credited for:

a. b. c. d.

P136,000 P140,000 P154,000 P164,000 Immediately after effecting the transfer of the net assets, and the issuance of stock, the corporation’s additional paidin capital account would be credited for P164,000, computed as follows: Fair value of partnership’s net assets: P224,000 – P40,000 P184,000 Less: Par value of stock issued to partners: (10,000 x P1) x 2 20,000 Additional paid-in capital in excess of par P164,000

8. Mac, Kuh, and Nat, partners sharing profits and losses equally, decided to form a corporation.

They have capital balances, respectively, ofP100,000, P100,000, and P200,000, and all of their assets and liabilities will be transferred to the corporation. Their net assets will be revalued from P400,000 to P550,000, with the substantial revaluation due to land which was originally contributed by Nat at P100,000. At P10 par value, the partners are to receive shares of stock as follows: a. 10,000, 10,000, and 35,000, respectively

b. 12,500, 12,500, and 30,000, respectively c. 15,000, 15,000, and 25,000, respectively d. 18,333, 18,333, and 18,334, respectively The partners are to receive shares of stock, at P10 par value, equal to 15,000, 15,000, and 25,000, respectively, computed as follows: Mac Kuh Nat Reported capital balances P100,000 P100,000 P200,000 Share in assets write-up, P150,000, equally 50,000 50,000 50,000 Total par value of shares to be received by each partner P150,000 P150,000 P250,000 Shares to be received by each partner, at P10 par value/share 15,000 15,000 25,000

9. Partners Rob and Roy, who share equally in profits and loses, have the following balance sheet

as of December 31, 2011: Cash A/receivable M/Inventory

P120,000 A/Payable 100,000 Accum. Dep’n. 140,000 Rob, capital

Equipment

Total

80,000 Roy, capital

P440,000 Total equities

P172,000 8,000 140,000 120,000

P440,000

They agreed to incorporate their partnership, with the new corporation absorbing the net assets after the following adjustments: provision of allowance for bad debts of P10,000; statement of the inventory at its current fair value of P160,000; and, recognition of further depreciation on the equipment of P3,000. The corporation’s capital stock is to have a par value of P100, and the partners are to be issued corresponding total shares equivalent to their adjusted capital balances. The total par value of the shares of capital stock that were issued to partners Rob and Roy was:

a. b. c. d.

P260,000 P267,000 P273,000 P280,000 Capital of partnership before adjustment P260,000 Add (deduct) adjustments: Bad debts provision ( 10,000) Increase in inventory 20,000 Depreciation ( 3,000) Adjusted capital equal to shares’ par value P267,000

10. Mac, Kuh, and Nat, partners sharing profits and losses equally, decided to form a corporation.

a. b. c. d.

They have capital balances, respectively, of P100,000, P100,000, and P200,000, and all of their assets and liabilities will be transferred to the corporation. Their net assets will be revalued from P400,000 to P550,000, with the substantial revaluation due to land which was originally contributed by Nat at P100,000. At P10 par value, the partners are to receive shares of stock as follows: 10,000, 10,000, and 35,000, respectively. 12,500, 12,500, and 30,000, respectively. 15,000, 15,000, and 25,000, respectively. 18,333, 18,333, and 18,334, respectively.

Mac Kuh Nat Total Capital before adjustment P100,000 P100,000 P200,000 P400,000 Add adjustment for increase in net assets (P550,00-P400,000)/3 50,000 50,000 150,000 Capital after adjustment P150,000 P150,000 P250,000 Divided by peso par value per share 10 10 10 Number of shares received 15,000 15,000

50,000

P550,000 10 25,000 55,000...