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Cortez admits Divine for a partnership interest in his business. The statement of financial position of Cortez on November 20, 2017 prior to the admission of Divine shows the following: (in piso) Debit Credit Cash? Accounts Receivable 144, Merchandise Inventory 216, Accounts Payable 74, Cortez Capit...

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Cortez admits Divine for a partnership interest in his business. The statement of financial position of Cortez on November 20, 2017 prior to the admission of Divine shows the following: (in piso) Debit Cash Accounts Receivable

Credit

? 144,000

Merchandise Inventory

216,000

Accounts Payable

74,400

Cortez Capital

?

It is agreed that for purposes of establishing Cortez’s interest, the following adjustments should be made: 1. An allowance for doubtful accounts of 2% of accounts receivable is to be established. 2. The merchandise inventory is to be valued at 240,000. 3. Prepaid expenses of 7,800 and accrued expenses of 4,800 are to be recognized. Divine invested cash of 170,460 to give him a one-third interest in the total capital of the firm.

What is the unadjusted capital balance of Cortez before the admission of Divine? Adjusted Total Capital = 170,460 / (1/3) = 511,380 Cortez’s Interest = 511,380 * (2/3) = 340,920 Cash = Cortez’s Interest + Accrued Exp + Accounts Pay. – Prepaid Exp – Merch Inventory – (A. Receivable*2% Allowance) 340,920 + 4,800 + 74,400 – 7,800 – 240 – (144,000*2%) = 31,200 Unadjusted Cortez Capital = 31,200 + 144,000 + 216,000 – 74,400 = 316,800

Cortez admits Divine for a partnership interest in his business. The statement of financial position of Cortez on November 20, 2017 prior to the admission of Divine shows the following: (in piso) Debit Cash Accounts Receivable

Credit

? 144,000

Merchandise Inventory

216,000

Accounts Payable

74,400

Cortez Capital

?

It is agreed that for purposes of establishing Cortez’s interest, the following adjustments should be made: 1. An allowance for doubtful accounts of 2% of accounts receivable is to be established. 2. The merchandise inventory is to be valued at 240,000. 3. Prepaid expenses of 7,800 and accrued expenses of 4,800 are to be recognized. Divine invested cash of 170,460 to give him a one-third interest in the total capital of the firm.

What is the total assets of the firm after the formation? Adjusted Total Capital = 170,460 / (1/3) = 511,380 Total Assets = Total Capital + Total Liabilities 511,380 + 4,800 + 74,400 = 590,580

He refers to a partner who contributed not only money and property but also industry to the newly formed partnership. Capitalist Partner Nominal partner Industrial partner Capitalist-industrial partner A business owned by C was short of cash and C decided to form a partnership with D and E, D was able to contribute cash thrice the interest of C in the partnership while E was able to contribute cash twice the interest of D in the partnership. The assets contributed by C were as follows: Cash P9,000; Accounts Receivable P189,000; with allowance for doubtful account of P6,000; Inventory P105,000; and Store Equipment of P150,000 with accumulated depreciation 15,000 but with current worth of P 125,000 and agreed value of P100,000. C, D and E agreed that the allowance for doubtful accounts was inadequate and should be P10,000. They also agreed that the fair value of the inventory is P460,000. How much did E invest? C’s Contribution = 9,000 + 189,000 – 10,000 + 460,000 + 100,000 = 748,000 D’s Contribution = 748,000 * 2 = 1,496,000 E’s Contribution = 1,496,000 * 3 = 4,488,000 A business owned by C was short of cash and C decided to form a partnership with D and E, D was able to contribute cash thrice the interest of C in the partnership while E was able to contribute cash twice the interest of D in the partnership. The assets contributed by C were as follows: Cash P9,000; Accounts Receivable P189,000; with allowance for doubtful account of P6,000; Inventory P105,000; and Store Equipment of P150,000 with accumulated depreciation 15,000 but with current worth of P 125,000 and agreed value of P100,000. C, D and E agreed that the allowance for doubtful accounts was inadequate and should be P10,000. They also agreed that the fair value of the inventory is P460,000. The total assets of the partnership after the formation? C’s Contribution = 9,000 + 189,000 – 10,000 + 460,000 + 100,000 = 748,000 D’s Contribution = 748,000 * 3 = 2,244,000 E’s Contribution = 2,244,000 * 2 = 4,488,000 Total Assets = 748,000 + 2,244,000 + 4,488,000 = 7,480,000

Which of the following statements concerning the formation of partnership business is correct? The capital to be credited to each partner upon formation may not be the amount actually contributed by each partner. The juridical personality of the partnership arises from the issuance of certification of registration. Philippine Financial Reporting Standards (PFRS) allows recognition of goodwill arising from the formation of the partnership. The parties may become partners only upon contribution of money or property but not industry or service.

Adam, a partner in the AB Partnership, has a 40% participation in the partnership profits and losses. A Adam’s capital account has a net decrease of P60,000 during the year 2017. During 2017, Adam withdraw P130,000 (charged against his capital account) and contributed property valued at P50,000 to the partnership. What was the net income of AB partnership for 2017? Profit Share = 50,000 – 130,000 + 60,000 = 20,000 Net Income = 20,000 / 40% = 50,000

Angel and Van decide to combine their businesses and form a partnership on July 1, 2017. The following are their assets and liabilities on July 1, 2017 before formation: (in Piso) Angel

Van

Assets

421,500

206,000

Liabilities

183,000

72,000

The following agreements are made to adjust assets and liabilities: 1. Both partners will provide 10,000 allowance for doubtful accounts. 2. Angel’s fixed assets were over-depreciated by 2,000 and Van’s fixed assets were underdepreciated by 1,000. 3. Accrued expenses are to be recognized in the books of Angel and Vanin the amount of 2,400 and 2,000, respectively. 4. Obsolete inventory to be written off by Angel amounts to 7,000. 5. Angel and Van also agreed to share profits and losses equally. How much is the total assets of Partnership upon formation? 601,500 The partners agreed that their capital balances upon formation will be in conformity with their profit and loss ratio, using the transfer of the capital method, Van’s capital will be credited in the amount of? 50,050

On July 1, 2018, D and J formed FT Partnership organized to train prospective professional basketball players with initial investment of 1M and 2M respectively. D is appointed as the managing partner. The articles of co-partnership provide that profit or loss shall be distributed accordingly: 30% interest on original capital contribution ratio Monthly salary of P20,000 and P10,000 respectively for D and J. D shall be entitled of bonus equivalent to 20% of the net income after interest, salary and bonus. The remainder shall be distributed in ration of 3:2 for D and J respectively. For the year ended December 31, 2018, the partnership reported net income of P750,000. What is the share in the net income of D for the year ended December 31, 2018? 350,000 On July 1, 2018, D and J formed FT Partnership organized to train prospective professional basketball players with initial investment of 1M and 2M respectively. D is appointed as the managing partner. The articles of co-partnership provide that profit or loss shall be distributed accordingly: 30% interest on original capital contribution ratio Monthly salary of P20,000 and P10,000 respectively for D and J. D shall be entitled of bonus equivalent to 20% of the net income after interest, salary and bonus. The remainder shall be distributed in ration of 3:2 for D and J respectively. For the year ended December 31, 2018, the partnership reported net income of P750,000. What is the share in the net income of J for the year ended December 31, 2018? 400,000

Under the generally accepted accounting principles in the Philippines, what is the acceptable reason when the amount credited to a partner is greater than the amount actually contributed by such partner during partnership formation? When there is bonus given by said partner to the other partners. Recognition of goodwill by virtue of special skills or reputation of said partner. Recognition of impairment loss on the property contributed by said partner. Receipt of transfer of capital from other partner by virtue of partner’s agreement resulting to bonus to said partner.

A, B and C are partners in an accounting firm. Their capital account balances at December 31, 2017 were: A, P90,000; B P110,000; C, P50,000. They share profits and losses in 4:4:2 ratio, after the following special terms: 1. Partner C is to receive a bonus of 10% of the net income after the bonus. 2. Interest of 10% shall be paid on that portion of partners’ capital in excess of P100,000. 3. Salaries of P10,000 and P12,000 shall be paid to partners A and C, respectively. The income summary account for the year 2017 shows a credit balance of P44,000. What is the profit share of partner C? Net Income = 44,000 – 4,000 – 22,000 – 1,000 = 17,000 C’s Share of Net Income = 17,000 * 20% = 3,400 C’s Profit Share = 12,000 + 3,400 + 4,000 19,400

Which of the following will decrease the capital balance of a partner? Advances made by a partner to the partnership. Receipt of share in revaluation surplus form a partnership PPE. Share in partnership profit Drawing made by a partner

On December 1, 2020, S sold and delivered to B a Washing machine for P35,000 "on sale or return" giving B up to December 28, 2020 within which to return the Washing machine. On December 15, 2020, the washing machine was destroyed without fault on the part of B. Based on the foregoing, which of the following statements is not correct? B must pay the price of the washing machine. The ownership of the Washing Machine was transferred to B upon delivery to him. B must suffer the loss of the washing machine. S must suffer the loss of the Washing Machine since the time for the return of the washing machine had not yet expired. S and B entered into a contract whereby S transferred to B a specific car for the price of P500,000, while B gave to S P150,000 in cash and a Truck worth P350,000. The heading of the written contract signed by the parties reads "Contract of Sale". The contract is void because the intention of the parties is void since the value of the Truck is more than the monetary consideration given. The contract is a valid contract of sale as intended by the parties regardless of whether the monetary consideration is more or less than the value of the property consideration. The contract is a valid contract of barter since the value of the property given is more than the monetary consideration. The intention of the parties is immaterial. The contract is partly a contract of sale and partly a contract of barter.

The following items pertain to either a contract of sale or a contract to sell. I. The ownership of the thing sold is transferred to the buyer upon delivery. II. The ownership of the thing sold is transferred to the buyer some future time. III. The risk of loss is on the buyer upon delivery. IV. The risk of loss is on the seller upon delivery. Based on the above data, which of the following is correct? Items I and III pertain to a contract to sell. Items II and III pertain to a contract to sell. Items II and IV pertain to a contract of sale. Items I and III pertain to a contract of sale.

A mode of delivery where the seller remains in possession of the property in a different capacity Traditio constitutum possessorium Traditio longa Manu Traditio brevi manu Quasi-tradition Shoe factory produces shoes for the general market of “Excellent shoes” from the size of 6 up to 12. Mr. Carlito went to the shop of Shoe factory and for a particular size of 8 ½ excellent shoes but the same was not available at present. He then places an order for five units to be delivered one week after. The contract is one of: Sale Piece of work Agency to buy Agency to sell

In contract of sale, if the money paid is counterfeit, would the sale be still valid? Yes, because the real consideration or cause is still the value or price agreed upon. No, because there is no consideration since the money paid is counterfeit. No, because this is an absolutely simulated contract and therefore void. Yes, but this can be annulled on the ground of lack of consideration.

Unaccepted unilateral promise or offer to sell or buy a thing: Policitation Precarium Caveat emptor Res ipsa loquitor

On December 1, 2020, S sold to B through a private instrument 500 sacks of rice stored in the only warehouse of S. On December 10, 2020, S delivered the keys to the warehouse to B. The mode of delivery by S to B is known as: constructive delivery by legal formalities. symbolic delivery by traditio clavium. traditio longa manu. traditio brevi manu

As a rule, the expenses for the execution and registration of the sale shall be borne by the? Vendee Vendor Third person Vendor and vendee equally

B bought a particular Honda CRV 2008 on installment plan for P1,000,000 payable as follows: a. Down payment: P200,000 b. Balance: Payable in 60 equal installments As a requirement by the seller, the buyer was required to execute a chattel mortgage on the thing sold. The buyer failed to pay his first installment. The seller has the remedy of: File an action for exact fulfillment Cancel the sale Foreclose the chattel mortgage All of the above

When goods are delivered to the buyer on "sale or return" for a period of thirty (30) days, the ownership of the goods passes to the buyer Upon perfection of the contract. Upon delivery of the goods. Upon expiration of thirty (30) days. When the buyer signifies his acceptance to the seller...