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NAME: Date: Professor: Section: Score:ACCOUNTING FOR SPECIAL TRANSACTIONSFINAL GRADING EXAMINATIONChapter 1 – Partnership Formation 1. A and B agreed to form a partnership. The contributions of the partners are as follows:A BCash 600,Inventory 20, Land 400, Equipment 50,Additional information:  Hal...

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NAME: Pr of e s s or :

Da t e: Sc or e:

Se c t i on:

ACCOUNTI NG FOR SPECI ALTRANSACTI ONS FI NALGRADI NG EXAMI NATI ON

Chapter 1 – Partnership Formation 1 . Aa ndBa gr e e dt of or m apa r t ne r s hi p.Thec ont r i but i onsoft hepa r t ne r sa r easf ol l ows : A 6 0 0, 0 0 0 2 0 , 0 0 0

Ca s h I nve nt or y La nd Equi pme nt

B

4 0 0, 0 0 0 5 0, 0 0 0

Ad di t i o na li nf o r ma t i o n:  Ha l foft hei nve nt or yi sunpa i d. Thepa r t ne r s hi pa gr e e dt oa s s umet her e l a t e da c c ount spa y abl e .  Thel a ndha saf ai rva l ueof₱70 0 , 0 0 0a ndi ss ubj e c tt oamor t ga geof₱1 0 0 , 0 00 . Ho we v e r , Ba gr e e d t os e t t l et hemor t ga gepe r s ona l l y . Ho w muc ha r et hea dj us t e dc a pi t a lc ont r i but i onsofAa ndB,r e s pe c t i ve l y ? a .6 7 0 , 0 00 ; 6 9 0 , 0 0 0 c .6 7 0 , 0 0 0; 7 0 0 , 0 0 0 b .6 6 0 , 0 00 ; 7 0 0 , 0 0 0 d. 6 7 0, 0 0 0 ; 6 0 0, 0 0 0 So l ut i o n: A Ca s h I nve nt or y La nd Equi pme nt Ac c ount spa yabl e( 20, 000x½) Adj us t e dc api t albal anc e s

B 600 , 000 20 , 000 700 , 000

50, 000 ( 10, 000 ) 660 , 000

700 , 000

2 . Aa ndBf or me dapa r t ne r s hi p. Thef ol l owi nga r et he i rc ont r i but i ons :

Ca s h Ac c ount sr e c e i va bl e Equi pme nt To t a l A, c a pi t a l B, c a pi t a l To t a l

A 4 0 0 , 0 00 1 0 0 , 0 00 5 0 0 , 0 00

B 7 0 0 , 0 00 7 0 0 , 0 00

50 0 , 0 0 0 5 0 0, 0 0 0

7 0 0 , 0 00 7 0 0, 0 0 0

Ad di t i o na li nf o r ma t i o n:  Thea c c ount sr e c e i va bl ei nc l ude sa₱3 0, 0 0 0a c c ountt ha ti sde e me dunc ol l e c t i bl e .

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

Thee qui pme nti so ve r de pr e c i a t e d by ₱5 0 , 0 00 .Thee qui pme ntwasobt ai ne d by B t hr ough fina nc i ng.Ther e l a t e dl oanpa ya bl eha sa nunpai dba l a nc eof₱25 0 , 0 0 0whi c ht hepar t ne r s hi p a s s ume sonr e pa yi ng.

Whi c hpar t ne rha st hehi ghe rc a pi t a lc r e di t , a ndhow muc h? a . A, ₱4 7 0, 0 0 0 c .A, ₱5 00 , 0 0 0 b . B, ₱5 0 0, 0 0 0 d. B, ₱4 00 , 0 0 0

So l ut i o n:

Ca s h Ac c ount sr e c e i va bl e ( 1 0 0 K–3 0K)

A 4 0 0 , 0 0 0

B -

Par t ne r s hi p 4 0 0 , 0 0 0

70 , 0 0 0

-

7 0 , 0 0 0

4 7 0, 0 0 0

7 5 0 , 0 0 0 ( 2 5 0 , 00 0 ) 5 0 0 , 0 0 0

7 50 , 0 0 0 ( 2 5 0 , 00 0 ) 9 7 0 , 0 0 0

Equi pme nt ( 7 0 0 K+5 0K)

Loa npa ya bl e Ne tc o nt r i b ut i o ns

3 . Unde rt hebonusme t hod, t hea s s e tc ont r i but i onoft hepar t ne rr e c e i vi ngabonusi sde bi t e d a .a tf a i rva l ue . b .a ta ni nc r e a s e da mountwi t hac or r e s pondi ng de c r e a s et ot he ot he r pa r t ne r s ’a s s e t c ont r i but i ons . c .a t a de c r e a s e da mount wi t hac or r e s pondi ng i nc r e a s et ot he ot he r pa r t ne r s ’a s s e t c ont r i but i ons . d. borc , de pe ndi ngonwhi c hpar t ne ri sr e c e i vi ngt hebonus .

Chapter 2 – Partnership Operations 4 . Aa ndBf or me dapa r t ne r s hi p. Thepa r t ne r s hi pa gr e e me nts t i pul a t e st hef ol l o wi ng:  Annua ls a l a r yal l o wa nc e sof₱80 , 0 0 0f orAa nd₱40 , 0 0 0f orB.  Thepa r t ne r ss ha r ei npr ofit sa ndl os s e se qua l l y . Thepa r t ne r s hi pe a r ne dpr ofitof₱10 0 , 0 0 0 . How muc hi st hes ha r eofB? a .7 0 , 0 0 0 c .4 8 , 0 00 b .3 0 , 0 0 0 d. 5 2, 0 0 0 So l ut i o n: A Amountbe i ngal l oc a t e d Al l o c a t i o n: 1 . Sa l ar i e s 2 . Al l oc a t i onofr e mai ni ngl os s ( 1 00 Kpr ofit–1 20 Ks a l a r i e s )=2 0K ( 2 0x50 %) ;( 2 0Kx5 0%)

Asa l l o c a t e d

B

8 0 , 0 0 0

4 0, 0 0 0

( 1 0 , 0 0 0 ) 7 0 , 0 0 0

( 1 0, 0 0 0 ) 3 0, 0 0 0

Tot al 1 0 0 , 0 00 1 2 0 , 0 00 ( 2 0 , 0 00 ) 1 0 0 , 0 00

5 . Aa ndBf or me dapa r t ne r s hi p. Thepa r t ne r s hi pa gr e e me nts t i pul a t e st hef ol l o wi ng:  Annua ls a l a r yal l o wa nc e sof₱10 , 0 0 0f orAa nd₱40 , 0 0 0f orB.

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 

Bonust oAof1 0 % oft hepr ofitaf t e rpa r t ne r ’ ss a l ar i e sbutbe f or ebonus . Thepa r t ne r ss ha r epr ofit sa ndl os s e sona6 0 : 4 0r a t i o.

Dur i ngt hepe r i odt hepar t ne r s hi pi nc ur r e dal os sof₱2 0 , 0 0 0be f or ede duc t i onf ors a l a r i e s .Bywha t a mountdi dB’ sc a pi t a lac c ountc hange ? a .I nc r e a s e dby₱12 , 0 0 0 c .I nc r e a s e dby₱3 2 , 0 00 b . De c r e a s e dby₱1 2 , 0 0 0 d. De c r e a s e db y₱3 2 , 0 0 0

So l ut i o n: A Amountbe i ngal l oc a t ed Al l o c a t i o n: 1. Sal ar i e s 2. Bonus 3. Al l oc a t i onofr e mai ni ngl os s ( –20K–50K)=70K ( 70Kx60%) ; ( 7 0Kx40%) Asa l l o c a t e d

10, 00 0 -

( 42, 000 ) ( 32, 000)

B

Tot al ( 20, 00 0)

40 , 000 -

50, 000 -

( 28, 000 ) 12, 000

( 70, 000) ( 20, 00 0)

6 . Aa ndBf or me dapa r t ne r s hi p. Thepa r t ne r s hi pa gr e e me nts t i pul a t e st hef ol l o wi ng:  Annua ls a l a r yal l o wa nc e sof₱10 , 0 0 0f orAa nd₱40 , 0 0 0f orB.  Bonust oAof1 0 % oft hepr ofitaf t e rpa r t ne r ’ ss a l ar i e sbutbe f or ebonusa ndi nt e r e s t .  I nt e r e s tof1 2% ont hebe gi nni ngc a pi t alba l a nc eofA.  Thepa r t ne r ss ha r epr ofit sa ndl os s e sona6 0 : 4 0r a t i o. Dur i ng t hepe r i od t hepar t ne r s hi pe a r ne d pr ofitof₱2 00 , 0 0 0be f or ede duc t i on f ors a l a r i e s .B’ s be gi nni ngc a pi t a lba l anc ewa s₱6 0 , 0 00 . How muc hi st hes har eofAi nt hepr ofit ? a .1 0 1 , 6 80 c .1 1 0 , 8 2 0 b .9 8 , 3 2 0 d. 9 6, 7 2 0 A Amountbe i ngal l oc a t ed Al l o c a t i o n: 1. Sal ar i e s 2. Bonus( 200K–50K)x10% 3. I nt e r e s tonc a pi t a l( 60Kx12 %) 3. Al l oc a t i onofr e mai ni ngl os s ( . 2M –50K–15 K–7. 2K)=127. 8K ( 127 . 8Kx60%) ; ( 127. 8Kx40%) Asa l l o c a t e d

B

Tot al 20 0, 00 0

10, 00 0 15 , 000

40 , 000 7, 200

50, 000 15 , 000 7, 200

76, 680 101, 680

51 , 120 98 , 320

127, 80 0 2 00, 000

7 . Aa ndBf or me dapa r t ne r s hi p. Thepa r t ne r s hi pa gr e e me nts t i pul a t e st hef ol l o wi ng:  Fi r s t ,As ha l lr e c e i ve2 % ofpr ofitupt o₱2 0 0, 0 0 0a nd5 %o ve r₱2 0 0, 0 0 0 .  Se c ond, Bs hal lr e c e i ve1 % oft her e mai ni ngpr ofitove r₱2 0 0 , 0 00 .  Anyr e ma i nde rs ha l lbes ha r e de qua l l y . Dur i ngt heye ar ,t hepa r t ne r s hi pe a r ne dpr ofitof₱5 0 0, 0 0 0 . Ho w muc hi st hes har eofAi nt hepr ofit ?

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a .2 5 8 , 0 95 b .2 6 8 , 8 85

c .2 4 1 , 0 9 5 d. 2 4 1, 9 0 5

So l ut i o n: A

B

Tot al 500, 00 0

Amountbe i ngal l oc a t ed Al l o c a t i o n: 1. Bonust oA 4, 000 15, 000

Fi r s t2 00 K:( 20 0Kx2 %) Ove r2 0 0K:[ ( 5 0 0K-2 00 K)x5%]

4, 000 15, 000

2. Bonust oB 2, 810

2, 810

23 9, 09 5 24 1, 90 5

478 , 190 500 , 000

( 5 0 0K-4 K-1 5K–2 0 0 K)x1 %

3. Al l oc a t i onofr e mai ni ngpr ofit 23 9, 095 25 8, 095

( 5 0 0K-4 K-1 5K-2 . 81 0K)÷2

Asa l l o c a t e d

8 . A, BandCf or me dapa r t ne r s hi p. Thepa r t ne r s hi pa gr e e me nts t i pul a t e st hef ol l owi ng:  Annua ls a l a r yal l o wa nc e sof₱10 0 , 0 0 0f orAand₱2 0, 0 0 0f orB.  1 0 %i nt e r e s tont hebe gi nni ngc a pi t a lbal a nc eofC.  Thepa r t ne r ss ha r ei npr ofit sa ndl os s e sona4 0: 4 0 : 2 0r a t i o. Thepa r t ne r s hi pe ar ne d pr ofitof₱5 0 0 , 0 0 0.C’ sc api t a la c c ounthad abe gi nni ng ba l a nc eof ₱3 0 0 , 0 00 . Thedi ffe r e nc ebe t we e nt hea mount sr e c e i ve dbyAandBi s a .1 6 0 , 0 00 . c .8 0, 0 0 0 . b .2 4 0 , 0 00 . d. 6 0, 0 0 0 . So l ut i o n: A( 4 0 %) Amountbe i ngal l oc a t ed Al l o c a t i o n: 1. Sal ar i e s 2. I nt e r e s tonc a pi t a l( 3 0 0Kx10 %) 3. Al l oc a t i onofr e mai ni ngl os s ( 5 00 K–12 0 K–30 K)=3 50 K

Asa l l o c a t e d

100 , 000

B( 4 0%)

C( 2 0% )

20 , 000 30 , 000

140, 000 240, 000

14 0, 00 0 16 0, 00 0

7 0, 00 0 10 0, 00 0

Ans we r : 24 0 , 0 0 0–1 6 0 , 0 0 0=8 0 , 0 0 0di ffe r e nc e 9 . Aa ndBf or me dapa r t ne r s hi p. Thepa r t ne r s hi pa gr e e me nts t i pul a t e st hef ol l o wi ng:  Annua ls a l a r yal l o wa nc e sof₱80 , 0 0 0f orAa nd₱40 , 0 0 0f orB.  Thepa r t ne r ss ha r ei npr ofit sa ndl os s e se qua l l y . Thepa r t ne r s hi pe a r ne dpr ofitof₱10 0 , 0 0 0af t e rs a l a r i e s . How muc hi st hes ha r eofB? a .7 0 , 0 0 0 c .1 3 0 , 0 0 0 b .3 0 , 0 0 0 d. 9 0, 0 0 0 So l ut i o n: Pr ofitbe f or es a l a r i e s=1 00 , 0 0 0+8 0 , 0 0 0+40 , 0 0 0=22 0 , 0 0 0

Tot al 50 0, 00 0 120, 00 0 3 0, 00 0 350, 00 0 20 0, 00 0

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A Amountbe i ngal l oc a t e d Al l o c a t i o n: 1 . Sa l ar i e s 2 . Al l oc a t i onofr e mai ni ngp r o fit ( 2 20 Kpr ofit–1 20 Ks a l a r i e s )=1 00 K ( 1 00 Kx50 %) ;( 1 00 Kx50 %)

Asa l l o c a t e d

B

8 0 , 0 0 0

4 0, 0 0 0

5 0 , 0 0 0 1 3 0 , 0 0 0

5 0, 0 0 0 90 , 0 0 0

Tot al 2 2 0 , 0 00 1 2 0 , 0 00 1 0 0 , 0 0 0 2 2 0 , 0 00

1 0 .AandBf or me dapa r t ne r s hi p. Thepar t ne r s hi pa gr e e me nts t i pul a t e st hef ol l o wi ng:  Mont hl ys a l a r ya l l owanc e sof₱1 0, 0 0 0f orA and₱4 , 0 0 0f orB.Thes a l a r i e sa r er e c ogni z e da s e xpe ns e s .  Thepa r t ne r ss ha r ee qual l yi npr ofit sa ndl os s e s . Thepa r t ne r s hi pe a r ne dpr ofitof₱36 0 , 0 0 0 . How muc hi st hes ha r eofA? a .3 0 0 , 0 00 c .1 4 8 , 0 0 0 b .2 2 8 , 0 00 d. 1 2 8, 0 0 0 So l ut i o n: Annuals al ar i e s :  A: ( 1 0, 0 0 0x1 2mont hs )=1 2 0 , 0 0 0  B: ( 4, 0 0 0x1 2mont hs )=48 , 0 0 0 Pr ofitbe f or es a l a r i e s=3 60 , 0 0 0+1 2 0, 0 0 0+4 8 , 0 0 0=5 28 , 0 0 0 A Amountbe i ngal l oc a t e d Al l o c a t i o n: 1 . Sa l ar i e s 2 . Al l oc a t i onofr e mai ni ngp r o fit ( 5 28 Kpr ofit–1 68 Ks a l a r i e s )=3 60 K ( 3 60 Kx50 %) ;( 3 60 Kx50 %)

Asa l l o c a t e d

B

1 2 0 , 0 0 0

48 , 0 0 0

1 8 0, 0 0 0 3 0 0 , 0 0 0

1 8 0 , 0 0 0 22 8 , 0 0 0

Tot al 5 2 8 , 0 00 1 6 8, 0 0 0 3 6 0 , 0 00 5 2 8 , 0 00

1 1 .AandBs ha r ee qua l l yi npa r t ne r s hi ppr ofit sa ndl os s e s . Dur i ngt heye ar ,A’ sc api t a la c c ountha sa ne ti nc r e as eof₱5 0 , 0 00 .Pa r t ne rA ma dec ont r i but i onsof₱1 0, 0 0 0a ndc a pi t alwi t hdr a wa l sof ₱6 0 , 0 0 0dur i ngt heye ar . Ho w muc hwa st hepa r t ne r s hi ppr ofitf ort heye ar ? a .1 8 0 , 0 00 c .2 1 0 , 0 0 0 b .2 0 0 , 0 00 d. 4 8 0, 0 0 0 So l ut i o n: St e p1 : A, Ca p i t a l Wi t hdr a wa l s

6 0 , 0 0 0

e nd.

5 0 , 0 0 0

1 0 , 0 0 0 ?

be g . Addi t i ona li nve s t me nt S har ei npr ofit

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St e p2 : A, Ca p i t a l Wi t hdr a wa l s

6 0 , 0 0 0

e nd.

5 0 , 0 0 0

be g .

1 0 , 0 0 0 Addi t i ona li nve s t me nt 1 0 0 , 0 0 0 Shar ei npr ofit( s que e z e )

St e p3 : 10 0 , 0 0 0÷5 0% =2 0 0 , 0 00

1 2 .AandBf or me dapa r t ne r s hi p. Thepar t ne r s hi pa gr e e me nts t i pul a t e st hef ol l o wi ng:  Annua ls a l a r yal l o wa nc eof₱1 0 0 , 0 00f orA, t hemana gi ngpar t ne r .  1 0 % bonust oAaf t e rs a l a r i e sbutbe f or ede duc t i onf ort hebonus .  Thepa r t ne r ss ha r ei npr ofit sa ndl os s e se qua l l y . Thes ha r eofA i nt hepa r t ne r s hi ppr ofitdur i ngt hepe r i odwa s₱5 9 5 , 0 00 ,i nc l udi ngabonusof ₱9 0 , 0 0 0. How muc hwa st hes har eofB? a .3 8 6 , 0 00 c .4 0 5 , 0 0 0 b .3 9 8 , 0 00 d. 5 0 4, 0 0 0

So l ut i o n: St e p1 : A Amountbe i ngal l oc a t ed Al l o c a t i o n: 1. Sal ar yofA 2. Bonus 3. Al l oc a t i onofr e mai ni ngpr ofit

Asa l l o c a t e d

B

10 0, 00 0 90 , 000

? 595 , 000

Tot al ? 10 0, 00 0 90 , 000

? ?

? ?

B

Tot al ?

St e p2 : A Amountbe i ngal l oc a t ed Al l o c a t i o n: 1. Sal ar yofA 2. Bonus 3. Al l oc a t i onofr e mai ni ngpr ofit

Asa l l o c a t e d ( a)

5 9 5 , 0 0 0–1 0 0 , 0 00–9 0 , 0 0 0=4 0 5 , 0 00

10 0, 00 0 90 , 000

( a) 40 5, 00 0 595 , 000

10 0, 00 0 90 , 000

? ?

? ?

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St e p3 : A Amountbe i ngal l oc a t ed Al l o c a t i o n: 1. Sal ar yofA 2. Bonus 3. Al l oc a t i onofr e mai ni ngpr ofit

Asa l l o c a t e d

B

10 0, 00 0 90 , 000

40 5, 00 0 595 , 000

Tot al ? 10 0, 00 0 90 , 000

( c ) 405, 000 ( d) 405 , 000

810 , 000(b) ?

( b)

4 0 5 , 0 0 0÷50 % =8 1 0 , 0 0 0 810, 00 0x50% =405 , 000 ( d) e qualt o(c) ( c )

Chapter 3 – Partnership Dissolution Us et h ef o l l o wi ngi nf o r ma t i o nf o rt h ene x te i g h tq ue s t i o ns : Thepa r t ne r s ’c a pi t a lac c ount si n AB Pa r t ne r s hi p be f or et hea dmi s s i on ofane w pa r t ne ra r ea s f ol l ows : Capi t alac c ount s A, Ca pi t a l 2 0 0 , 0 0 0 B, Ca pi t a l 1 2 0 , 0 0 0 3 2 0 , 0 00

P/ Lr at i os 6 0 % 4 0 %

1 3 .C pur c ha s e s20 %i nt e r e s ti nt hepar t ne r s hi pf r om A f or₱1 2 0, 0 0 0 .How muc hi st hec api t a l ba l anc eofAa f t e rt hea dmi s s i onofC? a .1 3 3, 3 3 3 c . 9 6 , 0 0 0 b. 2 4 , 0 0 0 d. 1 4 8, 0 0 0 ( 2 0 0, 0 0 0x4 0 %/6 0 %)=1 3 3 , 3 33 1 4 .C pur c ha s e s2 0% i nt e r e s ti nt hepa r t ne r s hi ppr opor t i ona t e l yf r om A a ndBf or₱1 2 0 , 0 0 0 .How muc hi st hega i norl os sr e c or de di nt hepa r t ne r s hi pbooks ? a .4 8, 0 0 0 c .6 0 , 0 00 b. 5 6 , 0 0 0 d. 0 1 5 .Us i ngt hec a s ei n# 1 4above ,how muc hi st het ot a le qui t yoft hepa r t ne r s hi pa f t e rt hea dmi s s i on ofC? a .3 2 0, 0 0 0 c . 2 4 0, 0 0 0 b. 4 4 0 , 0 00 d. 2 0 0, 0 0 0 1 6 .C a c qui r e s2 0 %i nt e r e s ti nt hepa r t ne r s hi pbyi nve s t i ng₱12 0 , 0 0 0t ot hebus i ne s s .Nobonusi s gi ve nt oC.How muc hi st hec api t a lba l a nc eofAa f t e rt hea dmi s s i onofC? a .2 0 0, 0 0 0 c . 2 4 0, 0 0 0 b. 2 6 4 , 0 00 d. 0 1 7 .Wha ti st heP/Lr a t i oofBa f t e rt hea dmi s s i onofC? a .2 2 % c .3 2 % b. 2 8 % d. 4 0 %

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( 1 0 0% -2 0 %i nt e r e s tofC)x4 0 % =3 2% 1 8 .Be f or et hea dmi s s i onofC,Bde c i de st or e t i r e .A ac qui r e sB’ si nt e r e s tf or₱1 8 0 , 0 0 0 .How muc hi s t hec a pi t a lba l a nc eofAa f t e rt her e t i r e me ntofB? a .2 0 0, 0 0 0 c . 2 8 0, 0 0 0 b. 2 6 4 , 0 00 d. 3 2 0, 0 0 0 1 9 .Be f or et hea dmi s s i onofC,Bde c i de st or e t i r e .Thepar t ne r s hi ppa ysB₱1 8 0, 0 0 0i ns e t t l e me ntof hi spa r t ne r s hi pi nt e r e s t . How muc hi st hec a pi t a lba l a nc eofAaf t e rt her e t i r e me ntofB? a .2 0 0, 0 0 0 c . 2 6 0, 0 0 0 b. 1 4 0 , 0 00 d. 3 2 0, 0 0 0 So l ut i o n: Da t e

1 2 0 , 0 0 0 6 0 , 0 0 0

B, Ca pi t a l A, Ca pi t a l Ca s h

1 8 0 , 0 0 0

t or e c o r dt h ewi t h dr a wa lo fBf r o mt h ep a r t ne r s hi p

A, Ca pi t a laf t e rB’ sr e t i r e me nt=2 00 , 0 0 0–6 0, 0 0 0=1 4 0, 0 0 0 2 0 .Us i ngt hec as ei n#1 8abov e ,how muc hi st het ot a le qui t yoft hepar t ne r s hi pa f t e rt her e t i r e me nt ofB? a .3 2 0, 0 0 0 c . 2 4 0, 0 0 0 b. 4 4 0 , 0 00 d. 5 0 0, 0 0 0 So l ut i o n: Da t e

1 2 0 , 0 00 *

B, Ca pi t a l A, Ca pi t a l

1 2 0 , 0 00 *

t or e c o r dt h ewi t h dr a wa lo fBf r o mt h ep a r t ne r s hi p

*Noc hang ei nt ot a le qui t y .

Chapter 4 – Partnership Liquidation 2 1 .A a ndBde c i de dt ol i qui da t et he i rpa r t ne r s hi pbus i ne s s .Thes t a t e me ntoffinanc i a lpos i t i onof t hebus i ne s ss howst hef ol l owi ngi nf or ma t i on: As s e t s 10 0, 00 0

Li abi l i t i e s 20, 000

A, Capi t al( 50%) 40 , 000

B, Capi t al( 5 0%) 4 0, 00 0

Thepar t ne r swe r ea bl et oc onve r ta l la s s e t si nt o₱9 0 , 0 0 0c a s h.Ho w muc hdi dBr e c e i vef r om t hefina l s e t t l e me ntofhi si nt e r e s t ? a .3 0 , 0 0 0 c .2 8 , 0 00 b .3 5 , 0 0 0 d. 3 6, 6 6 7 So l ut i o n: St e p1 : Co mput ef o rt h eg a i no rl o s s Ne tc a s hpr oc e e ds Le s s :Ca r r yi nga mountofal la s s e t s Tot all os s

9 0 , 0 0 0 ( 1 0 0, 0 0 0 ) ( 1 0 , 00 0 )

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St e p2 : Al l o c a t et heg a i no rl o s st ot hep a r t ne r s ’c a p i t a lb a l a nc e s( i nc l ud et h e i rr i g h to fo ffs e t )

Capi t albal anc es Al l oc a t i onofl os s [ 1 0Kx( 50 %&5 0%) ] Amt s .r e c e i ve dbyt hepar t ne r s

A( 50 %) 40 , 000

B( 5 0%) 40 , 000

Tot al s 80 , 000

( 5, 000 ) 35 , 000

( 5, 000 ) 3 5, 00 0

( 10, 000) 70, 000

2 2 .A a ndBde c i de dt ol i qui da t et he i rpa r t ne r s hi pbus i ne s s .Thes t a t e me ntoffinanc i a lpos i t i onof t hebus i ne s ss howst hef ol l owi ngi nf or ma t i on: As s e t s 20 0, 00 0

Li abi l i t i e s 80, 000

A, Capi t al( 50%) 70 , 000

B, Capi t al( 5 0%) 5 0, 00 0

Thepar t ne r swe r ea bl et oc onve r ta l la s s e t si nt o₱1 8 0, 0 0 0c a s h.How muc hdi dA a ndBr e c e i vef r om t hefina ls e t t l e me ntoft he i ri nt e r e s t s ,r e s pe c t i ve l y? a .5 0 , 0 0 0; 5 0 , 0 0 0 c .7 0 , 0 00 ; 3 0 , 0 0 0 b .6 0 , 0 0 0; 4 0 , 0 0 0 d. 5 6, 6 6 7 ; 4 3 , 3 3 3 So l ut i o n: St e p1 : Co mput ef o rt h eg a i no rl o s s Ne tc a s hpr oc e e ds Le s s :Ca r r yi nga mountofal la s s e t s Tot all os s

1 8 0 , 0 00 ( 2 0 0, 0 0 0 ) ( 2 0 , 00 0 )

St e p2 : Al l o c a t et heg a i no rl o s st ot hep a r t ne r s ’c a p i t a lb a l a nc e s( i nc l ud et h e i rr i g h to fo ffs e t ) A( 50 %) B( 5 0%) Tot al s Capi t albal anc es 70 , 000 50 , 000 1 20, 000 Al l oc a t i onofl os s ( 10, 00 0) ( 10, 000) ( 20 , 000 ) [ 2 0Kx( 50 %&5 0%) ] 60 , 000 40 , 000 1 00, 000 Amt s .r e c e i ve dbyt hepar t ne r s 2 3 .Par t ne r sA,Band C de c i de dt ol i qui da t et he i rpa r t ne r s hi p.A s umma r yoft hepar t ne r s hi p’ s s t a t e me ntoffina nc i a lpos i t i oni ss hownbe l ow: Ca s h Nonc as has s e t s To t a l

5 0 , 0 0 0 1 , 2 0 0, 0 0 0 1 , 2 5 0 , 0 0 0

Ac c ount spa yabl e Pa ya bl et oA A, Ca pi t a l( 4 0 %) B, Ca pi t a l( 4 0 %) C, Ca pi t a l( 2 0 %) To t a l

1 0 0, 0 0 0 5 0 , 0 0 0 4 0 0 , 0 0 0 4 5 0 , 0 0 0 2 5 0 , 0 0 0 1 , 2 5 0 , 0 00

Thr e e f our t hs( 3 /4)oft henonc a s ha s s e t swe r es ol df or₱9 2 0, 0 0 0 .Thepa r t ne r s hi p pa i d ₱5 , 0 0 0 t r a ns ac t i onc os t sont hes a l e .How muc hc a s hdi dC r e c e i vef r om t hes e t t l e me ntoft hepa r t ne r s ’ i nt e r e s t s ? a .1 6 3 , 0 00 c .1 9 3, 0 0 0

P a g e | 10

b .1 8 6 , 0 00

d. 2 0 6, 0 0 0

So l ut i o n: S al eofnonc a s has s e t s

9 2 0 , 0 00

Li qui da t i one x pe ns e s

( 5 , 0 00 ) 9 1 5 , 0 0 0 ( 1 , 20 0 , 0 0 0 ) ( 2 8 5 , 00 0 )

Ne tc a s hp r o c e e d s Le s s :Ca r r yi nga mountofnonc a s has s e t s Tot all os sons al e