SCORE:

NAME:
SOR:
PROFES
SECTION:

Multiple Choice

rros admitted is
balance after Ba
is

P3,000,000. Daganta's capital

a. P1,600,000.
b. P1,500,000.
c. P1,400,000.
d. P1,350,000.

20% interest in a partnership

that has caрitы
C 2. Tolentino invested P400,000 for a
is true?
after admitting Tolent
ino. Which of the following
totaling P150,000
a. Tolentino's capital is P400,000.
b. Tolentino received a bonus of P100,000.
of P100,000.
c. The original partners received a bonus
business was P1,200,000 before
admitting
d. The original partners' capital in the
Tolentino.

the old partners rather than partner, it is

C 3. If a bonus is traceable to to a new

allocated among the partners according to the

a. capital ratio of the old partners.

b. capital ratio of the new partnership.
c. profit and loss ratio of the old partnership.
d. profit and loss ratio of the new partnership.

☆4. Marasigan, Cabance, and Tan are in a partnership. Tan decides she wants to
withdraw from the partnership by selling her interest to Blanche. Marasigan and
Cabance agree to this. Marasigan's and Cabance's capital accounts

a. will not be affected when Blanche is admitted.

b. cannot be determined from the information given.
c. will increase when Blanche is admitted.
d. will decrease when Blanche is admitted.

5. Which of the following will not result in dissolution of a partnership?

a. Incapacity of a partner
b. Negative capital balance of a partner

3-16 | WIN Ballada's Partnership and Corporation Accounting

c. Bankruptcy of a partner
d. Admission of a new partner

16.

a. P53,330
b. P86,670
c. P100,000
d. P120,000

A1. Which of the following results in the dissolution

The withdrawal of
of a partnership?
a. a partner from a partnership.
b. The receipt of share in profit by an existing partner.
c. The contribution of additional assets to
the partnership by an existing partner.
d. The winding up of the partnership
and the distribution of remaining asse to
ts
thé partners.

(8. The admission of a new partner under the bonus metho

d will result in
a. bonus to the old partners only.

b. bonus to the new partner only.

c. bonus to either the new partner or the old partners, but not both.
d. none of the above.

B 9. A partnership agreement most likely will stipulate that assets be reappraised when
a. the partnership is liquidated.
b. a partner leaves the partnership.
c. profits and losses are being distributed.
d. new partner is admitted to the partnership.

120. Which of the following best characterizes the bonus method of recording a new
partner's investment in a partnership?

a. Net assets of the old partnership are not revalued.

b. The partner's initial capital balance is equal to his investment.
new

c. The bonus always results in an increase to the old partners' capital balances.
d. Assuming that recorded assets are properly valued, the book value of the new
partnership is equal to the book value of the old partnership and the investment
of the new partner.

Chapter 3: Dissolution - Changes in Ownership 3-17

16.

be
0
a. P230,00
0
b. P180,00
C.
P170,000
00
d. P140,0

When a partner withdraws from a partnership taking assets that represent less than
his capital balance,

a. no bonus results.
b. the remaining partners receive a bonus.
C. the withdrawing partner receives a bonus.
d. the remaining partners owe the withdrawing partner the difference.

18. Perdio paid Tria P600,000 for her P400,000 interest in a partnership. On the
partnership books,
a. Perdio will receive a bonus.
b. Perdio will give up a bonus.
c. Perdio will have a capital balance of P600,000.

d. Perdio will have a capital balance of P400,000.

19. Mulles invested P600,000 for a one-fifth interest in a partnership in which the other
partners have capital totaling P1,200,000 before admitting Mulles. After
distribution of the bonus, Mulles' capital is

a. P240,000.
b. P360,000.
C. P480,000.
d. P600,000.

20. Pascual invested P400,000 for a partnership that has

10% interest in a total capital
of P3,000,000 after admitting Pascual. Which of the
following is true?

a. Pascual's capital is P260,000.

b. Pascual receiveda bonus of P100,000.
s of P100,000.
C. The original partners received a bonu
0,000 before admitting
d. The original partners' capital in the business was P2,70
Pascual.

Chapter 3: Dissolution Changes in Ownership

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| 3-19
:
NAME SCORE:
ON:
SECTI PROFESSOR:

Choice
Multiple

Ricablanca, Tac-an, and Andres who share

profits and losses in the ratio of 4:3:3:
Cash P 180,000
Other Assets
Accounts Payable P 420,000
1,660,000
Receivable-Partner Ricablanca Payable-Partner Andres 60,000
40,000
Ricablanca, Capital 620,000
Tac-an, Capital 400,000
Total
Andres, Capital 380,000
P1,880,000
P1,880,000

Assume that the assets and liabilities are fairly value

d on the statement of financial
position and the partnership decides to admit Leon as a
new partner, with a 20%
interest. No goodwill or bonus is to be recorded.
How much cash must Leon
contribute?

a. P280,000
b. P284,000
c. P350,000
d. P355,000

(2. On June 30, 2019, the statement of financial position for the partnership of Villon,
Obrero and Bernal, together with their respective profit and loss ratio, were as
follows:

Assets, at cost P180,000

Villon, Loan P 9,000
Villon, Capital (20%) 42,000
Obrero, Capital (20%) 39,000
Bernal, Capital (60%) 90,000
P180,000

Villon had decided to retire from the partnership. By mutual agreement, the assets

are to adjusted to their fair value of P216,000 at June 30, 2019. It was agreed
be
that the partnership would pay Villon P61,200 cash for Villon's partnership interest,
including Villon's loan which is to be repaid in full. No goodwill is to be recorded.
After Villon's retirement, what is the balance of Obrero's capital account?

a. P36,450 c. P45,450
b. P39,000 d. P46,200

Chapter 3: Dissolution - Changes in Ownership | 3-43

(4
Cash P 40,000
Other Assets 360,000 Accounts Payable P100,000
Arias, Capital 74,000
Bobadilla, Capital 130,000
Total Briones, Capital 96,000
P400,000
Total P400,000
The assets and liabilities are recorded and
presented at their respective fair values.
Banzon is to be admitted as a new partner with a 20%
capital interest and a 20%
share of profits and losses in exchange for a cash contri
bution. No goodwill or
bonus is to be recorded. How much
cash sho uld Banzon contribute?
a. P60,000
c. P75,000
b. P72,000
d. P80,000

f s. The capital account for the partnership of Saliut and Molina at Oct. 31, 2019 follo
ws:
Sali ut, Capital
P 80,000
Molina, Capital
40,000
P120,000

The partners share profits and losses in the ratio of 6:4, respect
ively. The
partnership is in desperate need of cash, and the partners agreed to admit
Buenaflor as a partner with one-third in the capital and profits and losses upon her
investment of P30,000. Immediately after Buenaflor's admissi
on, what should be
the capital balances of Saliut, Molina and Buenaflor, respect
ively, assuming goodwill
is not to be recognized?

a. P50,000; P50,000; P50,000

b. P68,000; P32,000; P50,000
c. P60,000; P60,000; P60,000
d. P66,667; P33,333; P50,000

Ba When Cabulay retired from Cabulay,De Chaver and Kwong, he received received
excess of his capital account balance. Under the bonus method, the
cash in
excess

by Cabulay

a. had no effect on the capital account balances of De Chavez and Kwong.

b.
reduced the capital account balances of De Chavez and Kwong.
C. was recognized as goodwill of the partnership.

d. was recognized as an operating expense of the partnership.

Chapter 3: Dissolution Changes in Ownership | 3-47

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position on Sept. 30, 2019 follows:
and their statement of financial

RTU Partners
hip
Financial Posi
tion
Statement of
Sept. 30, 2019

P 80,000
Cash
720,000
Other Assets
P800,000
Total Assets

P200,000
Accounts Payable
148,000
Salvador, Capital
260,000
Garcia, Capital
192,000
Mutuc, Capital
Total Liabilities and Capital
P800,000

The assets and liabilities are recorded at their approximate current fair values.
Tuazon is to be admitted as a new partner with a 20% interest in capital and
earnings in exchange for a cash investment. Goodwill or bonus will not be
considered. How much cash should Tuazon contribute?

a. P150,000 C. P120,000
b. P144,000 d. P160,000

A 8. Partners Cammayo and Tac-an share profits and losses in the ratio 7:3, respectively.
On Feb. 1, 2019, their capital account balances were as follows:

Cammayo P70,000
Tac-an 60,000

Cammayo and Tac-an agreed to admit Hernandez as a partner with a one-third

interest in the partnership capital and profits or losses for an investment of P50,000.
The new partnership will begin with total capital of P180,000. Immediately after
Hernandez's admission to the partnership, the capital account balances of
Cammayo, Tac-an, and Hernandez, respectively, are

a. P63,000, P57,000, P60,000.

b. P60,000, P60,000, P60,000.
c. P63,333, P56,667, P60,000.
d. P70,000, P60,000, P50,000.
e. Some other amount

3-48 | WIN Ballada's Partnership and Corporation Accounting