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Prelim Quiz #1

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Louis Philippe N. Simbulan
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111 views2 pages

Prelim Quiz #1

Uploaded by

Louis Philippe N. Simbulan
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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PRELIM QUIZ #1 - XINTEGAFAR

NAME: _________________________________________________ SCORE:_______________


INSTRUCTION: DATE: _______________
• Use CAPITAL LETTERS for Multiple choice questions.
• Use PERMANENT BLACK BALLPEN.
• NO ERASURES. Any kind of erasures are INCORRECT.
• Write “ZERO” instead of “0” for final answer questions.
• Round-off TWO decimal places on your amounts and FOUR decimal places on percentages.

1. ___________________ 6. ___________________ 11. __________________


2. ___________________ 7. ___________________ 12. __________________
3. ___________________ 8. ___________________ 13. __________________
4. ___________________ 9. ___________________ 14. __________________
5. ___________________ 10. __________________ 15. __________________

PROBLEM 1
LUFFY, ZORO, and SANJI formed ONE PIECE Company on January 31, 2023. On the date of formation,
LUFFY contributed cash with a face value of P50,000 and inventory while ZORO contributed land and
building with an historical cost, accumulated depreciation, and market value of P65,000, P20,000, and
P35,000, respectively. These assets are being secured to a loan with an amount of P10,000 (face value)
and a present value of P9,000 for the remaining cash flows. The company assumed this liability to the
partnership. The last partner SANJI contributed intangible assets with a cost of P17,000.

In addition, the partners agreed that there will be no revaluation and there will be ratio of the profit or loss of
5:3:2 to MINA, SANA, and MOMO, respectively. The profit/loss should also be the capital ratio on the date
of the formation. Lastly, the beginning capital of ZORO at the partnership formation is P33,000 in which he
was the only partner who received a bonus at the formation.
1. How much is the agreed value of the inventory contributed by LUFFY?
2. How much is the bonus given by SANJI at the partnership formation?
3. How much is the total assets of the partnership at January 31, 2023?

PROBLEM 2
On April 1, 2023, MACJOLLY was established with the following item on the allocation of profit/loss:
a. Monthly salaries of P2,500 should be given to MAC and P2,000 to JOLLY.
b. Interest of 5% on the ending capital before profit allocation
c. Bonus of 10% is given to the managing partner, MAC, after deducting bonus and salaries but before
taxes and interest.
d. The remaining amount will be allocated 40% to MAC and 60% to JOLLY.
At the end of the year, MAC and JOLLY have a capital of P400,000 and P350,000, respectively. The part-
nership had earned a revenue of P350,000, and expense of P145,000. The tax rate during the year is 30%.
4. How much is the bonus given to the managing partner?
5. What is the share of JOLLY on the profit allocation?
6. What is the capital balance of MAC at the end of the year?

PROBLEM 3
The capital balances in DEA partnership are: D, capital P60,000; E, capital P50,000; and A, capital
P40,000 and income ratios are 5:3:2, respectively. The DEAR partnership is formed by admitting R to the
firm with cash investment of P60,000 for a 25% interest in capital.
7. What is the amount of bonus to be credited to A capital in admitting R?
8. What is the beginning capital of E at the admission of R?
PRELIM QUIZ #1 - XINTEGAFAR
PROBLEM 4
The balance sheet for Chester, Joana and John partnership, who share profits and losses in the ratio of
50%, 25% and 25% respectively, shows the following balances just before liquidation.
Cash P 24,000.00
Other Assets 119,000.00
Liabilities 40,000.00
Chester, Capital 44,000.00
Joana, Capital 31,000.00
John, Capital 28,000.00
On the first month of liquidation, certain assets are sold for P64,000.00. Liquidation expense of P2,000.00
are paid and additional liquidation expenses are anticipated. Liabilities are paid amounting to P10,800.00
and sufficient cash is retained to ensure the payment to creditors before making payments to partners. On
the first payment to the partners, Chester receives P12,500.
9. The amount of cash withheld for anticipated liquidation expenses.
10. The amount of cash payment to Joana.
11. The total amount of cash available for distribution.

PROBLEM 5
The following data are taken from the statement of affairs of Motor Sports Company.
Assets pledged with fully secured creditors
(realizable value, P535,000).................................................. P800,000
Assets pledged with partially secured creditors
(realizable value, P340,000).................................................. 365,000
Free assets (realizable value, P340,000)....................................... 535,000
Fully secured creditor claims.......................................................... 316,000
Partially secured creditor claims..................................................... 400,000
Unsecured creditor claims with priority........................................... 100,000
General unsecured creditor claims................................................. 1,165,000
12. Partially secured creditors
13. Unsecured creditors without priority

PROBLEM 6
In 2020, OMEGA Construction began work on a contract with ALPHA Company. Data for each year of the
contract are as follows:
2020 2021 2022
Costs incurred during the year P 238,000 P 319,600 P105,000
Estimated costs to complete 357,000 139,400 -0-
Partial billings 260,000 210,000 380,000
Collections 240,000 200,000 410,000
14. Under the percentage-of-completion method of revenue recognition, the balance in Construction in
Progress at the end of 2021 would be?
15. Under the cost recovery method of revenue recognition, the balance in Construction in Progress at the end
of 2021 would be?

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