Cristhyl B.

Cerveza BSA 3
PARTNERSHIP OPERATIONS
1. Kyla, Myla and Zoila are partners in KMZ partnership with an average capital balances
during 2015 of P120,000, and P30,000, and P70,000, respectively. Partners receive a ten
percent interest in their average capital balances. After deducting salaries of P30,000 to
Kyla and P20,000 to Zoila, the remaining profit or loss is divided equally. In 2014, the
partnership sustained a P33,000 loss before interest and salaries to partners. By what
amount should Kylas capital account change? 7000 increase
2. The partners of AA and BB share profits 3:2. However, AA is to receive a yearly bonus of
20 percent of the net profits after deducting the said bonus, in addition to his profit share.
The partners made a net income for the year of P24,000 before the bonus. How much
profit share will AA receive? 16,000
3. If the partnership has a profit of P88,000 and partner CC is to be allocated at 10 percent
of profit after the bonus, CC bonus would be? 8000
4. Cerveza, a partner in the CV partnership has a 30 percent share in the partnership profit
and loss. Her capital account had a net decrease of P60,000 in 2014. In 2014, she
withdraws P130,000 against his capital and invested property valued at P25,000 in the
partnership. The profit of the partnership is? 150,000
5. Jenny and Joy are partners with capitals of P200,000 and P120,000, respectively. The
partnership agreement provided that 10 percent interest on their capital investment,
annual salary of P36,000 to Jenny, and the remainder in 60:40 ratios to Jenny and Joy.
What is the profit to be earned by the partnership before charges for interest, salary and
the balance, so that Joy will receive P40,000 in the remainder of the profit after salary
and interest? P168,000
6. AB, CD, and EF form a partnership and agree to maintain average investment of P2,
500,000, P1,250,000, and P1,250,000 respectively. The partners agree to divide profits
and losses as follows:
a. Interest of 6 percent on the excess or deficiency in the capital investments.
b. Remainder to be shared in the ratio of 5:3:2 to AB, CD, and EF respectively.
Average investment made during the first six months was as follows: AB P3,000,000,
CD P1,375,000, EF P1,000,000. A loss operation of P62,500 was incurred for the first
six months. How is this loss distributed among the partners?
P21,875 , P 18,375 , P 22,250
7. Ian and Leo are partners who shared profits and losses in the ratio of 6:4, respectively.
Ians salary is P100,000 and Leo is P50,000. The partners also are paid interest on their
average capital balances. In 2015, Ian received P50,000 of interest and Leo P20,000. The
profit and loss allocation is determined after deductions of salary and interest payments.
If Leos total share of partnership income was P200,000 in 2014, what was the total
partnership income? P545,000
8. The partnership agreement of Ana, Bela, and Carla provides for the year ended allocation
of net income in the following order:

a. Ana is to receive 10 percent of net income up to P100,000 and 20 percent over

P100,000.
b. Bela and Carla each are to receive 5 percent of the remaining income over P150,000.
The balance of income is to be allocated equally among partners.
The partnerships in 2015 net income was P250,000 before any allocations to
partners. What amount should be allocated to Ana? P108,000
9. Khen, Dan and Bhe agree to form a partnership and share profits in the ratio of 5:3:2.
They also agreed that Bhe is to be allowed a salary of P14,000, and that Dan is to be
guaranteed of P10,500 as his share in the profits. During the first year of operation, an
income from fees is P90,000, while expenses total P48,000. What amount of net income
should be credited to each partners capital account? P12,500 , P 10,500 , P19,000
10. Coke and Sprite have capital account balances at the beginning of the year of P40,000
and P45,000, respectively. They share net income and losses as follows:
a. 8 percent interest on the beginning capital balances
b. Salary allowance of P15,000 to Coke and P7,500 to Sprite
c. Remainder in ratio of 3:2
The partnership reported net income of P10,000 for the year, before interest and
salary allowances to partners. What are the profit shares of Coke and Sprite,
respectively? P6,620 and P3,380
11. Bong, a partner in BB Partnership, is entitled to 40 percent of the profits and losses.
During 2015, Bong contributed land with a fair value of P60,000. Also during 2015,
Bong had drawings of P80,000. The balance of Bongs capital account was P120,000 at
the beginning of 2015 and P150,000 at the end of the year. What is the partnerships
profit or loss for 2015? P125,000 profit
12. A partnership showed the following account balances: sales P70,000; cost of sales
P40,000; operating expenses P10,000; partners salaries P13,000; interest paid to banks
P2,000 and partners drawings P8,000. The partnership profit is? P18,000
13. The partnership agreement of April and May provides that interest at 10 percent is to be
credited to each partner on the basis of average capital balances. A summary of April and
May capital account for the year ended December 31,2015 is as follows:
Balance, January 1
P140,000
Additional investment, July 1
40,000
Withdrawal, August 1
15,000
What amount of interest should be credited to May capital account for 2015? P15,375
14. The Partnership Contract for the HD partnership provided that Hardie is to receive a
annual salary of P120,000, David is to receive an annual salary of P80,000, and the
remaining profit or loss is to be divided equally between the two partners. Net income of
the HD Partnership for the year ended December 31,2015 was P180,000. The closing
entry for net income on December 31,2015 is a debit to income summary for P180,000
and credits to Hardie of? P110,000
15. Day and Night formed a DN Partnership on January 1, 2015 with cash investments of
Day P120,000 and Night P180,000. On December 31,2015 the net income of the DN
partnership was P69,600. The net income included an extraordinary gain of P12,000.

What is the share of Day in the net income of P69,600, if income before extraordinary
items is shared equally between Day and night after allowance of 20 percent bonus to
Night based on income before extraordinary items after the bonus. Extraordinary items
are shared on the basis of original investment. P28,800
16. Cold and Hot share profits in the ratio of 3:2. However, Cold is to receive a bonus of 20
percent of the profits, in addition to his profit share. The partnership made a profit for the
year of P24,000 before the bonus. Assuming Cold bonus is computed on profit after
deducting said bonus, how much profit share will Hot receive? P8,000
17. Partner Jess had a beginning capital balance of P35,000 and made additional investment
of P27,000 during the year. In the same year, Jess made drawings of P5,000 per month.
The post-closing capital balance of Jess is P72,000. What is his share in the partnership
profit? P70,000
18. The partnership of Mark, Gericka, and Zeny divides profits or losses in the ratio of 4:5:3.
During the year, the business earned P120,000. Mark share of this profit is? P40,000
19. Refer to problem in # 19, Gericka share of this profit is? P50,000
20. Zeny share of this profit is? P30,000
PARTNERSHIP LIQUIDITION
For question 1-3
The statement of financial position of the Best partnership, just before the liquidation, is
as follows: Cash P20,000; Non Cash Assets P50,000; Liabilities P24,000; Ben capital
(50%) P20,000, Ten Capital (30%) P16,000 and Ken capital (20%) P10,000.
1.If Non Cash assets are sold for P10,000 net of liquidation expenses and the liabilities
are paid. What amount of remaining cash would Ben Receive? P0.00.
2. If Non Cash assets are sold for P20,000 net of liquidation expenses and liabilities are
paid. What amount of remaining cash would Ten receive? P7,000
3.If Non Cash Assets are sold for P80,000 net of liquidation expenses and liabilities are
paid. What amount of Cash would Ken receive? P16,000

For question 4-6

Partners Riza and Ria each have a P150,000 capital balance and share profits and losses
in a 3:2 ratio, respectively. Cash equals to 200,000, non-cash assets equal to P500,000,
and liabilities equal to P400,000.
4. If non cash assets are sold for P250,000, the Riza capital account will? Decrease by
P150,000

5, If non cash assets are sold for P200, 000, and each partner is personally insolvent,
Ria eventually will receive a cash of? P0.00
6. If non cash assets are sold for P150,000, and both partners agreed to make up for any
capital deficits with personal cash contributions, Ria eventually will receive cash of?
P10,000
7. Partners Ariel,Surf and Pride each have capital balance of P50,000, P200,000, and
P120,000, and share profits and losses in the ratio of 4:3:3 respectively. Cash equals to
P140,000 and other assets equal to P260,000 and a liabilities equal to P30,000. The
partners agree to liquidate the partnership after selling the other assets for P140,000.
Upon liquidation of the partnership, Ariel should receive? P2,000
8. The statement of financial position for the partnership of Kristine, Jessah, and Laida,
whose share of profits and losses are 40, 50, and 10 percent, is as follows:
Cash

P50,000

accounts payable

P50,000

Inventory

260,000

Kristine Capital

150,000

Jessah capital

40,000

Laida capital

70,000

If the inventory is sold for P160,000, how much should Kristine receive upon liquidation
of partnership? P60,000
9. The accounts of Lorfa, Shaira, and Cristhyl, who shares profit in a 5:3:2 ratios are as
follows on December 31, 2015:
Lorfa, Drawings (Dr.)

P10,000

Lorfa capital

P49,500

Cristhyl, Drawings (Cr.)

4,000

Shaira capital

37,000

Receivable from Lorfa (Dr,)

6,000

Cristhyl capital

32,500

Shaira loan

12,000

Total assets amount to P176,000, including P53,500 cash. The partnership is liquidated
and Cristhyl ultimately receives P27,500 as her share of cash in final distribution. How
much Lorfa and Shaira did receive? P11,000 and P35,500
For question 10-12

On January 2, 2015 LL, MM, NN formed a partnership, agreeing to divide profits 2:1:1,
respectively. On July 31, 2015, with operations going unfavourable, the partners decided
to
dissolve the firm. The following data are available.
LL

MM

NN

Capital contributions

P50,000

P22,500

P20,000

Drawings (Dr.)

15,000

10,000

10,000

Net loss, July 31,2015, P30,000

15,000

7,500

7,500

After realization of net asset of the firm is valued at P65,000.

10. In the settlement to partners, how much should be paid to LL? P38,750
11. How much should be paid to MM? P14,375
12. How much should be paid to NN? P11,875
13-14 question:
Bebhe and Ndhai partnership has a cash of amounted to P121,000; inventory of
P444,000; liabilities of P50,000; Bebhe loan and capital amounted to P65,000 and
P300,000 respectively; and Ndhai capital of P200,000.
13. Assume that inventory is sold for P600, 000. What amount of gain or loss from
realization should be recognized? P156,000
14. Assume that inventory is sold for P333,000. What amount of gain or loss should be
recognized? P111,000
15. The conversion of non-cash assets into cash is referred to as? Realization
16. It is the excess of a partners share in losses over the partners capital credit account?
Capital deficiency
17. The sum of his capital and loan accounts in the partnership is called? Partners
interest
18. This repetitious procedures can be avoided with the introduction of an alternative
device called the? Cash priority program
19. Represent the maximum loss that the partners can absorb without reducing their
equity below zero? Loss absorption balances

20. This program permits the partners to determine how cash should be safety distribute
if and when it becomes available? Cash distribution program

Auditing CIS Environment

Identification:
1. Exercise control over the CIS operation? CIS Director
2. Prepares and verify input data for processing? Data Entry operator
3. These are controls total computed based on the data submitted for processing?
Control Totals
4. Consist of generally available computer packages which have been design to perform
common audit task? Generalized audit software
5. These techniques involve taking a picture of transactions as it flows through the
computer systems?
6. Is primarily designed to test the effectiveness of the internal control procedures which
are incorporated in the clients computer program? Test data technique
7. Are computer programs data which the auditor uses as part of the audit procedures to
process the data of audit significance contained in an entitys information systems?
Computer Assisted Audit Techniques
8. Application Control stage that involves capturing of mass data? Input stage
9. Are control designed to ensure that CIS controls are working effectively as planned.
Monitoring Control
10. Control that provides for the maintenance of back up files and offsite storage
procedures? Data Recovery Control
11. This involves embedding audit software modules within an application system to
provide continuous monitoring of the system transactions? System Control Audit
Review Files
12. This can be accomplished by using generalized audit software or purpose written
programs? Parallel simulation
13. Using this technique, the auditor creates dummy or fictitious employee or other
appropriate unit in testing within the entitys computer system? Integrated Test
Facility
14. It is similar to testing control in a manual control structure in that it involves
examination of documents and reports to determine the reliability of the system?
Auditing around the computer
15. Auditing around the computer can be used only if there are visible input documents
and detailed output that will enable the auditor to trace individual transactions back
and forth? Black box approach
16. This is mathematically calculated digit which is usually added to a document number
to detect common transpositional errors in data submitted for processing? SelfChecking Digit

17. Design new systems, evaluates and improves existing systems, and prepares
specifications for programmers? System Analyst
18. Are those control policies and procedures that relate to the overall computer
information system? General control
19. Whose responsibility is to obtain an understanding of the entitys internal control
system to be able to asses control risk and determine the nature, timing and extent of
test to be performed? Auditors
20. What are the three application controls? Control over input, control over processing
and control over output
Corporate Formation
1.

Choose the situation which illustrates the minimum requirement of the law to
corporate formation.
Authorized Capital
Subscribed Capital
Paid in Capital
a. P300,000
P75,000
P15,000
b. P150,000
37,500
9,375
c.
50,000
12,500
3000
2. A corporation is being organized with an authorized share capital of P25,000. How
much of this P25,000 should be subscribed?
a. P6,000
b. P6,250
c. P5,000
3-4 question:
Khen Koe is authorized to issue P2, 000,000 ordinary shares divided into 10,000
shares, with a par value of P200 per share. The diversified company issued on cash
basis 4,000 shares at par.
3. The shares issuance entry should credited to ordinary shares at the amount of?
a. P2,000,000
b. P800,000
c. P10,000
4. Suppose the 4,000 shares are sold at P300 per share, share premium should be
credited at the amount of?
a. P400,000
b. P1,200,000
c. P800,000
5-6 question:
Joy Joy Company which is located at Lacson Street, Bacolod City has two classes of
shares---preference shares and no-par ordinary shares. 6,000 ordinary shares were
issued for P120, 000.
5. The entry to record the issue of these no par value shares will be?
a. Cash
P120,000
Preference shares
P120, 000
b. Cash
P120,000
Ordinary Shares
P120, 000
c. Accounts receivable
P120,000
Ordinary Shares
P120, 000

6. Suppose that Joy Joy Company No par value ordinary shares have a stated value of
P30. The company issued 6,000 shares at P35 per share. Ordinary shares should be
credited at the amount of?
a. P150,000
b. P180,000
c. P210,000
7-10 question:
White House is a world class resort in Boracay Island. The operations have been
successful. To consolidate control over the enterprise and thus avoid a corporate
takeover by outsiders, the board of directors decided to minimize outstanding shares
by purchasing 2,500 shares with a par value of P1, 500 for P2,000.
7. The entry will be?
a. Treasury Stock
P3,750,000
Cash
P3,750, 000
b. Treasury Stock
P5,000,000
Cash
P5, 000,000
c. Cash
P5,000,000
Treasury Stock
P5,000,000
d. Cash
P 3750,000
Treasury Stock
P3,750,000
8. Assume that the treasury shares were subsequently reissued at cost. The entry will be?
a. Treasury Stock
P3,750,000
Cash
P3,750,000
b. Treasury Stock
P5,000,000
Cash
P5, 000,000
c. Cash
P5,000,000
Treasury Stock
P5,000,000
d. Cash
P 3,750,000
Treasury Stock
P3,750,000
9. Assume that all treasury shares were reissued at P2,200 per share. Share premiumtreasury should be credited at the amount of?
a. P1,250,000
b. P500,000
c. P1,750,000
10. Assume that 2,500 treasury shares were reissued at P1,000 per share. Retained
earnings should be debited at the amount of?
a. P1,250,000
b. P1,750,000
c. P2,500,000
11. Julian Joe Corporation issued 15,555 shares of P10 par value shares at P27 per share.
The amount that would be credited to Share Premium Ordinary is?
a. P264,435
b. P155,550
c. P419,985
12. You are given the following information: Ordinary shares, P90,000 (90 par); Share
Premium-Ordinary, P210,000; and retained earnings, P410,000. Assuming only one
class share, the book value per share is?
a. P690
c. P410
b. P290
d. P90
13. A share of treasury stock that was acquired for P8,000 was sold to a new shareholder
for P12,000. In recording this transaction?

a. Share premium-treasury would be credited for P4,000

b. Share premium treasury would be credited for P12,000
c. Treasury stock would credited for P12,000
d. Ordinary shares would be credited for P8,000
14. Donia Corporation issued 20,200 shares of its P2 par value ordinary shares for
building. The building has a fair value of P888,888. Donias ordinary shares are
currently selling for P65 per share. Donia Corporation should record the building at?
a. P20,200
b. P1,313,000
c. P888,888
15. Treasury shares plus outstanding shares equal?
a. Authorized shares
c. subscribed shares
b. Unissued shares
d. issued shares
16. Happy and Joy in HJ Corporation. Happy contributes a building that he originally
purchased for $50,000 for 50% of the shares. The building has a current FMV of
$100,000. Jane contributes $100,000 in cash for the remaining 50%. What amount of
gain should Happy recognize?
a. P50,000
b. P100,000
c. P0
17. Which of the following are considered as a property?
a. Cash
c. Installment obligation
b. Patents
d. all of the above
18. Non recognition of gain or loss applies only to transfer of? Property
19. Which of the following are the characteristics of preferred stock?
a. Preferred stock holders have the right to receive purchase price plus unpaid
dividends before any assets are distributed to common stockholders.
b. Preferred stock issued in venture capital deals is convertible at the holders option
or automatically if a company goes public.
c. Preferred stock holders have no right to vote with the common stock holders, in
proportion to their conversion ratios.
d. All of the above
20. Jamen and Jane form JJ Corporation. Jamen contributes a building he originally
purchased for $100,000 in exchange for 50% of the shares. The building has a current
FMV of $200,000. Jane contributes $100,000 worth of consulting services for the
remaining 50%. Section 351 does not apply. What amount of gain should Jamen
recognized?
a. P100,000
b. P200,000
c. P0