1.

Kendall and Kylie formed a partnership on June 1 and contributed the following assets:
Kendall
Cash
Land
Building

400,000
----250,000

Kylie
200,000
500,000
350,000

The land was subject to a mortgage of 40,000, which was assumed by the partnership. They
agreed to have a share of profit and loss in 60% and 70% respectively. The capital account of
Kylie on June 1 is:
a. 980,000
b. 1,050,00
c. 890,000
2.Karma and Aimee formed a partnership and agreed to divide initial capital equally even
though Karma contributed 90,000 and Aimee contributed 105,000 in cash. To adjust the capital
balances under bonus method, Karma should have a bonus credit of?
a. 97,500
b. 7,500
c. 195,000
3. Justin, Jaxon and Jasmyn are to form a partnership. Justin is to contribute 70,000 cash and a
computer that cost him 50,000 and has a fair market value of 55,000. Jaxon is to contribute
100,000 cash. Jasmyn is to contribute 30,000 cash and a computer that cost 40,000 and has a
fair value of 48,000. The capital balances upon formation are:
a. 125,000, 100,000 and 78,000 respectively.
b. 120,000, 100,000 and 70,000 respectively.
c. 70,000, 100,000 and 30,000 respectively.
4. Selena and Taylor formed a partnership on July 23 by investing the following assets:

Cash
Inventory
Office Equipment
Furniture

Selena

Taylor

50,000
10,000
----180,000

?
100,000
170,000
-----

Selena and Taylor agreed to divide the profits and losses into 40% and 60% respectively and to
assume the liability on the office equipment of 50,000. They also agreed to bring their capital
equal to their profit and loss ratio. How much cash is to be invested by Taylor?
a. 124,000
b. 200,000

c. 140,000

5. The Statement of Financial position as of December 31 for the business owned by Jasmine
Villegas shows the following assets and liabilities:

Cash

20,000

Accounts Receivable

12,000

Inventory

15,000

Delivery Equipment

18,000

Accounts Payable

8,000

It is estimated that 2% of accounts receivable is uncollectible. Delivery Equipment would cost

22,000 if currently purchased. Hailey Baldwin is to be admitted as a partner upon his investment
of 30,000 cash. What is the total assets of the partnership?
a. 73,000
b. 98,760
c. 103,000
6. Joy and John will form a partnership . Joy is to invest 400,000 in cash for her 65% interest in
the capital and profits or loss of the business. John will contribute inventory that has a fair
market value of 50,000 and a building that has a fair value of 100,000. What amount of cash
John is to contribute?
a.65,385
b. 64,000
c. 63,000
7. Under the partnership contract of Barbie and Ken Partnership, it is agreed that Barbie is to
receive an annual salary of 75,000, Ken is to receive an annual salary of 70,000 and remaining
profit or loss is to be shared equally. The net income of Barbie and Ken Partnership for the year
ended is 130,000. How should the 130,000 be divided between Barbie and Ken?
a. 67,100 and 65,500 respectively.
b

67,200 and 62,800 respectively.

c. 67,500 and62500 respectively.

8. Dorene, Rahma and Zennia have the capital balances of 250,000, 230,000 and 210,000
respectively. Partners receive 10% interest on their capital balances. After deducting salaries of
50,000 to Dorene and 35,000 to Rahma, the remaining profit or loss is divided equally. The
Partnership incurred a loss of 80,000 before interests and salaries to partners. By what amount
should Dorene capital change?

a.(3,000)
b. (57,000)
c. (20,000)
9. Partners Gigi and Cara share profits in the ratio of 3:2. Gigi is to receive a yearly bonus of
15% of the net income after allowances for salaries and interests but before bonus. The
partnership made a net income of 75,000. How much share in the net income will Gigi receive?
a. 27,000

b. 22,000
c. 48,000
10. Jessica, Miley and Hannah agreed to divide profits in the ratio of 4:3:3. Jessica and Miley
shall receive an annual salary of 30,000 and 35,000 respectively. Liam is to receive a bonus of
25% of the net income after allowances for salaries, interest and bonus. How should be a
165,000 profit be divided among the partners?
a. 60,000, 50,000, 40,000 and 160,000 respectively.
b. 62,000, 59,000, 44,000and 165,000 respectively.
c. 67,000, 58,000, 42,000 and 164,000 respectively.

Advance
Accounting

Submitted by:
Claudette Marie B. Tubio
BS Accountancy IIIA