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In which journal would a customer’s partial payment on account be recorded?
General journal Cash receipts journal Cash payments journal Sales journal
It is appropriate when the partners believe that the amount of money or properties they invested will
have the greatest impact on the level of success of the partnership, thus, profit or loss distribution
will be in accordance with
Capital ratio Arbitrary ratio Unequal ratio Agreed ratio
What item is placed under the “PR” or post reference of a general journal?
The page number of the general ledger where the amount of the account debited/credited is posted Account number of the account that was posted The page number of the subsidiary ledger where the amount of the account debited/credited is posted Amount debited or credited
If a customer agrees to retain merchandise that is defective because the seller is willing to reduce
the selling price, this transaction is known as a sales:
discount allowance bonus Return
The financial statement that reports assets, liabilities and equity is the:
Post-closing Trial Balance Statement of Changes in Equity Income statement Statement of Financial Position
Which of the following transactions increases asset and capital in the accounting equation?
Cash is received from a customer for services rendered to them. Cash is received from proceeds of a loan from a financing institution. Cash is received from a customer previously billed. All of the choices
One who does not take active part in the business and is not known or held out as a partner
Secret Limited Dormant Silent
The method of admitting new partner in the partnership which involves a personal transaction
between the incoming partner and the existing partner is by:
Consensus Purchase Admission Investment
Face value is normally used to value what kind of contributions to the partnership:
Industry Properties or non-cash assets Cash None of the choices All of the choices
The account “Supplies” will appear in the following debit columns of the worksheet, except:
Adjusted trial balance Statement of financial position Income statement Trial balance
In accounting for the liquidation of a partnership, cash payments to partners after all outside
creditors’ claims have been satisfied, but before the final cash distribution, should be made
according to:
Safe payments computation Partners’ share of the gain or loss on liquidation The final balances in partners’ capital accounts The partners’ profit and loss sharing ratio
It is the maximum number of shares that a corporation may issue as provided in its articles of
incorporation
Subscribed shares Authorized shares Issued shares Outstanding shares
When a partner is personally solvent and has a debit balance in his or her partnership capital
account, the personal assets should be distributed as follows?
To the partnership creditors first to the extent of the debit balance and to the personal creditors second Proportionally to the personal creditors and the other partners with credit balances To the personal creditors in full payment of their claims first, to the partnership creditors second, and to the other partners last Proportionally to the personal and partnership creditors
Which of the following best describes legal capital?
Par value of shares issued and subscribed and share premium Stated value of shares issued and share premium Total shareholders’ equity Par value of shares issued and share premium
Which of the following best describes the admission of a new partner by investing an amount equal
to the agreed capital?
Total Assets - Increase; Total Capital - No effect; Old Partners' P&L Ratio - No effect Total Assets - No effect; Total Capital - Increase; Old Partners' P&L Ratio - Decrease Total Assets - Decrease; Total Capital - No effect; Old Partners' P&L Ratio - No effect Total Assets - Increase; Total Capital - Increase; Old Partners' P&L Ratio - Decrease
The characteristic of the partnership form of business that can possibly hinder long term planning
for the business is the
Voluntary association Limited life Mutual agency Unlimited liability
KATY, a sole proprietor wanted to expand her profitable business but she does not have enough
resources. So, she thought of inviting PERRY to join her and formed a partnership on April 1, 2020.
Just before admission, KATY had the following assets and liability accounts: Cash - ₱420,000;
Accounts receivable -₱380,000; Inventories -₱250,000;Notes payable -₱100,000. PERRY agreed to
contribute cash equal to 30% of KATY’s capital after considering the following adjustments: (a) 2%
allowance for bad debts should be recognized, (b) the inventories have fair market value equal to
120% of the balance. How much is the adjusted capital of Katy?
The gross profit is ₱100,000; goods available for sale is ₱ 1,100,000; beginning inventory is
₱100,000; purchases is ₱1,000,000; and sales is ₱1,000,000. The ending inventory is?
Zero
Bruno Mars Enterprises provided the following totals and balances of financial statement elements
on December 31, 2020.Owner’s equity - ₱375,000; wages expense - ₱60,000; Service revenues -
₱150,000; prepaid rent expense - ₱33,000; utilities expense - ₱16,500; accrued expenses - ₱ 18,750;
accrued interest income - ₱ 2,500; delivery expense – ₱10,600. How much is the net income for the
year ended?
On October 17, ORANGE Company issued 15,000 shares of its ₱100 par ordinary share in acquiring
a land that has a fair value of ₱ 1,700,000 during that date. The ordinary share is actively selling at
₱120 per share. On December 31, the land has a fair value of ₱2,100,000. What is the amount of
share premium to be credited on the issuance of shares?
On October 17, ORANGE Company issued 15,000 shares of its ₱100 par ordinary share in acquiring
a land that has a fair value of ₱ 1,700,000 during that date. The ordinary share is actively selling at
₱120 per share. On December 31, the land has a fair value of ₱2,100,000. At what amount should
the Land be recorded in the books of Orange?
VIOLET Corporation was incorporated on January 1, 2020 with the following authorized capitalization: (a) 40, ordinary shares, no par value, stated value ₱40 per share (b) 10,000 shares of 5% cumulative preference share, par value ₱10 per share. During 2020, Violet issued 24,000 ordinary shares for a total consideration of ₱1,200,000 and 6,000 preference share at ₱16 per share. In addition, on December 19, 2020, subscriptions for 2,000 preference shares were taken at a purchase price of ₱17. These subscribed shares were paid for on January 2, 2021. What should Violet report as total contributed capital in its December 31, 2020 statement of financial position? ₱ 1,294, ₱ 1,040, ₱ 1,262, ₱ 1,330,
VIOLET Corporation was incorporated on January 1, 2020 with the following authorized
capitalization: (a) 40,000 ordinary shares, no par value, stated value ₱40 per share (b) 10,000 shares
of 5% cumulative preference share, par value ₱10 per share. During 2020, Violet issued 24,
ordinary shares for a total consideration of ₱1,200,000 and 6,000 preference share at ₱16 per
share. In addition, on December 19, 2020, subscriptions for 2,000 preference shares were taken at a
purchase price of ₱17. These subscribed shares were paid for on January 2, 2021. How much is the
legal capital?
VIOLET Corporation was incorporated on January 1, 2020 with the following authorized
capitalization: (a) 40,000 ordinary shares, no par value, stated value ₱40 per share (b) 10,000 shares
of 5% cumulative preference share, par value ₱10 per share. During 2020, Violet issued 24,
ordinary shares for a total consideration of ₱1,200,000 and 6,000 preference share at ₱16 per
share. In addition, on December 19, 2020, subscriptions for 2,000 preference shares were taken at a
purchase price of ₱17. These subscribed shares were paid for on January 2, 2021. How much share
premium is to be reported for the year ended, December 31, 2020?
1. On December 1, DOS Corporation issued 1,000 shares of its ₱10 par ordinary share capital and
2,000 shares of its P10 par preference share capital for a lump sum of ₱ 40,000. At this date,
ordinary share is selling for ₱18 per share and the preference share for ₱13.50 per share. How
much should the “Ordinary Share Capital” account be credited? (The entry to record the issuance of
the shares serves as the solution for this problem) 18000
2. On December 1, TRES Company sells ₱3,000 of merchandise on account to QUATRO with credit
terms of 2/10, net/30. Two days after, the buyer returned ₱500 worth of merchandise due to
defects. How much should Quatro remit to Tres on December 12? 2500
3. On December 18, 2020, UNO Corporation issued 5,250 ordinary shares, par P30 for P58 per share.
At what amount will shareholders’ equity increase upon issuance? 304500
4. Capital balances in the CARE Partnership are C’s capital P500,000, A’s capital P400,000, R’s
capital P300,000, and E’s capital P200,000, and income ratios are 4:3:2:1, respectively. E withdraws
from the firm following payment of P290,000 in cash from the partnership. A’s capital balance after
recording the withdrawal of E is? 370000
5. The capital balances in the BEE are Betty’s capital P600,000, Eli’s capital P500,000, and Edna’s
capital P400,000, and income ratios are 5:3:2, respectively. The BEER Partnership is formed by
admitting Rina to the firm with a cash investment of P600,000 for a 25% capital interest. The bonus
to be credited to Edna’s capital in admitting Rina is? 15000
6. DUA and LIPA share earnings in a 60:40 ratio. They have decided to liquidate their partnership. A
portion of the assets has been sold but other assets with a carrying amount of P62,000 still must be
realized. All liabilities have been paid, and cash of P28,000 is available for distribution to partners.
The capital accounts show balances of P90,000 for Dua and P55,000 for Lipa. How much of the
available cash for distribution should be given to DUA? 16800
7. When JUSTIN and BIEBER, partners who share earnings 60:40, were severely injured in an
accident, a liquidator was appointed to wind up their business. The accounts showed cash, P90,000;
other assets, P235,000; liabilities, P45,000; Justin's capital, Pl26,000; and Bieber's capital, PI54,000.
The expenses of liquidating the business (advertising, rent, travel, etc.) are estimated at P25,000.
How much cash can be distributed safely at this point? 0
8. The books of Hope Enterprises showed the following adjusting entries at the end of the period:
How much is the total amount for reversal at the start of the next fiscal year relating to these adjusting entries? (The reversing entry/ies serve/s as the solution for this problem) 7000
9. On February 14, 2020, Love, Mahal and Heart agreed to form a partnership and share profits in the
ratio of 40:40:20. They also agreed that Heart shall receive a monthly salary of ₱ 5,000. If Heart
receives P80,000 in the distribution of profits, determine the amount of income for the year ended
December 31, 2020? 400000
10. The collection of an account in the amount of ₱20,000 was recorded and posted in the books as
a debit to cash and credit to Sales by ₱ 2,000. At what amount should Cash be corrected? (The
entry to correct the accounts serves as the solution for this problem) 18000
