ACCTBA2, FUNDAMENTALS OF ACCOUNTING II

BONUS QUESTIONS

INSTRUCTIONS:
1. For uniformity, kindly submit via EMAIL, your answers to these five questions not
later than 11:59 pm on January 23, 2014. Email address: catherine.ty@dlsu.edu.ph
2. SHOW appropriate JOURNAL ENTRIES on the FORMATION OF THE PARTNERSHIP
on all the items. Show the solutions to your answers as well.
3. SAVE YOUR FILE AS PDF with your SURNAME and SECTION as your filename.
Ex. TYk34.pdf
3. YOU WILL BE CREDITED WITH five (5) points on your upcoming QUIZ ONE.
4. Numbers 1-4 has a weight of .5 each while number 5 has a total of 3 points.


1. On May 1, 2012, Don and Mort formed a partnership and agreed to share
profits and losses in the ratio of 3:7, respectively. Don contributed a
parcel of land that cost her P10,000. Mort contributed P40,000 cash. The
land was sold for P18,000 on May 1, 2012, immediately after formation of
the partnership.
What amount should be recorded in Dons capital account on the
formation of the partnership?

May 2012 Land 10000
Don, Capital 100000

Cash 40000
Mort, Capital 40000

Sales 18000
Cash 180000

Answer: 10000






2. On July 1, 2012, a partnership was formed by James and Short. James
contributed cash worth P100,000. Short, previously a sole proprietor,
contributed property other than cash, including realty subject to a
mortgage, which was assumed by the partnership. Shorts previous total
assets were worth P500,000. The mortgage of the realty was P30,000.
No other liability was left.
Shorts capital account at July 1, 2012 should be recorded at___
July 1 Cash 100000
James,
Capital
100000
Cash 500000
Mortgage
payable
30000
Short,
Capital
470000
Answer: P470000

3. Mutt and Jeff formed a partnership on April 1 and contributed the
following assets:
Mutt Jeff
Cash 150,000 50,000
Land 310,000

The land was subject to a mortgage of P30,000, which was assumed by
the partnership. Under the partnership agreement, Mutt and Jeff will share
profit and loss in the ration of one-third and two-thirds respectively.
310000-30000= 280000
Jeff 280000 + 50000 =330000
April 1 Cash 150000
Mutt, Capital 150000
Cash 50000
Land 310000
Jeff, Capital 330000
Mortgage
payable
30000



Jeffs capital account at April 1 should be_______.
Answer: P330000


4. On July 1, Mabel and Pierre formed a partnership, agreeing to share
profits and losses in the ration of 4:6 respectively. Mable contributed a
parcel of land that cost her P25,000. Pierre contributed P50,000 cash. The
land was sold for P 50,000 on July 1, four hours after the formation of the
partnership.
How much should be recorded in Mabels capital account on
formation of the partnership?
July 1 Land 25000
Mabel, Capital 25000
Cash 50000
Pierre, Capital 50000
Sales 50000
Land 50000

Answer: P25000

5. The partnership of Jordan and ONeal began business on January 1, 2013.
The following assets were contributed by each partner (for non cash
assets are stated at their fair values on January 1, 2013).
Jordan ONeal
Cash P60,000 P50,000
Inventories 80,000
Land 130,000
Equipment 100,000

The land was subject to a P50,000 mortgage, which the partnership assumed on
January 1, 2013. The equipment was subject to an instalment note payable that
had an unpaid principal amount of P20,000 on January 1, 2013. The partnership
also assumed this note payable. Jordan and ONeal agreed to share partnership
income and losses in the following manner:
Jordan ONeal
Interest on beginning
capital balances
3% 3%
Salaries P12,000 P12,000
Remainder 60% 40%

Prepare a Statement of Financial Position for Number 5.
Statement of Financial Position
Assets
Cash 110000
Inventories 80000
Land 80000
Equipment 80000
350000
Liabilities
Mortgage payable 50000
Note payable 20000
70000

Total: P420000
Capital
Jordan, Capital 240000
ONeal, Capital 180000
4200000