ACCTBA2, FUNDAMENTALS OF ACCOUNTING IIBONUS 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.ph2. 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 2012Land10000

Don, Capital100000

Cash40000

Mort, Capital40000

Sales18000

Cash180000

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 1Cash100000

James, Capital100000

Cash500000

Mortgage payable30000

Short, Capital470000

Answer: P470000

3. Mutt and Jeff formed a partnership on April 1 and contributed the following assets:MuttJeff

Cash150,00050,000

Land310,000

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= 280000Jeff 280000 + 50000 =330000April 1Cash150000

Mutt, Capital150000

Cash50000

Land310000

Jeff, Capital330000

Mortgage payable30000

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 1Land25000

Mabel, Capital25000

Cash50000

Pierre, Capital50000

Sales50000

Land50000

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).JordanONeal

CashP60,000P50,000

Inventories80,000

Land130,000

Equipment100,000

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:JordanONeal

Interest on beginning capital balances3%3%

SalariesP12,000P12,000

Remainder60%40%

Prepare a Statement of Financial Position for Number 5.Statement of Financial PositionAssetsCash110000

Inventories80000

Land80000

Equipment80000

350000

LiabilitiesMortgage payable50000

Note payable20000

70000

Total: P420000Capital Jordan, Capital240000

ONeal, Capital180000

4200000