Polytechnic University of the Philippines

COLLEGE of ACCOUNTANCY and FINANCE

Department of Accountancy Basic Accounting
Sta. Mesa, City of Manila
SIMULATED MIDTERM EXAMINATION
ACCO 2026 Fundamentals of Accounting, Part 2
Academic Year 2013 2014
_________________________________________________________________________________________
General Direction: On the answer sheet provided, shade the letter of the correct answer for each of the
following accounting problems. Each problem is credited for two points each. Time allotted for this
examination is three hours. God bless.
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GD, TOP, and Taeyang formed a partnership on July 1, 2013. The partners had invested P200,000, P300,000,
and P450,000 respectively. The partnership agreement provided that profits and losses are to be shared equally
by the partners after considering the following terms:

Annual salaries to partners will be provided at P60,000 for GD, P48,000 for TOP, and P36,000 for
Taeyang.
10% interest on average capital balances.
10% net profit after salaries and interest as bonus to GD as the managing partner.

On October 1, 2013, GD made additional investment of P60,000, while Taeyang invested P30,000 on
December 1, 2013.
1. If each partner received P30,000 on the residual profit after salaries, interest, and bonus, the net
income reported by the partnership during the first six months of operation amounts to
a. P176,962
c. P220,000
b. P196,625
d. P221,250
2. How much is the capital balance of GD on December 31, 2013?
a. P101,500
c. P341,500
b. P281,500
d. P335,750
Sulli and Minho entered into a partnership on March 1, 2013. Sulli invested P250,000 while Minho invested
P150,000. Sulli is the managing partner and she is to receive salary of P24,000 per year plus bonus equal to 10%
of net profit. The partners also agreed to give 10% interest on their beginning capital At the end of the year, the
trial balance of the firm is given as follows:
Debit
Cash
Accounts Receivable
Prepaid Insurance
Office Supplies
Furniture and Fixtures
Store Equipment
Purchases
Purchase Returns
Sales
Sales Returns
Operating Expenses
Accounts Payable
Sulli, Capital
Minho, Capital

Credit
P140,000
134,000
24,000
5,000
45,000
200,000
390,000
P 26,000
562,000
15,000
115,000

P1,068,000

120,000
210,000
150,000
P1,068,000

Ending amount of assets amounts to P75,000 for Merchandise Inventory and P2,800 for Office supplies.
Accrued utilities of P6,200 is to be recognized. All depreciable assets have 5 years estimated life from March 1,
2013. The straight-line method of depreciation is used. The prepaid insurance is for one year from March 1,
2013. Income tax rate of 30% is to be considered.
3. How much is the net income of the firm?
a. P51,637
c. P 73,767
b. P55,137
d. P132,137
Practice Test ACCO 2026 Midterm Examination
SET B Exam Academic Year 2013-2014

4. How much is the share of Sulli in the net income?

a. P41,709
c. P43,209
b. P42,273
d. P95,041
Dara, Minzy, and Bom are partners sharing profits and losses in 3:3:4 ratio. On January 2, 2013,CL was
admitted into the partnership with a 20% share in profits. The old partners continue to participate in profits or
losses proportionate to their original ratios.
For the year 2013, the partnership books showed a net profit of P125,000. It was disclosed, however, that the
following error were made:
2012
Accrued expenses not recognized
Expired portion of prepaid insurance not adjusted
Overstatement of inventory
Unrecorded purchases still in transit, with terms
FOB Shipping Point
Office Supplies used not recognized

2013
P2,500
3,600
5,000
P10,000
4,000

5. The total effects of the errors in the capital of the firm, without tax consideration, amounts to
a. P 4,000
c. P12,900
b. P12,100
d. P20,100
6. How much is the correct net income?
a. P 92,470
c. P122,100
b. P118,100
d. P132,100
7. The share of partner Dara that she should have received amounts to
a. P29,304
c. P36,630
b. P31,704
d. P39,630
On April 1, 2013, Paula and Camille decided to form a partnership, with Paula transferring her companys net
assets excluding cash and Camille contributing cash in an amount equal to half of the investment of Paula,
after effecting the adjustments agreed by the parties. They agreed to divide profits and losses equally. The
statement of financial position of Paula is given as:
Paula Caringal General Merchandise
Statement of Financial Position
March 31, 2013
ASSETS
Cash
Accounts Receivable
Merchandise Inventory
Furniture and Fixtures
Store Equipment
Office Equipment
TOTAL ASSETS

P 400,000
500,000
1,000,000
70,000
120,000
50,000
P2,140,000

LIABILITIES AND EQUITY

Accounts Payable
Notes Payable
Caringal, Capital
TOTAL LIABILITIES AND EQUITY

P 600,000
400,000
1,140,000
P2,140,000

Provision for uncollectible accounts equal to 10% of accounts receivable is to be established. The fair value of
all property, plant, and equipment on the date of formation is 80% of its carrying value. Each partner withdrew
P25,000 each in anticipation of profit.
8. The total assets of the partnership immediately after formation amount to by how much?
a. P1,642,000
c. P2,042,500
b. P1,963,000
d. P2,563,250
9. Assuming the net income of the partnership is P320,000, the capital of Camille at year-end is
a. P481,000
c. P656,000
b. P456,000
d. P681,000
Practice Test ACCO 2026 Midterm Examination
SET B Exam Academic Year 2013-2014

On August 1, 2013, Gem and Rhizza decided to combine their businesses and form a partnership. Their
statements of financial position before adjustment are given as:
Gem
Cash
Accounts Receivable
Inventories
Furniture and Fixtures
Office Equipment
Prepaid Expenses
TOTAL ASSETS

P18,000
37,000
60,000
60,000
23,000
12,750
P210,750

Rhizza
P 7,500
27,000
39,000
18,000
5,500
6,000
P103,000

Accounts Payable
Capital
TOTAL LIABILITIES AND CAPITAL

P 91,500
119,250
P210,750

P 36,000
67,000
P103,000

The parties agreed that they will have settlement among themselves so that Rhizzas equity and profit share
will be 40% after making the necessary adjustments as follows:

Provide 5% allowance for uncollectible accounts on each outstanding Accounts Receivable balance.
Accrued expenses of P3,000 for Gem and P1,000 for Rhizza is to be recorded.
Inventories should be recognized only at 80% of their book values.
Prepaid expenses of P6,000 for Gem and P2,000 for Rhizza is to be recognized.
Furniture and fixtures of Gem is underdepreciated by P5,000, while the equipment of Rhizza is
underdepreciated by P1,500.

The first five months of operation was successful and each partner withdrew P20,000 on December 1, 2013 in
anticipation for profit. True enough, the operation resulted to a profit of P65,000.
10. The net adjustment to the capital of Gem, considering a tax rate of 30% is
a. P11,095 debit
c. P19,495 debit
b. P15,850 debit
d. P27,850 debit
11. The entry to record the settlement between Gem and Rhizza will be
a. Rhizza, Capital
6,950
Gem, Capital
6,950
b. Gem, Capital
Rhizza, Capital

6,950

c. Rhizza, Capital
Gem, Capital

7,115

d. Gem, Capital
Rhizza, Capital

7,115

6,950

7,115

7,115

12. The capital balance of Rhizza on December 31, 2013 is

a. P70,300
c. P83,350
b. P73,360
d. P93,360
Racina and Coline share profits and losses equally. Racina and Coline receive salary allowances of P20,000
and P30,000, respectively, and both partners receive 10% interest on their average capital balances. Average
capital balances are calculated at the beginning of each month balance regardless of when additional capital
contributions or permanent withdrawals are made subsequently within the month. Partners drawings are not
used in determining the average capital balances. Total net income for 2013 is P120,000.
Racina
Capital, January 1, 2013
Yearly drawings, P1,500 monthly
Permanent capital withdrawals:
June 5, 2013
May 8, 2013
Additional Investments:
October 1, 2013
July 7, 2013

Practice Test ACCO 2026 Midterm Examination

SET B Exam Academic Year 2013-2014

P100,000
18,000

Coline
P120,000
18,000

12,000
15,000
50,000
40,000

13. What is the weighted-average capital for Coline in 2013?

a. P105,333
c. P120,000
b. P119,583
d. P126,667
14. If the average capital for Racina and Coline from the above information is P112,000 and P119,000,
respectively, what will be the total amount of profit allocated after the salary and interest distributions
are completed?
a. P70,000
c. P75,000
b. P73,100
d. P80,000
15. If the average capital balances for Racina and Coline are P100,000 and P120,000, what will the final
profit allocations for Racina and Coline in 2013?
a. P50,000 and P70,000
b. P54,000 and P66,000
c. P70,000 and P50,000
d. P75,000 and P45,000
Hyomin and Jiyeon share profits and losses in a ratio of 2:3, respectively. Hyomin and Jiyeon receive salary
allowances of P10,000 and P20,000, also respectively, and both partners receive 10% interest based upon the
balance in their capital accounts on January 1. Partners drawings are not used in determining the average
capital balances. Total net income for 2013 is P60,000. If net income after deducting the interest and salary
allocations is greater than P20,000, Carnes receives a bonus of 5% of the original amount of net income.
The beginning capital balances of the partners are P200,000 and P300,000 for Hyomin and Jiyeon, respectively.
Each partner had withdrawn P1,500 per month.
16. What are the total amounts for the allocation of interest, salary, and bonus, and, how much overallocation is present?
a. P60,000 and P0
b. P80,000 and P20,000
c. P83,000 and P0
d. P83,000 and P23,000
17. If the partnership experiences a net loss of P20,000 for the year, what will be the final amount of
profit or (loss) closed to each partners capital account?
a. (P30,000) and P10,000
b. (P10,000) and (P10,000)
c. (P8,000) and (P12,000)
d. P10,000 and (P30,000)
On January 2, 2013, Darlene and Mark formed a partnership. Darlene contributed capital of P175,000 and
Mark contributed P25,000. They agreed to share profits and losses at 8:2 ratio. Mark is the general manager
and works in the partnership full time. Mark is given salary of P5,000 a month, an interest of 5% of beginning
capital of both partners, and a bonus of 15% of net income before any salary, interest, and the bonus itself. The
partnerships net sales amounted to P875,000, and has a gross profit rate of 20% based on sales. Total
expenses, which includes salary, interest on equity, and bonus is P143,000.
18. How much is Marks bonus for 2013?
a. P13,304
c. P18,000
b. P16,456
d. P20,700
Sue Ramirez, a partner in Pencil Partnership, has a 30% participation in partnership profits and losses. Her
capital account had a net decrease of P60,000 during the calendar year 2013. During the year, Sue withdrew
P130,000 which was charged against her capital account, and contributed property valued at P25,000 to the
partnership.
19. What was the net income of Pencil Partnership for 2013?
a. P150,000
c. P350,000
b. P233,333
d. P550,000
20. Assuming the other partner had a capital balance at the beginning of the year of P99,000, and had
charges to the capital account by P45,000, how much will be the change to her capital account?
a. P60,000
c. P105,000
b. P77,000
d. P159,000

Practice Test ACCO 2026 Midterm Examination

SET B Exam Academic Year 2013-2014

The partnership agreement of Lyka, Czyra, and Jhydell provides for the year-end allocation of net income in
the following order:

Lyka is to received 10% of net income up to P200,000 and 20% over P200,000.
Czyra and Jhydell each are to receive 5% of the remaining income over P300,000.
The balance of income is to be allocated equally among the three partners.

The partnerships 2013 net income was P500,000 before any allocations to partners.
21. What amount should be allocated to Lyka?
a. P202,000
c. P216,000
b. P206,000
d. P220,000
Sharmaine and Dyan Jean pooled their resources to form a partnership on April 1, 2013, with the firm taking
over their business assets and assuming their business liabilities. On this date, their individual trial balances
show the following:
Sharmaine
P 25,000
150,000
60,000

Cash
Noncash assets
Accounts Payable
Notes Payable
Equity

Dyan Jean
P 30,000
220,000
45,000
100,000
105,000

115,000

The partners agreed that capital and profit or loss ratio will be 50:50, and that additional investment is to be
made to raise the total capital to P250,000.
Noncash assets should be adjusted to their market values of P120,000 to Sharmaine, and P190,000 to Dyan
Jean. Unrecorded liabilities in the books of Sharmaine amounting to P5,000 and accrued interest on notes
payable of Dyan Jean in the amount of P5,000 is to be recognized. Prepaid rent in the books od Dyan Jean
amounting to P6,000 is to be recorded.
22. The amount invested by Sharmaine to conform with the agreement without tax consideration is
a. P10,000
c. P35,000
b. P40,000
d. P45,000
23. The amount to be invested by Dyan Jean so that their capital will conform with the agreement
considering a tax rate of 30% is
a. P20,300
c. P 49,000
b. P40,300
d. P125,000
At the start of 2012, Manny and Kimby formed a partnership with each contributing P100,000. They agreed
that profits will be divided equally, but in case of losses, Manny, the manager, will only share up to 30% after
allowing 10% interest on their average capital. During 2013, the following changes are presented as follows:
Manny
January 1
April 1
July 1
September 1
October 1

Kimby
100,000
50,000

100,000

30,000

70,000
30,000
20,000

110,000

The first year of operations resulted to a loss of P80,000.

24. The average capital of Kimby amounts to
a. P127,500
c. P152,500
b. P134,700
d. P178,660
25. At the end of 2013, the capital of Manny will reflect
a. P18,900 decrease
b. P18,900 increase
c. P20,350 increase
d. P21,100 increase

Practice Test ACCO 2026 Midterm Examination

SET B Exam Academic Year 2013-2014

Sunny admits Yoona for a partnership interest in her business. The balances of the accounts of Sunny on July 1,
2013 prior to the admission of Yoona are as follows: Accounts Receivable, P480,000; Merchandise Inventory,
P720,000; Accounts Payable, P248,000, and a certain amount of cash. It was agreed that for purposes of
establishing Sunnys interest, an allowance for uncollectible accounts of 25% of accounts receivable is to be
established. Also, the merchandise inventory is to be valued at P800,000. Lastly, prepaid expenses of P10,000
is to be recognized. Yoona invested cash of P568,640 to give her a third interest in the total capital of the firm.
26. The capital balance of Sunny before Yoonas admission is
a. P1,056,880
c. P1,150,000
b. P1,136,400
d. P1,252,500
27. The total amount of partnership cash account after Yoonas admission will be
a. Cannot be determined c. P673,520
b. P568,640
d. P753,040
Fei, Jia, and Suzy are partners sharing profits and losses in the ratio 3:3:2. On July 31, 2013, their capital
balances are: Fei, P700,000; Jia, P500,000; Suzy, P400,000. The partners agree to admit a new partner, having
this new partner pay Fei P500,000 for half of Feis interest. The new partner is also to invest P400,000 in the
partnership. The total capital of the partnership is to be P2,400,000, in which the new partners interest is to be
25%. Revaluation of asset will be executed.
28. The capital balance of Suzy after the admission of the new partner is
a. P137,500
c. P537,500
b. P400,000
d. P556,250
Junsu and Jaejoong are partners whose profit and loss percentages are 60% and 40%, respectively. The book
values of the partners capital balances are P136,500 for Junsu and P91,000 for Jaejoong. The partners have
agreed to admit Yoochun as a partner for a 25% interest in the firm and invested cash of P43,750 and noncash
assets having a book value of P150,000 with fair values of P113,750. The bonus method is used to record the
admission of the new partner. Yoochun will share 25% in profits and losses while the original partners will
share in their original sharing ratio.
The original partners agreed to revaluate their assets before the admission of Yoochun. An analysis of their
noncurrent assets revealed the following:

Accounts Receivable
Inventories
Equipment

Carrying value
P210,000
350,000
619,500

Fair value
P192,500
420,000
654,500

29. The capital balance of Jaejoong after Yoochuns admission will be

a. P 91,000
c. P126,000
b. P115,500
d. P141,750
Park Shinhye and Park Minyoung are partners with capital balances of P60,000 and P140,000, respectively, as
of March 30, 2013. Park Shinhye has a 30% interest in capital and profits and losses while Park Minyoung has
a 70% interest in capital and profits and losses. On this date, all the assets of the partnership are at fair market
values, except on these elements:

Equipment
Inventory
Building
Land

Book value
P300,000
86,000
548,000
120,000

Market value
P284,000
72,000
500,000
210,000

The partners decided to admit Kim Taehee and Kim Jiwon into the partnership. Kim Taehee contributed cash
of P110,000 for a 20% interest in capital and 30% share in profits and losses. Kim Jiwon contributed cash of
P20,000 and equipment with a fair value of P100,000 for a 25% interest in capital and a 35% share in profits
and losses. After the admission, the Parks made settlement among themselves so that their capital will conform
with the new ratios provided. The bonus method is used to account the admission of the Kims.
30. The new profit and loss ratio immediately after the admission of the Kims will be
a. The Parks, 30%, 70%; The Kims, 30%, 35%
b. The Parks, 30%, 70%; The Kims, 20%, 25%
c. The Parks, 10.5%, 24.5%; The Kims, 30%, 35%
d. The Parks, 16.5%, 38.5%; The Kims, 20%, 25%
e. None of the given choices
Practice Test ACCO 2026 Midterm Examination
SET B Exam Academic Year 2013-2014

31. The capital balance of Park Minyoung that conform to the capital ratio is
a. P144,400
c. P170,170
b. P166,170
d. P194,900
The partnership of Ira, Lana, and Aira have capital account balances as: Ira, P35,000; Lana, P50,000; Aira,
P40,000. Their profit and loss ratios are 30%, 50%, and 20%, respectively. With the consent and knowledge of
Ira and Lana, Aira sold her interest to Lian for P50,000. Aira was paid in cash.
32. Lanas new capital balance at Airas retirement will be
a. P47,500
c. P50,000
b. P49,800
d. P63,000
The following balances were taken from the books of Catleens, Ann Louises, and Traceys partnership on
December 31, 2013: Catleen, Capital P200,000; Catleen, Loan P50,000; Ann Louise, Capital P120,000;
Ann Louise, Loan P20,000 debit; Tracey, Capital P60,000. The partners share profits and losses in the ratio
4:3:3. Tracey decided to withdraw from the partnership on April 1, 2013 after suffering from financial
problems. In the first quarter of 2013, the partnership made a profit of P54,000. The partners agreed to make
the following adjustments to their assets to bring the balances to their fair value before the withdrawal of
Tracey:

Allowance for uncollectible accounts of P20,000 should be provided.

Inventories are to be reduced by P25,000.

The partnership paid Tracey her interest plus 20% premium based on her adjusted capital for her contribution
in the successful operation of the firm.
33. How much did Tracey received from her retirement?
a. P55,800
c. P75,240
b. P72,000
d. P91,440
Rojean, Vielka, and Marie formed a partnership. On December 31, 2013, the firm had the following balances:
Total Assets P100,000; Rojean, Loan P9,000; Rojean, Capital P15,000; Vielka, Capital P31,000. The
partners divide profits with a ratio of 4:3:3. Rojean is retiring from the partnership. By mutual agreement, the
assets are to be adjusted to their fair value of P130,000 at October 31, 2013. Vielka and Marie agreed that the
partnership will pay Rojean P37,000 cash for her partnership interest, exclusive of her loan which is to be paid
in full.
34. How much is Maries capital balance after Rojeans retirement?
a. P49,000
c. P53,000
b. P51,000
d. P59,000
Jeiah, Jenah, Mickloth, and Mallothi are partners who have capital balances of P54,000. P72,000, P90,000, and
P64,000 respectively. Their partnership agreement calls for the allocation of profits in the ratio of 2:3:3:2,
respectively. Mallothi is withdrawing from the partnership to marry Lee Min-Ho.
35. If Mallothis interest is sold for P74,000, the entry to record Mallothis withdrawal will include
a. Debit Jeiah, Capital, P2,500
b. Credit Bonus, P10,000
c. Debit Bonus, P10,000
d. Debit Mallothi, Capital, P74,000
Lorna, Troy, and Sheryl are partners sharing profits on a 5:3:2 ratio. On January 2, 2013, Seed was admitted
into the partnership with a 20% share in profits. The old partners continue to share profits or losses in their
original ratios. For 2013, the partnership books presented a net income before income tax of P125,000. It was
disclosed, however, that the following errors and omissions were noted:
2012
Understatement of Depreciation expense of one of the
companys property, plant, and equipment.
Unused supplies not taken up
Advances from clients recorded as revenue
Understatement of inventory
Accrued expense not recorded

2013
P2,500

P2,500
1,000
5,000
3,100

1,200

36. Assuming an income tax rate of 35%, the adjusted net income of the partnership for 2013 is
a. P76,765
c. P79,820
b. P79,040
d. P81,250
Practice Test ACCO 2026 Midterm Examination
SET B Exam Academic Year 2013-2014

The partnership of Chanyeol, Suho, and Baekhyun has been in business for five years. On December 31, 2013,
Suho decided to retire from the partnership and he was paid P420,000 cash and land with a market value of
P840,000. The carrying amount of the land was P700,000. The partnership reported the following capital
balances at December 31, 2013: Chanyeol, Capital P1,050,000; Suho, Capital P1,400,000; Baekhyun,
Capital P840,000.
37. If the partners share profits and losses in the ratio 2:3:5, what are the capital balances of Chanyeol
and Baekhyun after Suhos retirement?
a. P1,026,000 and P 780,000
b. P1,078,000 and P 910,000
c. P1,090,000 and P 940,000
d. P1,130,000 and P1,040,000
Bae Suzy is trying to decide whether to accept a salary of P40,000 or a salary of P25,000 plus a bonus of 10%
of net income after salaries and bonus as a means of allocation profit among the partners. Salaries traceable to
the other partners are estimated to be P100,000.
38. What amount of income would be necessary so that Bae Suzy would consider the choices to be equal?
a. P165,000
c. P290,000
b. P265,000
d. P305,000
Andrea, Jubilee, and Rhoan are partners with capital balances on June 30,2013 of P60,000, P60,000 and
P40,000, respectively. Profits and losses are shared equally. Rhoan withdraws from the partnership. The
partners agree that Rhoan is to take certain furniture at their second hand value of P2,400 and cash for the
balance of her interest. The furniture is carried on the books as fully depreciated.
39. The amount of cash to be paid to Rhoan and the capital balances of the remaining partners after the
retirement of Rhoan will be
a. P40,000; P60,000 Andrea; P60,000 Jubilee
b. P37,600; P61,200 Andrea; P61,200 Jubilee
c. P38,400; P60,800 Andrea; P60,800 Jubilee
d. P42,800; P58,800 Andrea; P58,800 Jubilee
Rox, Marge, and Jenny are partners with capital balances on December 31, 2013 of P300,000, P300,000, and
P200,000 respectively. Profit are shared equally. Jenny wishes to withdraw from the partnership and it is
agreed that she is to take certain furniture and fixtures with second hand value of P50,000 and note for the
balance of her interest. The furniture and fixtures are carried in the books at P65,000. Brand new, the furniture
and fixtures may cost P80,000.
40. Jennys acquisition of the second hand furniture will result to
a. Reduction in capital of p15,000 each for Rox and Marge.
b. Reduction in capital of P10,000 for Jenny.
c. Reduction in capital of P5,000 each for Rox, Marge, and Jenny.
d. Reduction in capital of P7,500 each for Rox and Marge.
Sungmin, Ryeowook, and Siwon who divide profits and losses on 4:4:2 basis have the following balances on
June 30, 2013:
Accounts Receivable Sungmin, pre-settlement value
Accounts Receivable Siwon, pre-settlement value
Ryeowook, Loan pre-settlement value
Sungmin, Capital
Ryeowook, Capital
Siwon, Capital

P24,000
9,600
28,800
118,800
88,800
78,000

On this date, the partnership assets are P534,400 including the receivables from partners and cash of P28,000.
The partnership liquidated and they distributed the remaining cash after paying outside creditors amounting to
P220,000 and liquidation expenses of P12,000.
41. How much should the noncash assets be realized in order for Siwon to receive P30,000?
a. P252,800
c. P292,800
b. P280,800
d. P320,800
42. How much did Sungmin and Ryeowook receive in the final settlement?
a. P18,000 and P 40,800
b. P22,800 and P 45,600
c. P42,000 and P 12,000
d. P94,800 and P117,000
Practice Test ACCO 2026 Midterm Examination
SET B Exam Academic Year 2013-2014

Patricia, Mariel, Ella, and Angela are partners sharing earnings in the ratio 3:4:6:8. The balances of their
capital accounts on March 31, 2013 are as follows: Patricia, P30,000; Mariel, P75,000; Ella, P25,000; Angela,
P90,000. The noncash assets of the partnership include receivable from Mariel in the amount of P5,000. The
partners decided to liquidate and they accordingly converted noncash assets into P237,000 cash. After paying
the liabilities amounting to P153,000 and liquidation expenses of P15,000, they still have P72,000 to divide.
43. The loss on realization amounts to by how much?
a. P 43,000
c. P133,000
b. P128,000
d. P136,000
Kim, Lee, Park, and Choi have been operating a partnership for ten years. Due to unfavourable operation, the
partners agreed to liquidate the partnership on January 2, 2013. At the time of liquidation, account balances
consisted of: Cash, P207,000; Noncash assets, P600,000; Liabilities, P120,000; Capital balances P180,000,
P300,000, P240,000, and (P33,000). Profits and losses are shared equally by the partners. The assets are
realized, liquidation expenses of P9,000 and unrecorded liabilities of P15,000 were paid. At the end of the
liquidation process, Kim received P150,000 in the final settlement. Choi is a solvent partner.
44. The amount realized from the sale of noncash assets amount to by how much?
a. P480,000
c. P556,000
b. P504,000
d. P600,000
Kazumi, Hisako, and Hikari have capital balances of P30,000, P15,000 and P5,000 respectively. The general
partnership agreement is silent as to the manner in which partnership losses are to be allocated but does
provide that partnership profits are to be divided as 40:25:35. The partners have decided to dissolve and
liquidate the partnership. After paying all creditors, the amount available for distribution is P20,000. All
partners are solvent.
45. In the final settlement, Kazumi receives
a. P5,385
c. P14,615
b. P7,500
d. P18,000
46. In the final settlement, Hikari receives
a. P -0c. P5,500
b. P5,385
d. P7,500
Shim Hana, Eun Bomi, Kim Seohyeon, and Go Nari are partners sharing profits and losses in the ratio of
3:4:6:8. Their capital balances are: Hana, P8,000; Bomi, P200,000; Seohyeon, P200,000; Nari, P72,000. The
partners decided to liquidate, and they accordingly converted noncash assets into P185,600. After paying
liabilities amounting to P24,000, they have P177,600 to divide. Assume that a debit balance of any partners
capital is uncollectible.
47. The book value of the noncash assets amounts to
a. P201,600
c. P488,000
b. P363,200
d. P504,000
Clarise, Teresa, and Amabelle share profits and losses equally. They formed the partnership five years ago
with each contributing P250,000 cash. The partners decided to liquidate their partnership on January 3, 2013.
On this date, their capital balances are P150,000, P100,000 and P100,000 respectively. They have liabilities of
P150,000 and cash in bank of P50,000. The partners received a lump sum offer of P300,000, and all partners
agreed. They distributed cash among themselves after paying all liabilities and P15,000 expenses.
48. How much did Clarise receive from the partnership?
a. P85,000
c. P100,000
b. P95,000
d. P150,000
After operating for five years, the books of the partnership of Vic and Nora showed the following balances:
Net assets P130,000; Vic, Capital P85,000; Nora, Capital P45,000.
49. If liquidation takes place at this point and the net assets are realized at book value, the partners are
entitled to
a. P65,000 and P65,000
b. P85,000 and P45,000
c. P90,000 and P40,000
d. P97,500 and P32,500

Practice Test ACCO 2026 Midterm Examination

SET B Exam Academic Year 2013-2014

Partners Choi Sulli, Choi Minho, Kim Jiwon, and Lee Hyunwoo who share profits and losses at 30%, 30%,
20%, and 20% respectively decided to liquidate because of substantial losses the company is incurring after
efforts of reorganization. Prior to liquidation, the condensed statement of financial position is a follows:
TTBY Partnership
Statement of Financial Position
December 31, 2013
ASSETS
Cash
Noncash assets
TOTAL ASSETS

P 100,000
1,800,000
P1,900,000

LIABILITIES AND EQUITY

Liabilities
Choi Minho, Loan
Lee Hyunwoo, Loan
Choi Sulli, Capital
Choi Minho, Capital
Kim Jiwon, Capital
Lee Hyunwoo, Capital
TOTAL LIABILITIES AND EQUITY

P 750,000
60,000
50,000
420,000
315,000
205,000
100,000
P1,900,000

The noncash assets were realized at P800,000. All the partners are solvent, and can contribute additional cash
to cover any deficiency.
50. In the process of liquidation, deficiencies will occur and will require additional investment by
a. Kim Jiwon at P7,500.
b. Lee Hyunwoo and Kim Jiwon at P50,000 and P7,500 respectively.
c. Lee Hyunwoo at P50,000.
d. Choi Sulli and Choic Minho at P45,000 and P3,500 respectively.
e. None of the given choices.

- End of Examination -

You are my shield, my strength

My portion, deliverer
My shelter, strong tower
My very present help in times of need, Jesus.

Practice Test ACCO 2026 Midterm Examination

SET B Exam Academic Year 2013-2014

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