QUIZ NO.

6 AND 7
ANSWERS
Quiz 6
1. A and B to contribute P300,000 each

1 Cash 600,000
A, Capital 300,000
B, Capital 300,000
 2. A to contribute P400,000 cash representing 20% of the total
partnership capital and B will contribute the balance in the form
of merchandise inventory.

2 Cash 400,000
Merchandise Inventory 1,600,000
A, Capital 400,000
B, Capital 1,600,000

How?
400,000/0.20 = 2,000,000
3. A, B and C agreed that the partnership capital should be
P450,000 but there was no agreement on how much is to be
contributed by each of the partner.

3 Cash 450,000
A, Capital 150,000
B, Capital 150,000
C, Capital 150,000
4. A, B and C to contribute the following:
A – Cash, P100,000
B – Land, acquired two years ago at P60,000. Its
present market value is P100,000
4 Cash 120,000
Land 100,000
Merchandise Inventory 80,000
A, Capital 100,000
B, Capital 100,000
C, Capital 100,000
 5. A, B and C to contribute the following:
A – Cash, P60,000 and equipment with a book value of P100,000. The parners
agreed to value the equipment at P80,000.
B – Land, with fair market value is P150,000. The land is subject to a mortgage of
P30,000 assumed by the partnership.
C – an industrial partner who shares 10% in the partnership profits.

5 Cash 60,000 C is an industrial partner who will share

Equipment 80,000 10% of partnership profit.
Land 150,000
Notes Payable 30,000 Signed:
A, Capital 240,000 A
B, Capital 120,000 B
C
6. A and B to contribute cash equal to the total
agreed capitalization of P240,000. A contribute
one-third(1/3), and B to contribute two-third
(2/3) of the total agreed capitalization.

6 Cash 240,000
A, Capital 80,000
B, Capital 160,000
7. A to contribute cash of P140,000 for 40%
of the total agreed capitalization. B to
contribute the remaining in cash.

7 Cash 350,000
A, Capital 140,000
B, Capital 210,000
8. A to contribute land with fair market value of
P60,000 and book value of P50,000, plus cash. B
to contribute P130,000 cash for 65% claim in the
partnership’s assets.

8 Cash 140,000
Land 60,000
A, Capital 70,000
B, Capital 130,000
9. A to contribute land at agreed value of P75,000 and
unpaid mortgage of P25,000 to be assumed by the
partnership. B to contribute cash equal to 50% of total
partnerships capitalization based on A’s contribution.

9 Cash 75,000
Land 75,000
Mortgage Payable 25,000
A, Capital 50,000
B, Capital 75,000
10. A to contribute his skill as industrial
partner. B to contribute cash for the total
partnership capitalization of P250,000.
10 Cash 250,000
B, Capital 250,000
A is an industrial partner.
Signed:
A
B
11. A to contribute his skill plus P50,000 cash as
industrial-capitalist partner. B to contribute cash
equal to 75% of the total agreed capitalization.

1 1 Cash 200,000
A, Capital 50,000
B, Capital 150,000
12. A to contribute P140,000 based on
agreed capitalization.

12 Cash 140,000
A, Capital 140,000
D, G and S had agreed to contribute their properties to form a partnership. D, a sole proprietor
has the following assets and liabilities;

Debit Credit

Cash P120,000
Accounts receivable 250,000
Allowance for bad debts 10,000
Merchandise inventory 100,000
Unused office supplies 30,000
Furniture and Equipment 150,000
Accumuated Depreciation P60,000
Accounts payable 40,000
Accrued expenses 20,000
Adjusting Entries:
1. Allowance for bad debts should be adjusted at 10% of
accounts receivable

D, Capital 15,000
Allowance for bad debts 15,000

Required Allowance(250,000x10%) 25,000

Less: Recorded allowance 10,000
Increase in Allowance 15,000
Adjusting Entries:
2. Merchandise Inventory should be valued at P120,000

Merchandise Inventory 20,000

D, Capital 20,000

Required Value of Merchandise Inventory 120,000

Less: Recorded value 100,000
Increase in Value of Mer. Inv. 20,000
Adjusting Entries:
3. Damaged office supplies amounting to P10,000 should
be writen off.

D, Capital 10,000
Office Supplies Expense 10,000
Adjusting Entries:
4. Net book value of furniture and equipment should be
P70,000

D, Capital 80,000
Furniture and Equipment 80,000
Adjusting Entries:
5. Unrecorded expenses amounting to P5,000 should be
recognized.

D, Capital 5,000
Accrued Expense 5,000
 D, Capital

1 15,000 20,000 2
3 10,000 540,000 post closing
4 80,000
5 5,000
110,000 560,000
450,000
 D’S PROPRIETORSHIP
ADJUSTED TRIAL BALANCE
Debit Credit
Cash P120,000
Accounts receivable 250,000
Allowance for bad debts 15,000
Merchandise inventory 120,000
Unused office supplies 20,000
Furniture and Equipment 70,000
Accumuated Depreciation P60,000
Accounts payable 40,000
Accrued expenses 15,000
D, Capital 450,000
Total 580,000 580,000
Closing Entry for the books of D.

Allow. For bad debts 15,000

Accum. Dep’n 60,000
Accts. Payable 40,000
Accrued Expense 15,000
D, Capital 450,000
Cash 120,000
Accts. Receivable 250,000
Merchandise Inventory 120,000
Unused Office Supplies 20,000
Furniture and Equipment 70,000
To close the books of D’s Proprietorship.
Journal Entries in the books of partnership.

Cash 120,000
Accts. Receivable 250,000
Merchandise Inventory 120,000
Unused Office Supplies 20,000
Furniture and Equipment 70,000
Allow. For bad debts 15,000
Accum. Dep’n 60,000
Accts. Payable 40,000
Accrued Expense 15,000
D, Capital 450,000
Initial investment of D to the partnership.
G will contribute merchandise inventory with
agreed value of P80,000 and cash that would total
one-half of the adjusted capital of D. S, on the
other hand, agreed to give additional cash to make
the total capitalization of the partnership to
P1,000,000. They agreed to use a new set of
books.
Journal Entries in the books of partnership.

Cash (225,000+245,000) 470,000

Merchandise Inventory 80,000
G, Capital 305,000
S, Capital 245,000
Initial Investments of G & S.
QUIZ 7
Quiz 7 Problem 1.1
A, B and C formed a partnership with the following information:
A, a capitalist partner, is to contribute P600,000
B, a Capitalist and industrial partner, is to contribute P200,000
C, an industrial partner, is to contribute his skill.

ABC Partnership has a P600,000 credit balance of income summary account during one
year operation.

Required: Compute the profit share of each partner and make journal entries using the
following independent cases.

Case 1: A, B and C’s profit and loss sharing is 60%, 30%, 10%, respectively
Case 2: There was no agreement made regarding the partnership profit distribution.
Case 3: Each industrial partner will get 10% of the partnership’s net income and the
balance shall be distributed to the capitalists according to their capital contribution.
Quiz 7
Case 1: A, B and C’s profit and loss sharing is 60%, 30%, 10%,
respectively.
Computation: Journal Entry:
A 600,000x60% 360,000 Income Summary 600,000
B 600,000x30% 180,000 A, Capital 360,000
C 600,000x10% 60,000 B, Capital 180,000
Total 600,000 C, Capital 60,000
Quiz 7
Case 2: There was no agreement made regarding the
partnership profit distribution.
Computation: Journal Entry:
600,000(75%)+200,000(25%)=800,000 Income Summary 600,000
A, Capital 360,000
A 600,000x75/125 360,000
B, Capital 120,000
B 600,000x25/125 120,000
C, Capital 120,000
C 600,000x25/125 120,000
Total 600,000
Quiz 7
Case 3: Each industrial partner will get 10% of the
partnership’s net income and the balance shall be distributed
to the capitalists according to their capital contribution.
Computation: Journal Entry:
600,000(75%)+200,000(25%)=800,000 Income Summary 600,000
A, Capital 360,000
C, INDUSTRIAL 600,000x10% 60,000
B, Capital 180,000
B, INDUSTRIAL 600,000x10% 60,000
C, Capital 60,000
B, CAPITALIST 80%X25/100 120,000
A, CAPITALIST 80%X75/100 360,000
Total 600,000
Quiz 7 Problem 1.2
X, Y and Z formed a partnership with the following information:
X, a capitalist partner, is to contribute P300,000
Y, a capitalist and industrial partner, is to contribute P100,000
Z, an industrial partner, is to contribute his skill.

XYZ Partnership has a P100,000 debit balance of income summary account during one
year operation.

Required: Journalize the following independent cases:

Case 1: X, Y and Z’s profit and loss sharing is 60%, 30% and 10%, respectively
Case 2: There was no agreement made regarding the partnership profit distribution.
Case 3: Each industrial partner will get 10% of the partnership’s net income and the
balance shall be distributed to the capitalists according to their capital contribution.
Quiz 7
Case 1: X,Y and Z’s profit and loss sharing is 60%, 30% and
10%, respectively
Computation: Journal Entry:
X 100,000x60% 60,000 X, Capital 60,000
Y 100,000x30% 30,000 Y Capital 30,000
Z 100,000x10% 10,000 Z, Capital 10,000
Total 100,000 Income Summary 100,000
Quiz 7
Case 2: There was no agreement made regarding the
partnership profit distribution.
Computation: Journal Entry:
X 100,000x75% 75,000 X, Capital 75,000
Y 100,000x25% 25,000 Y Capital 25,000
Total 100,000 Income Summary 100,000
Quiz 7
Case 3: Each industrial partner will get 10% of the
partnership’s net income and the balance shall be distributed
to the capitalists according to their capital contribution.

Computation: Journal Entry:

Z 100,000x10% 10,000
Y 100,000x10% 10,000 X, Capital 60,000
Y 80,000x25% 20,000 Y Capital 30,000
X 80,000x75% 60,000 Z, Capital 10,000
Income Summary 100,000
Total 100,000