SOL._MAN._CHAPTER_1_PARTNERSHIP_FORMATION_2020

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Chapter 1
Partnership Formation

PROBLEM 1: TRUE OR FALSE
1. FALSE
2. TRUE
3. FALSE – ₱2M
4. TRUE
5. FALSE – credited for ₱200
6. FALSE - .8M
7. TRUE (200 + 100) x 60% = 180
8. FALSE (200 + 100) x 40% = 120 capital credit – 100 contribution
= ₱20
9. TRUE
10. FALSE - ₱100


PROBLEM 2: MULTIPLE CHOICE – THEORY
1. A
2. C
3. A
4. C
5. C

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PROBLEM 3: EXERCISES
1. Solution:
Sunny Gloomy Partnership
Cash 180,000 - 180,000
Accounts rec. (100K x 60%) 60,000 - 60,000
Inventory 120,000 - 120,000
Land - 600,000 600,000
Total 360,000 600,000 960,000
Accounts payable (60,000) - (60,000)
Adjusted capital balances 300,000 600,000 900,000

Date Cash 180,000
Accounts receivable 60,000
Inventory 120,000
Land 600,000
Accounts payable 60,000
Sunny, Capital 300,000
Gloomy, Capital 600,000



2. Solution:
Sunny’s contribution 300,000
Divide by: Sunny’s P/L ratio 30%
Total 1,000,000
Multiply by: Gloomy’s P/L ratio 70%
Minimum capital required of Gloomy 700,000
Gloomy's contribution 600,000
Deficiency in Gloomy's capital contribution (100,000)

Date Cash 100,000
Gloomy, Capital 100,000