Quiz #2
Partnership Operations
I. Multiple Choice
1. This is the most equitable way of distributing profit.
a. average capital c. ending capital
b. beginning capital d. original capital
2. Epol and Apol are partners. But only Epol is the managing partner. Both contributed equal
assets. The best profit sharing ratio will be
a. equally.
b. salary to Epol and Apol, remaining profit to be shared equally.
c. salary to Epol, remaining profit to be shared equally
d. 1:1 ratio.
3. Accounts receivable invested by a partner should be recorded at its
a. realizable amount c. gross amount
b. book value d. market value
4. Jay and Kaye are partners who share profits and losses in the ratio of 60% and 40%,
respectively. Jay's salary is P60,000 and P30,000 for Kaye. The partners are also paid interest
on their average capital balances. In 2015, Jay received P30,000 of interest and Kaye,
P12,000. The profit and loss allocation is determined after deductions for the salary and
interest payments. If Kaye's share in the residual income (income after deducting salaries and
interest) was P60,000 in 2015, what was the total partnership income?
A. P192,000 C. P282,000
B. P345,000 D. P387,000
5. The partnership has the following accounting amounts:
(1) Sales = P70,000
(2) Cost of Goods Sold = P40,000
(3) Operating Expenses = P10,000
(4) Salary allocations to partners = P13,000
(5) Interest paid to banks = P2,000
(6) Partners' withdrawals = P8,000
The partnership net income (loss) is:
A. P20,000 C. P5,000
B. P18,000 D. P (3,000)
6. Lancelot 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 salary and bonus as a means of allocating profit among
the partners. Salaries traceable to the other partners are estimated to be P100,000. What
amount of income would be necessary so that Lancelot would consider the choices to be
equal?
A. P165,000 C. P265,000
B. P290,000 D. P305,000
7. Gary and Vi are considering forming a partnership whereby profits will be allocated through
the use of salaries and bonuses. Bonuses will be 10% of net income after total salaries and
bonuses. Gary will receive a salary of P30,000 and a bonus. Vi has the option of receiving a
salary of P40,000 and a 10% bonus or simply receiving a salary of P52,000. Both partners will
receive the same amount of bonus.
Partnership Operations
I. Multiple Choice
1. This is the most equitable way of distributing profit.
a. average capital c. ending capital
b. beginning capital d. original capital
2. Epol and Apol are partners. But only Epol is the managing partner. Both contributed equal
assets. The best profit sharing ratio will be
a. equally.
b. salary to Epol and Apol, remaining profit to be shared equally.
c. salary to Epol, remaining profit to be shared equally
d. 1:1 ratio.
3. Accounts receivable invested by a partner should be recorded at its
a. realizable amount c. gross amount
b. book value d. market value
4. Jay and Kaye are partners who share profits and losses in the ratio of 60% and 40%,
respectively. Jay's salary is P60,000 and P30,000 for Kaye. The partners are also paid interest
on their average capital balances. In 2015, Jay received P30,000 of interest and Kaye,
P12,000. The profit and loss allocation is determined after deductions for the salary and
interest payments. If Kaye's share in the residual income (income after deducting salaries and
interest) was P60,000 in 2015, what was the total partnership income?
A. P192,000 C. P282,000
B. P345,000 D. P387,000
5. The partnership has the following accounting amounts:
(1) Sales = P70,000
(2) Cost of Goods Sold = P40,000
(3) Operating Expenses = P10,000
(4) Salary allocations to partners = P13,000
(5) Interest paid to banks = P2,000
(6) Partners' withdrawals = P8,000
The partnership net income (loss) is:
A. P20,000 C. P5,000
B. P18,000 D. P (3,000)
6. Lancelot 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 salary and bonus as a means of allocating profit among
the partners. Salaries traceable to the other partners are estimated to be P100,000. What
amount of income would be necessary so that Lancelot would consider the choices to be
equal?
A. P165,000 C. P265,000
B. P290,000 D. P305,000
7. Gary and Vi are considering forming a partnership whereby profits will be allocated through
the use of salaries and bonuses. Bonuses will be 10% of net income after total salaries and
bonuses. Gary will receive a salary of P30,000 and a bonus. Vi has the option of receiving a
salary of P40,000 and a 10% bonus or simply receiving a salary of P52,000. Both partners will
receive the same amount of bonus.
