Problem 1 Solution 1

Partner A contributed the following: Agreed Value = 1,400,000

Book Value Fair Value Agreed Value

Cash 1,000,000 1,000,000 1,000,000
Equipment 200,000 500,000 400,000

What amount should be credited to partner's A capital?

Problem 2 1
The partners A, B & C agreed on the following profit distribution: A
300,000.00
Salaries to partner A of P300,000 yearly
Bonus to Partner C of 10% of Net Income after Salaries and Bonus 500,000.00
Remainder will be distributed on a 1:5:4 ratio 800,000.00

How much is Partner C's share in the profit if the partnership earned P5,800,000

Problem 3
Parters AA and BB have a capital balance of P500,000 and P200,000 respectively. During 2024 they have agreed to admit CC. CC purchases 20% of both par
capital balance of CC after his admission

Problem 4
AA and BB decided to form a partnership. The non cash assets contributed by AA and BB amounts to P1,475,000 & P1,112,500, respectively. AA and
BB are to invest equal amounts of cash such that the total contribution of AA would be 20% more than BB. How much is the capital balance of BB
after formation?
AA and BB decided to form a partnership. The non cash assets contributed by AA and BB amounts to P1,475,000 & P1,112,500, respectively. AA and
BB are to invest equal amounts of cash such that the total contribution of AA would be 20% more than BB. How much is the capital balance of BB
after formation?

f
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Problem 5
AA, BB, and, CC opened a partnership and had the following profit and loss distirubtion agreement:

Salaries of 300,000 , 400,000, and 200,000 for AA, BB, and CC, respectively
Bonus of 7% of Net Income after Salaries and Bonus to BB
Remainder to be divided in a 5:9:6 ratio

If CC obtained 1,700,000 for his distribution, how much is the income earned by the partnership?

Problem 6

AA and BB had a capital balance of P300,000 and P400,000 respectively. The partners agreed
to admit CC who invested cash equal to 5/6 of his Agreed capital for a 40% interest in the
partnership. AA and BB had a profit and loss ratio of 4:3. What is AA's capital balance after
admission of CC.
AA and BB had a capital balance of P300,000 and P400,000 respectively. The partners agreed
to admit CC who invested cash equal to 5/6 of his Agreed capital for a 40% interest in the
partnership. AA and BB had a profit and loss ratio of 4:3. What is AA's capital balance after
admission of CC.

Problem 7
AA's assets are 2x that of BB's assets while AA's liabilities are 3/5 of AA's assets. BB's liabilities on the other hand
are 1/4 of AA Assets. How much are BB's assets if the total net contribution of AA is P45,000 more than of BB

Problem 8
Partners AA, BB, and CC formed a parntership by investing P2,000,000, P1,500,000 and P4,000,000 respectively.
During 2023 the partnership earned P2,000,000 in Net Income. The partners agreed to the following distribution
of profits. Salaries of P200,000 , P100,000, and P150,000 respectively. Interest of 10% of their original capital
balance. The remainder is to be distributed in the ratio of 3:5:2. The partners also agreed that BB is entitled to a
minimum share in the net income of P800,000 and that the other 2 partners would give a part of their income in
prorportionate to their P/L ratio in the even the P800,000 minium share is not met. How much is the share in the
Net Income of AA.
Partners AA, BB, and CC formed a parntership by investing P2,000,000, P1,500,000 and P4,000,000 respectively.
During 2023 the partnership earned P2,000,000 in Net Income. The partners agreed to the following distribution
of profits. Salaries of P200,000 , P100,000, and P150,000 respectively. Interest of 10% of their original capital
balance. The remainder is to be distributed in the ratio of 3:5:2. The partners also agreed that BB is entitled to a
minimum share in the net income of P800,000 and that the other 2 partners would give a part of their income in
prorportionate to their P/L ratio in the even the P800,000 minium share is not met. How much is the share in the
Net Income of AA.

Problem 9
AA, BB and CC are partners in a bakery partnership. At the start of their 5th year AA decided to withdraw from
the partnership. AA, BB, and CC had a capital balance of P200,000, P350,000, and P400,000 respectively just
before the withdrawal of AA. BB's capital balance after withdrawal of AA however became P442,000 after giving
a bonus of P8,000 to AA for his withdrawal. How much is CC's capital after AA's withdrawal from the partnership
assuming that the fair value of the assets of the partnership did not match its cost and the partners decided to
revaluate their property

Problem 10
AA and BB are partners in a general partnership. AA and BB had a capital balance of P400,000 and P500,000 at
the start of the year. Movement in their capital balances are as follows. AA invested P300,00 on July 31 and
P500,000 on December 31. AA also withdrew P150,000 on November 30. BB on the other hand invested
P200,000 on March 31 and temporary withdrew P200,000 on November 30. The partner's agreed on a 10%
interest on their average capital. How much is the total interest to be allocated to both AA and BB

Problem 11
AA and BB formed a partnership on December 31. Below is the book value of AA and BB in their previous business.

AA BB
Cash 200,000 400,000
Inventory 100,000 300,000
PPE 200,000 600,000
Receivables 80,000 140,000

Accounts P 100,000 60,000

Capital 480,000 1,380,000

The following were agreed by the partners

1.) Inventory of AA is understated by P100,000 while BB's inventory was overstated by P50,000
2.) PPE additional accumulated depreciation should be reocnized on BB's PPE in the amount of P200,000
3.) Allowance for doubtful accounts should be recognized in BB's receivable in the amount of P20,000
4.) Accrued expenses of P40,000 should be accrued in the books of BB
5.) AA forgot to recognized Notes Receivables dated July 31 of that year for P150,000. Interest of 10% should also be accrued

How much is the total agreed capital of the partnership?

Problem 12
AA and BB formed a partnership by investing P200,000 and P600,000 worth of Non-cash asset. The partner's
agreed that their profit and loss ratio should be 3:2. The partner's also agreed that their capital ratio should be
equal to their profit and loss ratio by one partner investing the needed cash. How much is the total cash of the
partnership?

Problem 13
On July 1, 2023 AA and BB formed a partnership by investing P1,000,000 and P800,000 respectively. The partnership earned a net
income of P1,580,000 during its first years of operations. The partners agreed to divide the profits as follows: 1.) Yearly Salary of
P500,000 and P400,000 respectively 2.) Bonus of 10% of Net Income after salaries to BB. 3.) Remainder to be distributed in the
ratio of 6:4

During 2024 the partners changed their profit and loss distribution to be distributed equally. The partnership earned a profit of
P2,000,000 during 2024. However it was also found out that in addition to the P2,000,000 earned during 2024 a profit of P200,000
was not recognized during 2023. How much is the capital balance of BB on December 31, 2024
Problem 14
AA and BB formed a partnership during 2023. BB was offered a profit or loss ratio either to obtain a Salary of P500,000 yearly with
a bonus of 5% after salaries and bonus and the remainder to be split equally or a 10% Bonus after salaries and bonus with the
remainder to be split 3:7. AA would have a Salary of P200,000 and a 5% Bonus in either profit or loss arrangement. What amount of
income should the partnership obtain for BB to be indifferent to the agreements

Problem 15
AA and BB formed a partnership during 2023 with an equal profit and loss ratio. In 2024 the partners agreed to admit CC by way of
investment. CC invested P500,000 for a 40% interest in the partnership. The Capital balances of AA and BB just before admission
was P800,000 and P600,000 respectively. The agreed capital of the partnership was P2,000,000. What is the capital balance of AA
after admission of CC?
AA and BB formed a partnership during 2023 with an equal profit and loss ratio. In 2024 the partners agreed to admit CC by way of
investment. CC invested P500,000 for a 40% interest in the partnership. The Capital balances of AA and BB just before admission
was P800,000 and P600,000 respectively. The agreed capital of the partnership was P2,000,000. What is the capital balance of AA
after admission of CC?
 5 4 10
B C Total 5,800,000
300,000 5,500,000
500,000.00 500,000 5,000,000
2,500,000.00 2,000,000.00 5,000,000.00 -
2,500,000.00 2,500,000.00

CC. CC purchases 20% of both partner's interest for P500,000. What is the

2,500, respectively. AA and Algebra Let x be the amount of cash contribution

the capital balance of BB
Formula We know that AA's Contribution is 20% more than BB's Contribution
AA Contribution = BB Contribution * (1+20%)
2,500, respectively. AA and
the capital balance of BB

Formula 1,475,000 + x = (1,112,500 + x ) *1.2

x = 700,000

Answer BB Contribution
1,112,500 + 700,000
1,812,500

Step
First Step
We first plot all the numbers we know
ratio 5 9 6 20
A B C Total ? Income
Salary 300,000.00 400,000.00 200,000.00 900,000 ? Second Step
Bonus Third Step Third Step ?
Remainder ? ? First Step* Second Step* -
? ? 1,700,000.00
Third Step

Fourth Step

CC AC Bonus 33% because agreed capital 40% * 5/6 to get

AA 300,000 ? ? if CC is 33% it means AA and BB is 77% hence
BB 400,000 ? ? There is also no revaluation of assets hence w
CC 33% of CC's AC 40% of Total AC ? 40% 40% of total AC (1,050,000 *40%) = 420,000
? ? Distirbuted based on P/L

CC AC Bonus
AA 300,000 260,000 (40,000)
BB 400,000 370,000 (30,000)
CC 350,000 420,000 70,000 40%
1,050,000.00 1,050,000.00
33%

Let x be BB' assets

Formula AA contribution = (BB Contribution) + 45,000
Contribution = Assets - Liabilities

AA Contribution = 2x - (3/5 * 2x)

BB Contribution = x - (1/4 * 2x)

2x - (3/5 *2x) = x - (1/4 * 2x) + 45,000

x = 150,000

Beginning Cap 2,000,000 1,500,000 4,000,000

Ratio 3 5 2 10
AA BB CC Total 2,000,000
Salaries 200,000 100,000 150,000 450,000 1,550,000
Interest 200,000 150,000 400,000 750,000 800,000
Remainder 240,000 400,000 160,000 800,000 0
640,000 650,000 710,000 Since BB did not reach the 800k Minimum AA and CC should
share the difference of P150,000 to give to BB
Distribution (90,000) 150,000 (60,000) -
550,000 800,000 650,000 2,000,000

200 350 400 950 750

AA BB CC Total
Capital 200,000 350,000 400,000 950,000
Revaluation 57,143 100,000 114,286 271,429
Ending 257,143 450,000 514,286 1,350,000
Bonus 17,142.86 (8,000.00) (9,142.86) -
274,286 442,000 505,143 1,350,000

1.) We kno that there is a revaluation of asset + Bonus hence the change in capital of BB should only be from those 2
2.) BB Capital of 442,000 after giving bonus of 8,000. Hence we know that the capital of BB BEFORE giving bonus is 450,000 (442,000 + 8,000)
3.) The Capital balance of BB before withdrawal was P350,000 but before bonus it was P450,000 hence the difference is a P100,000 Revaluation of assets for BB
4.) BB CC Total
Capital 350,000 400,000
Revaluation 100,000 114,286 271,429 = 100,000 / (350/950)
Ending 450,000 514,286
Bonus (8,000) (9,143) = 271,429 * (350/950)
Ending 442,000 505,143
We based it from B's bonus ( 8,000 / (350/750) ) * 400/950
Note that th P/L ratio here is diff since only 2 partners will share from AA

Date AA BB AA BB
BC Jan 400,000 500,000 400,000 500,000
Investment March 200,000 150,000
Investment July 300,000 125,000
Withdrawal November (150,000) (12,500)
Temporary WithdNovember (200,000) -
Investment 31-Dec 500,000
1,050,000 500,000 512,500 650,000
10% 10%
51,250 65,000 116,250

Capital 480,000.00
1,380,000.00
1,860,000.00
1 100,000.00
(50,000.00)
2 (200,000.00)
3 (20,000.00)
4 (40,000.00)
5 150,000 N/R
6,250 Interest
1,806,250.00
BB Cap 600,000
Ratio 2/5
Agreed Capital 1,500,000
AA ratio 3/5
AA 900,000
AA Non cash asset (200,000)
Cash Invested 700,000.00

6 4 10
2023 AA BB Total 1,780,000 The income here should be adjusted for the missing income
Salaries 250,000 200,000 450,000 1,330,000
Bonus 133,000 133,000 1,197,000
Remainder 718,200 478,800 1,197,000 -
968,200 811,800 1,780,000 -

2024 1 1 2
AA BB Total 2,000,000
Remainder 1,000,000.00 1,000,000.00 2,000,000.00
1,000,000.00 1,000,000.00 2,000,000.00

Capital 1,000,000 800,000

2023 968,200 811,800
2024 1,000,000.00 1,000,000.00
2,968,200 2,611,800
 1482051.282051
1,477,777.78
Situation 1
5 5 10
2023 AA BB Total 1,477,778
Salaries 200,000 500,000 700,000 777,778
70,707.07 Bonus 35,354 35,354 70,707 707,071 166,666.67
Remainder 353,535 353,535 707,071 0
588,889 888,889 1,477,778 -

Use this formula below :))

Salary Bonus Remainder

CC AC Revaluation Bonus
AA 800,000.00 700,000.00 50,000.00 (150,000.00)
BB 600,000.00 500,000.00 50,000.00 (150,000.00)
CC 500,000.00 800,000.00 300,000.00
1,900,000.00 2,000,000.00 100,000.00
AA, Cap 500,000
BB, Cap 200,000
Total Cap 700,000
Interest Purchased 20%
140,000.00
 Description Amount to place
We can work back C's share in the remainder. Since C received
P1,700,000 and he has a Salary of P200,000. His share in the
1,500,000
remainder is P1,500,000

We now have C share of P1,500,000 which is distributed based on

P/L. Hence, we just divide it by his p/l ratio of 6/20. P1,500,000 / 6/20
5,000,000

If 5,000,000 is the remainder. It also means it is the Income after

Salaries and Bonus which is also the basis of our bonus. Hence 350,000
5,000,000 * 7% = Bonus

We now add all the allocation 5,000,000 + 350,000 + 900,000

(Remainder + Bonus + Salaries) to get the total income
6,250,000

% because agreed capital 40% * 5/6 to get his contributed capital

 C is 33% it means AA and BB is 77% hence 700,000 / 66.67% = Total Contributed Capital
ere is also no revaluation of assets hence we can copy Total CC = Total AC
% of total AC (1,050,000 *40%) = 420,000
tirbuted based on P/L
ach the 800k Minimum AA and CC should
e of P150,000 to give to BB

442,000 + 8,000)
00,000 Revaluation of assets for BB

100,000 / (350/950)

(350/750) ) * 400/950
ce only 2 partners will share from AA
hould be adjusted for the missing income
Situation 2
3 7 10
2023 AA BB Total 1,477,778
Salaries 200,000 - 200,000 1,277,778
Bonus 55,556 111,111 166,667 1,111,111
Remainder 333,333 777,778 1,111,111 -
588,889 888,889 1,477,778 -

Bonus Remainder