EX-1. The partnership contract for the A and B Partnership provided that A is to

receive an annual salary of P 120,000, B is to receive an annual salary of P 80,000, and

the remaining profit or loss is to be divided equally between the two partners. Net income

of the A and B Partnership for the year ended December 31, 2020 was P 180,000. The

closing entry for net income on December 31, 2020 is a debit to Income Summary for P

180,000 and credits to A Capital and B Capital, respectively of:

EX-2. F, G, and H are partners with average capital balances during 2020 of P 120,000,

and P 60,000, and P 40,000, respectively. Partners receive 10 percent interest on their

average capital balances. After deducting salaries of P 30,000 to F and P 20,000 to H,

the remaining profit or loss is divided equally. In 2020, the partnership sustained a P

33,000 loss before interest and salaries to partners. By what amount should F's capital

account change?

EX-3. J and P are partners who share profits and losses in the ratio of 6:4 respectively.

J's salary is P 100,000 and P is P 50,000. The partners also are paid interest on their

average capital balances. In 2020, J received P 50,000 of interest and P, P 20,000. The

profit and loss allocation is determined after deductions for the salary and interest

payments. If P's total share of partnership income was P 200,000 in 2020, what was the

total partnership income?

EX-4. P and R share profits after the provision of annual salary allowances of P 14,400

and P 13,200, respectively in the ratio of 3:2. However, if partnership's net income is

insufficient to provide for said allowances in full amount, the net income shall be divided

equally between the partners. In 2020, the following errors were discovered: Depreciation

for 2020 is understated by P 2,100, and the inventory on December 31, 2020 is overstated

by P 11,400. The partnership net income for 2020 was reported to be P 19,500. The

capital accounts of the partners should be increased (decreased) by:

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EX-5. CC, DD, and EE, doctors, agree to form a partnership and to share profits in the

ratio of 5:3:2. They also agreed that EE is to be allowed a salary of P 14,000, and that

DD is to be guaranteed P 10,500 as his share of the profits. During the first year of

operation, income from fees are P 90,000, while expenses total P 48,000. What amount

of net income should be credited to each partners' capital account?

EX-6. LL, MM, and PP are partners with capitals of P 40,000, P 25,000, and P 15,000

respectively. The partnership agreement provides that each partner shall be allowed 5

percent on his capital, and that LL shall be allowed an annual salary of P 8,500 and that

MM shall be entitled to a minimum of P 14,000 per annum including amounts allowed as

interest on capital and as share of profit. Profit after interest and salary allowances is to

be divided between LL, MM, and PP 5:3:2 respectively. What amount must be earned by

the partnership during 2020 before charges for interest or salary if LL is to receive an

aggregate of P 20,000 to include interest, salary, and share of profit?

EX-7. D wants to purchase one-fourth interest in the partnership of A, B, and C. The three

partners agree to sell A one-fourth of their respective capital and profit and loss interests

in exchange for a total payment of P 40,000. The partner's capital accounts and the profit

and loss ratio immediately before the admission of D are as follows:

Capital Accounts Profit and Loss Ratio

A P 80,000 60%

B 40,000 30%

C 20,000 10%

All assets and liabilities are fairly valued and implied goodwill is to be recorded upon the

admission of D. Immediately after D's admission, what should be the capital balances of

A, B, and C respectively?

EX-8. The VALVE partnership shows the following profit and loss ratios and capital

balances:

A 60% P 252,000

B 30% 126,000

C 10% 42,000

The partners decide to sell D 20% of their respective capital and profit and loss interests

for a total payment of P 90,000. D will pay the money directly to the other partners. If the

partners agree that goodwill is not to be recorded, what are the capital balances of the

partners after D's admission to the partnership?

EX-9. A and B are partners who share profits and losses in the ratio of 7:3 respectively.

Their respective capital accounts are as follows:

A P 35,000 B P 30,000

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They agreed to admit C as a partner with a one-third interest in the capital and profits and

losses, upon an investment of P 25,000. The new partnership will begin with a total capital

of P 90,000. Immediately after C's admission, what are the capital balances of A, B, and

C respectively?

EX-10. A, B, and C were partners with capital balances on January 2, 2020 of P 100,000,

P 150,000, and P 200,000, respectively. Their profit and loss ratio is 5:3:2. On July 1,

2020, A retires from the partnership on the date of retirement the partnership net income

is P 140,000 and the partners agreed that inventories are to be revalued at P 70,000 from

its original cost of P 50,000. The partners agreed further to pay A P 195,000 in settlement

of her interest. What are the capital balances of the remaining partners after the retirement

of A?