PROBLEM 4: MULTIPLE CHOICE-COMPUTATIONAL 1. Triangle, Square and Round formed a partnership. Triangle contributed cash of P80,000. Square contributed equipment with historical cost of P700,000, carrying amount of P180,000, and fair value of P90,000. Round contributed building with historical cost of P1,000,000, carrying amount of P480,000 and fair value of P690,000. The partnership will assume the unpaid mortgage of P580,000 on the building. Which partner has the least capital account balance on partnership formation? a. Triangle c. Round b. Square d. None, all are equal 2. On January 1, 20x1, Mr. Ann and Ms. Buoy agreed to form a partnership. The partners' contributions are listed below: Mr. Ann Ms. Buoy Cash 50,000 120,000 Accounts receivable 360,000 1,080,000 Inventories 216,000 360,000 1,080,000 Land Chapter 1 20 Building Equipment Accounts payable Capital 90,000 336,000 1,460,000 900,000 90,000 450,000 2,100,000 a. The partners agreed to the following: The recoverable amounts of the partners' respective accounts receivable are P300,000 for Mr. Ann and P760,000 for Ms. Buoy. b. The inventory contributed by Ms. Buoy includes obsolete items with a recorded cost of P20,000. The land has an attached mortgage of P180,000, which the partnership will assume. d. The equipment contributed by Ms. Buoy has a fair value of P130,000 e. Mr. Ann has an unrecorded accounts payable of P100,000. The partnership assumes the obligation of settling that account C. How much is the initial capital of Ms. Bouy? a. 1,120,000 c. 1,920,000 b. 1,800,000 d. 2,920,000 3. On January 1, 20x1, Mr. Angot and Ms. Banglo agreed to form a partnership and share profits and losses in the ratio of 3:7, respectively. Mr. Angot contributed a parcel of land that cost him P10,000. Ms. Banglo contributed P40,000 cash. The land was sold for P18,000 on January 1, 20x1, immediately after formation of the partnership. How much is the capital balance of Mr. Angot? a. 10,000 c. 29,000 b.18,000 d. 40,000 Use the following information for the next two questions: Mr. A and Ms. B formed a partnership and agreed to divide the initial capital equally even though Mr. A contributed P100,000 and Ms. B contributed P84,000 in identifiable assets. (AICPA) 4. The partners agreed that the difference in the amount of contribution and the amount of credit to the partner's capital shall be treated as compensation for the expertise that the partner will be bringing to the partnership. How much is the initial capital balance of Ms. B? a. 84,000 c. 100,000 b. 92,000 d. 102,000 5. The partners agreed that the difference in the amount of contribution and the amount of credit to the partner's capital shall be treated as cash settlement between the partners. Which of the following is correct? a. A pays B 216,000 b. B pays A P16,000 pays BP8,000 d. The cash settlement between the partners is not recorded in the partnership books. C