MC 5-1 When Delfin retired from the partnership of Delfin, Delan and Desta, the final

interest exceeded Delfin’s capital balance. Under the bonus method, the excess
a. had no effect on the capital balances of Delan and Desta
b. was recorded as asset revaluation
c. reduces the capital balances of Delan and Desta
d. was as expense
MC 5-2 The accounting treatment for the sale of the interest of a retiring partner to an
outsider or to the remaining partners in the same as
a. admission of a partner by purchase
b. admission of a partner by investment
c. sale of interest to the partnership
d. both A and B
MC 5-3 When the partnership purchases a retiring partner’s interest, the settlement to the
retiring partner includes the following except
a. cash c. depreciation expense
b. equipment d. notes payable
MC 5-4 The following should be considered in determining the interest of a
retiring except
a. payable to a co-partner c. share in asset adjustment
b. receivable from the partnership d. share in profits
MC 5-5 When a partnership purchases the interest of a retiring partner at less than book
value, there must be a
a. bonus to remaining partners
b. bonus to retiring partner
c. bonus to remaining partners/negative asset revaluation or both
d. bonus to retiring partner/positive asset revaluation or both
MC 5-6 Dayrit, a partner in an accounting firm decided to withdraw from the partnership.
Dayrit’s share of the partnership profits and losses was 30%. Upon withdrawing
from the partnership, he was paid P71,000 in final settlement of his interest. The
total of the partners’ capital accounts, before asset revaluation, prior to Dayrit’s
withdrawal wa P210,000. After his withdrawal, the remaining partners’ capital
accounts, excluding their share of the asset revaluation, totaled P160,000. The
total amount of the asset revaluation recognized was
a. P21,000 c. P70,000
b. P24,000 d. P80,000
MC 5-7 The partnership of Doctor, Dino and Dolor has reached an impasse as Dolor is no
longer willing to contribute the amount of time and effort to the partnership that
he has previously given. The partners share profits and losses in the ratio of 3:3:4,
respectively. The partners have the following capital balances just prior to Dolor’s
withdrawal from the partnership.
Doctor P45,000
Dino
 35,000 Dolor
25,000
If Dino purchases Dolor’s interest from Dolor from P32,000 and no asset
revaluation is recorded, the balance of Dino capital account immediately after the
withdrawal of Dolor is
a. P55,000 c. P61,000
b. P60,000 d. P67,000
MC 5-8 Using the information in MC 5-7 and assuming that the partners agree that the
partnership will purchase Dolor’s interest for P33,000 and no asset revaluation is
to be recorded, the balance of Doctor’s capital account immediately after the
withdrawal of Dolor is
a. P37,000 c. P39,600
b. P39,000. D. P41,000
MC 5-9 Using the information in MC 5-7 and assuming the partners agree that the
partnership will purchase Dolor’s interest for P25,000 and will record no bonus
nor asset revaluation, the balance of Dino’s capital account immediately after the
withdrawal of Dolor is
a. P35,000 c. P41,000
b. P39,000 d. P43,000
MC 5-10 Using the information in MC 5-7 and assuming the partners agree that the
partnership will purchase Dolor’s interest for P33,000 and will revalue the
partnership based on the price Dolor is willing to accept for his interest in the
partnership, the balance of Dino’s capital account immediately after the
withdrawal of Dolor is
a. P39,000 c. P41,000
b. P40,000 d. P43,000
MC 5-11 The partnership of Digna, Dimla and Distor have capital account balance of:
Digna, P70,000; Dimla, P100,000; Distor, P80,000. Their profit and loss ratios are
30%, 50% and 20% respectively. With the consent and knowledge of the Digna
and Dimla, Distor sold his interest to Diesta. Distor was paid P92,000 in cash. The
new capital balances would be
Digna Dimla Diesta
a. P70,000 P100,000 P92,000
b. 73,800 106,000 82,400
c. 70,000 100,000 80,000
d. 70,000 100,000 172,000
MC 5-12 The statement of financial position as of June 30, 2014 for the partnership of
Dizon, Dionisio and Divino shows the following information:
Total Assets P720,000
Dizon, Loan P 40,000
Dizon, Capital 166,000
Dionisio, Capital 154,000
Divino, Capital 360,000
 Total Liabilities and Capital
P720,000
It was agreed among the partners that Dizon retires from partnership and was
further agreed that the assets be adjusted to their fair value of P816,000 as of June
30, 2014. The partnership would pay Dizon P242,000 cash for Dizon’s
partnership interest and includes the payment of loan to Dizon.
Dizon, Dionisio, and Divino share profits and losses 25%, 25% and 50%
respectively. What is Divino’s capital balance after the retirement of Dizon
a. P240,000 c. P408,000
b. P400,000 d. P720,000
MC 5-13 Bianca, Mariel and Toni are partners with capital balances of P100,000, P140,000
and P180,000, respectively. They share profits and losses in the ratio of 20:40:40.
Toni decides to withdraw from the partnership receiving P220,000 including a
loan to the partnership in the amount od P10,000. Assuming the use of the asset
revaluation method, how mush is the amount of asset revaluation increase
(decrease)?
a. P30,000 c. (P30,000)
b. P75,000 d. (P75,000)
MC 5-14 Piolo, Lloyd and Sam are partners with capital balances of P40,000, P50,000 and
P60,000, respectively. They share profits and losses in the ratio 40:40:20%,
respectively. After on year, the operation resulted in a net profit of P20,000.
Withdrawals made during the year are as follows: P10,000, P5,000 and P15,000,
respectively. Sam retired from the partnership and was paid P80,000 for his
interest. Assuming no asset revaluation was recorded, the excess payment is a
a. bonus of P27,000 from the remaining partners
b. bonus of P27,000 to the retiring partner
c. bonus of P31,000 to the remaining partners
d. bonus of P31,000 to the retiring partner
MC 5-15 Using the information in MC 5-14 and assuming assets were revalued upon
retirement of Sam, the share of Piolo and Lloyd in the asset revaluation is
a. P54,000 and P27,000 c. P62,000 and P31,000
b. P54,000 and P54,000 d. P62,000 and P62,000