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The accountant was not able to adjust the following: P 200 of service revenue was not accrued; P 300 of
unearned revenue had been earned, but no entry was made. What should be the amount of net income if the
incorrect net income was P 19,000?
A. P 19,250 C P 19,500
B. P 19,410 D. P 18,300

2. A trial balance has debit and credit totals of P 7,000. The purchase of P 4,000 of office supplies on account was
omitted from the original journal entries. After recording and posting this transaction, the new debit and credit
totals for the trial balance would be
A. P 11,000 C. P 9,000
B. P 7,000 D. P 3,000

3. From this list of account balances, calculate the total credit column for the post-closing trial balance: Cash, P
15,000; Accounts Receivable, P 3,000; Prepaid Rent, P 2,000; Building, P 30,000; Accumulated Depreciation, P
13,000; Accounts Payable, P 6,000; Unearned Revenue, P 1,000; Diana Park, Capital, P 30,000.
A. P 69,000 C. P 45,000
B. P 50,000 D. P 20,000

4. The Balance Sheet of Mallari Company shows that capital is P 540,000 that is equal to 1/3 of its total assets. How
much are the total liabilities?
A. P 180,000 C. P 1,080,000
B. P 720,000 D. P 1,620,000

5. The assets of Sydney Company amounted to P 810,000 on December 31, 2008, but increased to P 1,305,000 by
December 31, 2009. During the same period, liabilities increased by P 270,000. Owner’s equity on December 31,
2008 amounted to P 495,000. What was the amount of the Owner’s Equity on December 31, 2009?
A. P 585,000 C. P 1,035,000
B. P 720,000 D. P 1,080,000

6. Angelica Company has P 60,000 in revenues, P 132,000 in expenses, P 36,000 in owner investment, P 9,000 in
owner’s withdrawals, and P 45,000 in liabilities paid off. Owner’s equity changes by
A. P 48,000 C P 36,000
B (P 45,000) DP0

7. Marnie Company purchased P 1,450,000 of land with a P 500,000 cash down payment and the balance taken as
a note payable. How much did the total assets change?
A P 1,450,000 C (P 930,000)
B P 950,000 D P 500,000

8. Jason Gubatan joined a partnership by contributing the following: cash, P 20,000; accounts receivable, P 4,000;
land, P 240,000 at cost and P 400,000 at fair value; and accounts payable, P 16,000. What will be the initial
amount recorded in Gubatan’s capital account?
A P 408,000 C P 424,000
B P 248,000 D P 20,000

9. Resnel and Lana are combining their separate businesses to form a partnership. Cash and non-cash assets are to
be contributed for a total capital of P 600,000. The non-cash assets to be contributed and the liabilities to be
assumed are as follows.
Resnel Lana
Book Value Fair Value Book Value Fair Value
Accounts Receivable 40,000 40,000
Merchandise Inventory 60,000 100,000 P 40,000 P 50,000
Equipment 120,000 90,000 80,000 100,000
Accounts Payable 30,000 30,000 20,000 20,000
The partners’ capital accounts are to be equal after all the contributions of assets and the assumption of
liabilities. The amount of cash to be contributed by Resnel is

A P 200,000 C P 100,000
B P 300,000 D P 210,000
10. Using the information in item 39, the total assets of the partnership is
A P 630,000 C P 360,000
B P 650,000 D P 340,000
11. Kimberly and Jessica are partners who share profits equally and losses in a 2:1 ratio. If they have beginning
capital balances of P 120,000 and P 118,000 respectively, made no additional investments nor withdrawals, and
suffered an unprofitable year with a loss of P 48,000, their capital balances will be
Kimberly Jessica
A P 40,000 P 30,000
B 120,000 118,000
C 88,000 102,000
D 152,000 134,000
12. Erika, Charisse Anne, and Katrina share profits and losses in the ratio of 2:3:5 respectively. Their partnership
realized a profit of P 1,800,000 during the year. Erika, with a beginning capital balance of P 1,000,000, withdrew
P 200,000 during the year. Erika’s ending capital balance is
A P 1,000,000 C P 560,000
B P 1,160,000 D P 1,400,000
13. Kenneth’s interest in the partnership is P 110,000. Juan buys Kenneth’s interest for P 120,000. How much is the
capital balance of Juan after the purchase?
A P 140,000 C P 110,000
B P 120,000 D P 130,000
14. JP and KY formed a partnership and have capital balances of P 100,000 and P 200,000 respectively. If they
agreed to admit MC into the partnership, how much will MC have to invest to have a 1/4 interest?
A P 75,000 C P 200,000
B P 50,000 D P 100,000
15. Anne, Christine, and Braga are partners with capital balances of P 80,000, P 120,000, and P 160,000 respectively.
They share profits and losses in the ratio of 30:40:30. Christine decides to withdraw from the partnership.
Christine receives P 160,000 in the settlement of his interest. If the bonus method is used, what is the capital
balance of Christine immediately after the retirement of Christine?
A P 140,000 C P 180,000
B P 160,000 D P 200,000
16. Using the information in item 45, and assuming bonus method is used, what is the total partnership capital
immediately after the retirement if Christine?
A P 280,000 C P 200,000
B P 240,000 D P 320,000
17. A partner retired from a partnership and received an amount which exceeds his capital interest by P 40,000. The
remaining partners have profit and loss ratio of 3:2. Under the bonus method, the excess payment will be
shared by the remaining partners as
A P 48,000 and P 32,000 C P 36,000 and P 24,000
B P 12,000 and P 8,000 D P 24,000 and P 16,000
18. Kenneth, Patrick, and James are partners who share profits and losses in the ratio of 2:3:5. The partners have
decided to liquidate the partnership. Their capital accounts show the following balances: Kenneth, P 60,000
credit; Patrcik, P 90,000 credit; and James, P 30,000 debit after the sale of non-cash assets and the payment of
liabilities. What is the amount of cash available for distribution?
A P 120,000 C P 160,000
B P 180,000 D P 150,000
19. T-Gang Corporation was organized on January 1, 2009 with authorized capital of 100,000 ordinary shares, P 20
par value. During 2009, Hunger Games Corporation had the following transactions affecting the shareholders’
equity: January 10, issued 25,000 shares at P 22 per share; March 25, issued 1,000 shares for legal services when
the fair value was P 24 per share; September 30, issued 5,000 shares for an equipment when the value was P 26
per share. How much is the balance of the Ordinary Share Capital account as of September 30?
A P 700,000 C P 634,000
B P 620,000 D P 704,000

20. Using the information in item 49, what amount should be reported as Premium on Ordinary Shares?
A P 84,000 C P 50,000
B P 54,000 D P 34,000
21. John Paul Corporation has the following classes of share capital outstanding as of December 31, 2015: Ordinary
Share Capital, P 20 par value, 20,000 shares outstanding; 6% Preference Share Capital, P 100 par value,
cumulative, 2,000 shares outstanding. No dividends were paid on preference shares for 2013 and 2014. On
December 31, 2009, a total cash dividend of P 200,000 was declared. How much dividends would be received by
ordinary shareholders?
AP0 C P 176,000
B P 188,000 D P 164,000
22. Using the information in item 51, how much dividends will be received by preference shareholders?
A P 200,000 C P 12,000
B P 24,000 D P 36,000
23. On April 8, 2015, Rafael Corporation declared and issued 25% ordinary share capital dividend. Prior to this date,
Rafael Corporation had 20,000 shares of P 2 par value ordinary share that were both issued and outstanding.
The carrying value of each share of stock is P 20 at the time of declaration of the dividend. As a result of the
stock dividend, how much will be debited to Retained Earnings?
A P 40,000 C P 100,000
B P 10,000 D P 75,000
24. Red Corporation and Yellow Corporation have Preference Share Capital outstanding. Red Corporation has issued
3,000 shares of 5% Preference Share Capital, par value P 100. Yellow Corporation has issued 5,000 shares of 10%
Preference Share Capital, par value P 120. What is the dividend per share for the Preference Share Capital for
the two corporations?
A P 5 for Red, P12 for Yellow C P 5 for Red, P 10 for Yellow
B P 100 for Red, P 120 for Yellow D P 5 for Red, P 120 for Yellow
25. Kuya Kosa Corporation has 400 shares of 6% preference share capital outstanding, par value is P 50 per share
and market value is P 80 per share. The amount of cash dividends for the year on this share capital would be
A P 1,200 C P 2,400
BP 12 D P 1,920
26. Tindahaneta Corporation has 6,000 shares of P 8 non-cumulative preference shares outstanding and 12,000
ordinary shares outstanding. At the end of the year, cash dividends of P 180,000 were declared. How much
dividends were paid on both classes of share capital?
A P 48,000 and P 132,000 C P 90,000 and P 90,000
B P 60,000 and P 120,000 D none of the given
27. Using the information in item 56, what is the dividend per share on both classes of share capital?
A P 10 and P 10 C P 15 and P 2.50
B P 8 and P 11 D none of the given

28. !Philip Vargas Corporation was organized on January 1, 2015 with authorized capital of 100,000 shares of P 10
par value ordinary share capital. During 2015, Philip Vargas Corporation had the following transactions affecting
shareholders’ equity: January 7, issued 40,000 shares at 12 per share; December 2, purchased 6,000 treasury
shares at P 13 per share. Profit for the year amounted to P 300,000. What is the amount of shareholders’ equity
as of December 31, 2015?
A P 702,000 C P 640,000
B P 720,000 D P 708,000
29. A, B and C have capital balances of P80,000, P80,000, and P40,000, respectively. Profits are allocated 40% to A,
40% to B and 20% to C. The partners have decided to dissolve and liquidate the partnership. After paying all
creditors the amount available to distribution is P20,000. A and B are personally solvent. C is personally
insolvent. Under the circumtances, A and B will each
A receive P10,000 C receive P8,000
B receive P 9,000 D receive P6,000
30. !Kris and Mark are partners who share profits and losses 70:30. They have capital account balances of P170,000
and P260,000, respectively at the date they admit Frank into the partneship. Frank invest P120,000 in the
partnership for a 25 percent equity interest and the bonus method is applied. What is the peso amount of bonus
recognized in Frank's capital account at the date of admission?
A P70,000 C P23,333
B P52,500 D P17,500