PARTNERSHIP FORMATION
Theories
1. Which of the following statements concerning the formation of
partnership business is correct?
a. Philippine Financial Reporting Standards (PFRS) allows
recognition of goodwill arising from the formation of
partnership
b. The juridical personality of the partnership arises from the
issuance of certification of registration
c. The parties may become partners only upon contribution of
money or property but not of industry or service
d. The capital to be credited to each partner upon formation
may not be the amount actually contributed by each
partner
2. Under the generally accepted accounting principles in the
Philippines, what is the acceptable reason when the amount
credited to a partner is greater than the amount actually
contributed by such partner during partnership formation?
a. Recognition of goodwill by virtue of special skills or
reputation of said partner
b. Receipt or transfer of capital from other partner by virtue of
partner’s agreement resulting to bonus to the said partner
c. Recognition of impairment loss on the property contributed
by said partner
d. When there is bonus given by said partner to the other
partners
3. Refers to a partner who contributed not only money and property
but also industry to the newly formed partnership.
a. Industrial partner
b. Nominal partner
c. Capitalist-industrial partner
d. Capitalist partner
4. It refers to a type of partnership wherein all partners are liable to
the creditors pro-rata up to the extent of personal or separate
assets after the partnership’s assets are exhausted
a. General partnership
b. Partnership by estoppel
c. Limited partnership
d. Particular partnership
Problem Solving
1. A, B, and C decided to from ABC Partnership. it was agreed that A
will contribute an equipment with assessed value of P100,000
with historical cost of P800,000 and accumulated depreciation of
P600,000. A day after the partnership formation, the equipment
was sold for P300,000.
B will contribute a land and building with carrying amount of
P1,200,000 and fair value of P1,500,000. The land and building are
subject to a mortgage payable amounting to P300,000 to be
assumed by the partnership. the partners agreed that B will have
a 60% capital interest in the partnership. the partners also agreed
that C will contribute sufficient cash to the partnership.
1. What is the total agreed capitalization of the ABC Partnership?
a. 1,500,000
b. 2,000,000
c. 2,500,000
d. 3,000,000
2. What is the cash to be contributed by C in the ABC Partnership?
a. 500,000
b. 600,000
c. 700,000
d. 800,000
2. Charlie and Delta formed a partnership. Charlie invested cash
worth P85,000 and a machine. On the other hand, Delta
contributed cash worth P55,000 and an equipment which has a
mortgage of P35,000 which Delta will pay personally. The total
capital after formation was P360,000. They also further agreed to
reflect 55:45 ratio as to their capital balances respectively. No
other investment or withdrawal occurred other than mentioned
to reflect their capital ratio agreement.
1. How much is the fair value of the machine?
a. 113,000
b. 105,000
c. 107,000
d. 115,000
2. How much is the fair value of the equipment?
a. 115,000
b. 107,000
c. 150,000
d. 142,000
3. On January 1, 202X, Regina, Jessica, and Nataly formed a
partnership with a profit or loss sharing of 2:3:5.
Regina contributed a land with assessed value from city assessor
in the amount of P1,000,000. The land is subject to a real estate
mortgage which is annotated to the title of the land in the amount
of P800,000 and will be assumed by the partnership. the appraise
value of the land is P2,400,000. Jessica contributed a building with
a cost of P2,000,000 and accumulated depreciation of
P1,500,000. The fair value of the building is P800,000. Nataly
contributed investment in trading securities with historical cost of
P6,000,000. The trading securities have quoted price in active
market of P3,000,000.
The partners decided to bring their capital balances in accordance
with their profit or loss sharing agreement. The total agreed
capitalization of the new partnership is P10,000,000
Which of the following statements is correct?
a. The agreed capital of Nataly is P500,000
b. Regina should contribute additional capital in the amount of
P1,800,000
c. Jessica should contribute additional capital in the amount of
P2,200,000
d. Nataly is entitled to withdraw in the amount of P1,000,000
4. On January 1, 202X. Len, May, and Nancy decided to from a
business partnership to operate supermarket. Len and May both
owned a grocery business with the Statements of Financial
Position as of December 31 201X
LEN
MAY
Cash
P10M
P20M
Accounts Receivable
20M
30M
Inventories
70M
40M
Property, Plant and Equipment
50M
10M
Accounts Payable
40M
200M
Notes Payable
30M (10%)
50M (5%)
Capital
80M
30M
The following additional notes are provided:
a. Len and May will contribute all its assets and liabilities to the
newly formed partnership
b. The parties agree to provide 10% and 20% allowance for bad
debts to the accounts receivable of Lend and May, respectively
c. The inventories of Len and May are reported at historical cost
and have net realizable value of P60M and P45M, respectively
d. The PPE of Len and May have not been depreciated and should
be depreciated b 40% and 30%, respectively
e. The interest payable on both notes payable were unrecorded
and unpaid since the date of contract. Len’s note payable is
dated April 1 2019 while May’s note payable is date June 30
2019
f. Nancy shall have 20% interest in the partnership upon
contribution of sufficient cash
What is the amount of cash to be contributed by Nancy on January
1 2020?
a. 16,375,000
b. 17,625,000
c. 15,825,000
d. 18,475,000
PARTNERSHIP OPERATION
Theories
1. Which of the following transactions shall not affect the capital
balance of a partner?
a. Share of a partner in the partnership’s net loss
b. Receipt of bonus by a partner from another partner based
on the agreement
c. Advances made by the partnership to a partner
d. Additional investment by a partner to the partnership
2. In the absence of agreement as to distribution of profit, how shall
the partnership profit be distributed to the partners?
a. The industrial partner shall receive a share equivalent to the
least share of a capital partner while the capitalist partner
shall receive a share based on capital contribution ratio
b. The industrial partner shall receive a just and equitable
share and the remainder shall be distributed to the
capitalist partners on the basis of capital contribution ratio
c. The profit shall be distributed on the basis of loss
contribution ratio which may have been agreed upon by the
partners
d. The profit shall be distributed equally to all partners
including the industrial partner
3. In the absence of agreement as to distribution of loss, how shall
the partnership loss be distributed to the partners?
a. The loss shall be distributed equally to all partners including
the industrial partner
b. The industrial partner shall be exempted from partnership
loss while the capitalist partner shall share equally
c. The industrial partner shall be exempted from partnership
loss while the capitalist partners shall be distributed on the
basis of capital contribution ratio
d. The industrial partner shall be exempted from partnership
loss because it shall be distributed to the capitalist partners
only in accordance with profit agreement ratio
4. Which of the following will decrease the capital balance of a
partner?
a. Share in partnership profit
b. Receipt of share in revaluation surplus from a partnership
property, plant and equipment
c. Drawing made by a partner
d. Advances made by a partner to the partnership
Problem Solving
1. On January 1 2018, A, B and C formed ABC Partnership with total
agreed capitalization of P1,000,000. The capital interest ratio of
the ABC Partnership is 5:1:4 while the profit or loss ratio is 3:2:5,
respectively for A, B, and C.
During 2018, A and B made additional investment of P200,000
and P500,000, respectively. At the end of 2018, B and C made
drawings of P300,000 and P100,000 respectively. On December
31 2018, the capital balance of B is reported at P200,000
1. What is the net income or net loss of ABC Partnership for the
year ended December 31 2018?
a. 500,000 loss
b. 1,000,000 loss
c. 800,000 income
d. 1,200,000 income
2. What is the capita balance of C on December 31 2018?
a. 150,000
b. 50,000
c. 200,000
d. 250,000
2. On January 1 2018, A, B, and C formed ABC Partnership with
original capital contribution of P300,000, P500,000, and
P200,000. A is appointed as managing partner.
During 2018, A, B, and C made additional investments of
P500,000, P200,000, and P300,000, respectively. At the end of
018, A, B, and C made drawings of P200,000, P100,000, and
P400,000, respectively. At the end of 2018, the capital balance of
C is reported at P320,000.
The profit or loss agreement of the partners is as follows:
 10% interest on original capital contribution of the partners
 Quarterly salary of P40,000 and P10,000 for A and B,
respectively
 Bonus to A equivalent to 20% of Net Income after interest
and salary to all partners
 Remainder is to be distributed equally among the partners
1. What is the partnership profit for the year ended December 31
2018?
a. 900,000
b. 1,020,000
c. 1,050,000
d. 960,000
2. What is A’s share in partnership profit for 2018?
a. 190,000
b. 340,000
c. 540,000
d. 200,000
3. What is B’s share in partnership profit for 2018?
a. 200,000
b. 290,000
c. 50,000
d. 90,000
3. On January 1 2020, K and S formed KS Partnership and the articles
of co-partnership provides that profit or loss shall be distributed
accordingly:
 10% interest on average capital balance
 P50,000 and P100,000 quarterly salary for K and S,
respectively
 The remainder shall be distributed in the ratio of 3:2 for K
and S, respectively
The following transactions regarding the capital balance of the
partners for year 2020 are provided:
K, Capital
S, Capital
January 1 2020 investment
P1,000,000
P500,000
March 31 2020 investment
100,000
July 1 2020 withdrawal
(200,000)
September 30 2020 withdrawal
(200,000)
October 1 2020 investment
700,000
The chief account of the partnership reported net income of
P1,000,000 for year 2020
What is the capital balance of K on December 31 2020?
a. 1,951,500
b. 1,451,500
c. 2,151,500
d. 1,251,500
4. On July 1 2020, D and J formed DJ Partnership with initial
investment of P1M and P2M, respectively. D is appointed as the
managing partner.
The articles of co-partnership provide that profit or loss shall be
distributed accordingly:
 30% interest on original capital contribution ratio
 Monthly salary of P20,000 and P10,000, respectively
 D shall be entitled to bonus equivalent to 20% of net income
after interest, salary, and bonus
 The remainder shall be distributed in ratio of 3:2 for D and
J, respectively
For the year ended December 31 2020, the partnership reported
net income of P750,000
1. What is the share in net income of D for the year ended
December 31 2020?
a. 400,000
b. 250,000
c. 350,000
d. 500,000
2. Using the same data, what is the share in net income of J
assuming the bonus is equivalent to 0% of net income after
interest and salary but before bonus for the year ended December
31 2020?
a. 351,600
b. 398,400
c. 350,000
d. 500,000
5. Partners Samson and Delilah have profit and loss agreement with
the following provisions: salaries of P90,000 and P135,000 for
Samson and Delilah, respectively: a bonus to Samson of 10% of
net income after salaries; and interest of 10% on average capital
balances of P60,000 and P105,000 for Samson and Delilah,
respectively. One third of remaining profits will be allocated to
Samson and the balance to Delilah.
If the partnership had net income of P60,000, how much should
be allocated to Samson, assuming that the provisions of the profit
and loss agreement are ranked by order of priority starting with
1) salaries, 2) interest, 3) bonus and up to the extent of the
rankings only?
a. 39,600
b. 37,500
c. 36,000
d. 26,400
PARTNERSHIP DISSOLUTION
Theories
1. Which of the following statements pertains to partnership
dissolution?
a. It refers to the process of converting non-cash assets of the
partnership and distributing the total cash to the creditors
and the reminder to the partners
b. It refers to the change in the relation of the partners caused
by any partner ceasing to be associated in the carrying of
the partnership
c. It refers to the extinguishment of the juridical personality of
the partnership
d. It refers to the end of the life of the partnership
2. Which of the following will not result to the dissolution of a
partnership?
a. Insolvency of the partnership
b. Admission of a new partner in an existing partnership
c. Assignment of an existing partner’s interest to a third
person
d. Retirement of a partner
3. Which of the following statements is correct when a new partner
is admitted to an existing partnership by purchasing a portion of
a capital interest of an existing partnership?
a. It will result to revaluation or impairment of existing assets
of the partnership
b. The partnership will recognize gain or loss in the transfer of
capital from one partner to another partner
c. The partnership is not dissolved by the admission of a new
partner by purchase
d. It will just result to credit to capital of newly admitted
partner with corresponding debit to capital of the selling
partner
4. In case of admission of a new partner in an existing partnership
through investment to the partnership, which of the following
scenario will result to bonus to new partner and asset
revaluation?
a. The total contributed capital of all partners is equal to the
total agreed capital of new partnership while the agreed
capital of new partner is higher than the amount he has
contributed
b. The total contributed capital of all partners is more than the
total agreed capital of new partnership while the agreed
capital of new partner is lower than the amount he has
contributed
c. The total contributed capital of all partners is less than the
total agreed capital of new partnership while the agreed
capital of new partner is higher than the amount he has
contributed
d. The total contributed capital of all partners is more than the
total agreed capital of new partnership while the agreed
capital of new partner is equal to the amount they
contributed
5. If a partner who retired from the partnership receives less than
the capital balance from retirement which also resulted to
decrease in the capital balance of remaining partners, which is
correct?
a. The retiring partner receives bonus from retiring partner
b. An impairment loss is recognized before the retirement
c. Revaluation surplus is recognized before the retirement
d. The retiring partner gives bonus to the remaining partner
Problem Solving
1. On December 31 2018, the Statement of Financial Position of ABC
Partnership provided the following data with profit or loss ratio of
1:6:3
Current Assets
Noncurrent Assets
1,000,000
2,000,000
Total Liabilities
A, Capital
B, Capital
C, Capital
600,000
900,000
800,000
700,000
On January 1 2019, D is admitted to the partnership by purchasing
40% of the capital interest of B at a price of P500,000
What is the capital balance of B after the admission of D on
January 1 2019?
a. 540,000
b. 480,000
c. 420,000
d. 300,000
2. On December 31 2018, the Statement of Financial Position of ABC
Partnership provided the following data with profit or loss ratio of
1:6:3
Current Assets
Noncurrent Assets
1,300,000
2,000,000
Total Liabilities
A, Capital
B, Capital
C, Capital
1,300,000
1,400,000
700,000
900,000
On January 1 2019, D is admitted to the partnership by investing
P1,000,000 to the partnership for 20% capital interest
If all the assets of the existing partnership are properly valued,
what is the capital balance of C after the admission of D?
a. 960,000
b. 900,000
c. 840,000
d. 1,200,000
3. the Statement of Financial Position of ABC Partnership provided
the following data with profit or loss ratio of 5:1:4
Current Assets
Noncurrent Assets
1,500,000
2,000,000
Total Liabilities
A, Capital
B, Capital
C, Capital
500,000
1,100,000
1,200,000
700,000
On January 1 2019, D is admitted to the partnership by investing
P500,000 to the partnership for 10% capital interest. The total
agreed capitalization of the new partnership is P3,000,000
1. What is the capital balance of D after his admission to the
partnership?
a. 500,000
b. 300,000
c. 350,000
d. 400,000
2. What is the capital balance of C after the admission of D to
the partnership?
a. 580,000
b. 820,000
c. 500,000
d. 780,000
4. On December 31 2018, ABC Partnership’s Statement of Financial
Position shows that A, B, and C have capital balances of P500,000,
P300,000, and P200,000 with profit or loss ratio of 1:3:6. On
January 1 2019, C retired from the partnership and received
P350,000. At the time of C’s retirement, an asset of the
partnership is undervalued
What is the capital balance of A after the retirement of C?
a. 462,500
b. 537,500
c. 562,500
d. 525,000
5. On December 31 2018, ABC Partnership’s Statement of Financial
Position shows that A, B, and C have capital balances of P400,000,
P300,000, and P100,000 with profit or loss ratio of 1:4:5. On
January 1 2019, C retired from the partnership and received
P80,000. At the time of C’s retirement, the assets and liabilities of
the partnership are properly valued
What is the capital balance of B after the retirement of C?
a. 284,000
b. 308,000
c. 316,000
d. 320,000
6. On December 31 2020, the unadjusted Statement of Financial
Position of UFC Partnership shows the following data with profit
or loss sharing agreement of 2:3:5
Total Assets
P100,000,000
Total Liabilities
U, Capital
F, Capital
C, Capital
P40,000,000
10,000,000
20,000,000
30,000,000
On December 31 2020, U decided to retire from the partnership.
however, before the distribution of cash to U, the following data
errors were discovered during the pre-retirement audit:
 During 2020, the property, plant and equipment has not
been subject to revaluation surplus by P15,000,000
 The 2020 net income is overstated by P5,000,000
After the adjustment, U received retirement pay of P15,000,000
for his capital interest
What is the capital balance of F after the retirement of U?
a. 23,000,000
b. 21,000,000
c. 18,875,000
d. 21,875,000
7. S, A, and T are partners with capital balances of P784,000,
P2,730,000, and P1,190,000 respectively, sharing profits and
losses in the ratio of 3:2:1. D is admitted as a new partner bringing
with him expertise and is to invest cash for a 25% interest in the
partnership which includes a credit of P735,000 for bonus upon
his admission
How much cash should D contribute?
a. 1,323,000
b. 2,100,000
c. 1,575,000
d. 588,000
8. E and M are partners with capital balances of P30,000 and
P70,000, respectively. E has a 30% interest in profits and losses.
At this time, the partnership has decided to admit R and L as new
partners. R contributes cash of P55,000 for a 20% interest in
capital and a 30% interest in profits and losses. L contributes cash
of P10,000 and an equipment for a 25% interest in capital and 35%
interest in profits and losses
If bonus amounting to P18,250nis given to the old partners, what
is the value of the equipment contributed by L?
a. 31,750
b. 43,750
c. 50,000
d. 50,138
9. Juliet and Kilo have capital balances of P200,000 and P220,000,
respectively before admission of Lima. Their profit and loss
agreement was 35:65. Lima was to be admitted for a 40% interest
in the partnership and 20% in the profits and losses by
contributing a used machine which had a cost of P205,000 and an
appraised value of P180,000. After admission of Lima, Juliet and
Kilo agreed to share their profits and losses equally. At the end of
the year the new partnership generated net income of P130,000
1. How much is the capital balance of Kilo after the admission of
Lima?
a. 174,500
b. 259,000
c. 181,000
d. 240,000
2. How much is the capital balance of Juliet at the end of the
year?
a. 231,000
b. 221,000
c. 224,500
d. 247,000
3. Assuming there is an implied undervaluation or overvaluation
of an asset, how much is the undervaluation or overvaluation
of the asset?
a. 300,000
b. (150,000)
c. (300,000)
d. 150,000
4. Assuming there is an implied undervaluation or overvaluation
of an asset, how much is the capital balance of Kilo at the end
of the year?
a. 467,000
b. 77,000
c. 369,500
d. 174,500
PARTNERSHIP LIQUIDATION
Theories
1. It refers to the process of converting the non-cash assets of the
partnership and distributing the total cash to the creditors and the
remainder to the partners
a. Dissolution
b. Termination
c. Liquidation
d. Operation
2. In the liquidation of general partnership, which of the following
credits hall be paid first?
a. Those owing to third persons
b. Those owing to partners other than capital and profits
c. Those owing to partners for their capital contribution
d. Those owing to partners for their share in profits
3. In the liquidation of limited partnership, which of the following
credits hall be paid first?
a. Those owing to third persons
b. Those owing to limited partners
c. Those owing to general partners for their share in profits
d. Those owing to general partners for their capital
contribution
4. What is the nature of liability of general partners as to partnership
debts or obligations?
a. They are liable equally up to the extent of their separate
assets after the partnership assets are exhausted
b. They are liable pro-rata up to the extent of their separate
assets after the partnership assets are exhausted
c. They are liable pro-rata up to the extent of their capital
contribution only
d. They are liable solidarily up to the extent of their separate
assets after the partnership assets are exhausted
5. What is the nature of liability of limited partners as to partnership
debts or obligations?
a. They are liable equally up to the extent of their separate
assets after the partnership assets are exhausted
b. They are liable pro-rata up to the extent of their separate
assets after the partnership assets are exhausted
c. They are liable pro-rata up to the extent of their capital
contribution only
d. They are liable equally up to the extent of their capital
contribution only
Problem Solving
1. On December 31 2018, the Statement of Financial Position of ABC
Partnership with profit or loss ratio of 6:1:3 of partners A, B, and
C respectively, revealed the following data:
Cash
Receivable from A
Other NCA
1,000,000
500,000
2,000,000
Other Liabilities
Payable to B
Payable to C
A, Capital
B, Capital
C, Capital
2,000,000
1,000,000
100,000
700,000
(650,000)
350,000
On January 1 2019, the partners decided to liquidate the
partnership. all partners are legally declared to be personally
insolvent. The other non-cash assets were sold for P1,500,000.
Liquidation expenses amounting to P100,000 were incurred
1. How much cash was received by B at the end of partnership
liquidation?
a. 250,000
b. 150,000
c. 290,000
d. 270,000
2. How much cash was received by C at the end of partnership
liquidation?
a. 270,000
b. 150,000
c. 350,000
d. 220,000
2. D, E, and F are partners in DEF Partnership with profit or loss ratio
of 6:1:3. Due to disagreement, the partners decided to liquidate
their business with the pre liquidation statement of financial
position presented below:
Cash
Noncash Assets
P3M
P7M
Liabilities
D, Capital
E, Capital
F, Capital
P10M
1M
4M
5M
The following additional notes are provided:
 All partners are legally declared to be personally insolvent
 Al noncash assets are sold during the liquidation process
 Liquidation expenses amounting to P2M were paid
 E receives a total of P2,500,000 at the end of liquidation
1. What is the amount received by F at the end of liquidation?
a. 500,000
b. 2,500,000
c. 0
d. 3,500,000
2. Using the same data, what is the net proceeds from the sale of
all noncash assets?
a. 14,000,000
b. 10,000,000
c. 12,000,000
d. 8,000,000
3. On December 31 2018, the Statement of Financial Position of ABC
Partnership with profit or loss ratio of 5:3:2 of partners A, B, and
C respectively, showed the following information:
Cash
Noncash Assets
P1,600,000
1,400,000
Total Liabilities
D, Capital
E, Capital
F, Capital
P2,000,000
100,000
500,000
400,000
On January 1 2019, the partners decided to liquidate the
partnership in installment. All partners are legally declared to be
personally insolvent
As of January 31 2019, the following transactions occurred:
 Noncash assets with a carrying amount P1,000,000 were
sold at a gain of P100,000
 Liquidation expenses for the month of January amounting
to P50,000 were paid
 It is estimated that liquidation expenses amounting to
P150,000 will be incurred for the month of February 2019
 20% of the liabilities to third persons were settled
 Available cash was distributed to the partners
As of February 28 1019, the following transaction occurred:
 Remaining noncash assets were sold at a loss of P100,000
 The final liquidation expenses for the month of February
amounted to P100,000
 The remaining liabilities to third persons were settled
 Remaining cash was fully distributed to the partners
1. What is the amount of cash received by C on January 31 2019?
a. 260,000
b. 240,000
c. 300,000
d. 350,000
2. What is the share of B in the maximum possible loss on January
31 2019?
a. 275,000
b. 110,000
c. 120,000
d. 165,000
3. What is the amount of total cash withheld on January 31 2019?
a. 550,000
b. 1,600,000
c. 1,750,000
d. 1,700,000
4. What is the amount of cash received by B on February 28 2019?
a. 0
b. 25,000
c. 195,000
d. 130,000
4. On December 31 2020, the Statement of Financial Position of UFC
Partnership shows the following data with profit or loss sharing
2:3:5:
Cash
Other Noncash Assets
P15M
40M
Liabilities to Others
D, Capital
E, Capital
F, Capital
P20M
15M
12.5M
7.5M
On January 1 2021, the partners decided to wind up the
partnership affairs. During the winding up liquidation expenses
amounted to P2,000,000 were paid. Noncash assets with book
value of P30,000,000 were sold during January. 40% of total
liabilities were also paid during January. P3,000,000 cash was
withheld during January for future liquidation expenses. On
January 31 2021, partner U received P10,000,000
1. What is the amount received by F on January 31 2021?
a. 2,500,000
b. 7,500,000
c. 5,000,000
d. 3,000,000
2. Using the same data, what is the net proceeds from the sale of
noncash assets during January 2021?
a. 25,000,000
b. 20,000,000
c. 22,000,000
d. 23,000,000
5. On January 1 2020, ACJ Partnership entered into liquidation. The
partners’ capital balances on this date were as follows: A (25%)
P2,500,000; C (35%) P5,400,000; J (40%) P3,700,000. The
partnership has liabilities amounting to P4,400,000, including a
loan from C P600,000. Cash on hand before the start of liquidation
is P800,000
With the information given, answer the following independent
situations:
1. Noncash assets amounting to P7,400,000 were sold at book
value and the rest of the noncash assets were sold at a loss of
P4,200,000. How much cash will be distributed to the
partners?
a. 8,000,000
b. 4,400,000
c. 7,400,000
d. 11,800,000
2. After exhausting the noncash assets of the partnership
assuming all partners has personal assets more than their
personal liabilities. How much cash must be invested by the
partners to satisfy the claims of the outside creditors and to
pay the amount due to the partners?
a. 3,680,000
b. 4,480,000
c. 4,360,000
d. 3,800,000
3. If C received P2,255,000, how much was the loss from the
realization of the noncash assets?
a. 5,255,000
b. 10,700,000
c. 10,525,000
d. 9,945,000
CORPORATION
Theories
1. It refers to the extinguishment of the juridical personality of a
corporation for causes expressly provided by law
a. Corporate liquidation
b. Corporate dissolution
c. Corporate rehabilitation
d. Corporate termination
2. It refers to the process of winding up the affairs of the corporation
by settling it corporate debts and distributing the remainder to
the stockholders
a. Corporate liquidation
b. Corporate dissolution
c. Corporate rehabilitation
d. Corporate termination
3. After the date of corporate dissolution, what is the maximum
period allowed by law to a dissolved corporation to complete its
liquidation process?
a. 1 year
b. 2 years
c. 3 years
d. 4 years
4. What is the term used when the total stockholders’ equity has a
debit balance?
a. Deficit
b. Deficiency
c. Delinquency
d. Default
5. Which of the following unsecured debts with priority shall be paid
first during corporate liquidation?
a. Corporate liabilities to employees
b. Obligations arising from corporate crime
c. Corporate liabilities arising from taxes to government
d. Obligations arising from corporate tort or quasi-delict
6. Which of the following creditors can always fully recover its claim
from a dissolved corporation during corporate liquidation?
a. Fully secured creditors
b. Partially secured creditors
c. Unsecured creditors with priority
d. Unsecured creditors without priority
7. Which of the following items is not being considered in the
computation of recovery percentage of unsecured creditors
without priority?
a. Assets reserved for fully secured credits
b. Assets reserved for partially secured credits
c. Unsecured portion of partially secured liabilities
d. Assets not used as collateral for any liability