Professional Documents
Culture Documents
DEFINITION
A CONTRACT WHEREBY TWO OR MORE PERSONS CONTRIBUTE MONEY OR INDUSTRY TO A COMMON
FUND WITH THE INTENTION OF DIVIDING THE PROFITS AMONG THEMSELVES. (Art. 1767 Civil Code of the
Philippines)
-AN ASSOCIATION OF TWO OR MORE PERSONS WHO CO-OWN A BUSINESS FOR A PROFIT.
CHARACTERISTICS
1.
2.
Mutual agency
3.
Limited life
4.
Unlimited liability
5.
Co-ownership of property
6.
Co-ownership of profits
ADVANTAGES
ease of formation and dissolution
unlimited liability
better management
flexibility in decision making
greater capital compared to sole proprietorship
DISADVANTAGES
easily dissolved/limited life
unlimited liability
difficulty in transferring ownership
conflict among partners
lesser capital compared to corporation
ARTICLES OF CO-PARTNERSHIP
-this agreement is a framework which governs the formation, operations, dissolution and liquidation of the partnership.
CONTENTS:
1.
2.
Date on which the partnership contract takes effect and duration of such contract.
3.
4.
5.
6.
7.
KINDS OF PARTNERSHIP
Non-Trading Partnership
Trading Partnership
General Partnership
Limited Partnership
Universal Partnership of All Present Property
Universal Partnership of All Profits
Particular Partnership
KINDS OF PARTNERS
Capitalist Partner
Industrial Partner
Capitalist- Industrial Partner
General Partner
Limited Partner
Nominal Partner
Secret Partner
Silent Partner
P100,000
Adjustment:
Merchandise Inventory is to be recorded at its fair value of P75,000.
Adjusting Entry:
John, Capital
25,000
Merchandise Inventory
25,000
To revalue merchandise inventory.
2. Accounts Receivable per Johns book
P100,000
Allowance for Bad Debts
15,000
Adjustment:
10% of the Accounts Receivable is estimated to be uncollectible
Adjusting Entry:
Allowance for Bad Debts
5,000
John, Capital
To adjust bad debts allowance
5,000
EXERCISE 1-5
Books of Francis
1. Adjusting Entries
Oct 1
Francis, Capital
2,800
Allowance for Bad Debts
2,800
Landscaping Supplies
10,000
Francis, Capital
To revalue landscaping supplies
1
Francis Capital
10,000
100,000
100,000
10,800
200,000
565,000
1,634,200
130,000
720,000
550,000
1,000,000
BOOK OF PARTNERSHIP
Oct 1
Cash
Accounts Receivable
Landscaping Supplies
Furniture and Equipment
Allowance for Bad Debts
Accounts Payable
Francis, Capital
To record the investment of Francis
1
Cash
Pio, Capital
To record the investment of Pio
130,000
720,000
550,000
800,000
10,800
565,000
1,634,200
1,634,200
1,634,200