TOPIC 2 - Partnership Operations

Partnership Accounting Iksimplified
Accounting for Partnership & Corporation Video Lecture Series LECTURE 03

PARTNERSHIP OPERATIONS
After partnership
formation, what
happens next?
So, where lies

the difference?
Partner 1
Profit
or Loss
(or more
Partner 2
partners)
OPTIONS IN PROFIT OR LOSS DISTRIBUTION

PARTNERS’ WITHDRAWALS
Permanent Withdrawals
➢ Reduction on the capital account of the partner
Temporary Withdrawals
➢ Used for transactions personal in nature
➢ Applied against the Drawing* account of the partner
*The Drawing account may be used as a pass through account
for the distribution of partners’ share in profit or loss.
LOAN ACCOUNTS
LOANS TO OR FROM THE PARTNERS
➢ Are asset and liability accounts set up for amounts
intended as loans, instead of these being treated as
additional capital investments or reduction to capital
investments.
➢ In liquidation proceedings, these are treated as an
increase or decrease in a partner’s capital account
(Partnership Liquidation topic).
PROFIT OR LOSS DISTRIBUTION
2
Based on Based on
Partnership Capital
Agreement Contribution
(Stipulation)
2
Based on If Based
there ison
an agreement
Partnership onCapital
the division of profit
Agreement but silent on the
Contribution
(Stipulation) division of loss, it will
be distributed on the
same manner as that of
the profit.
2
Based on AnBased on
industrial partner
Partnership Capital
will not share in the
Agreement loss
Contribution
(Stipulation)
2
Capital Based on
contribution Based on
Partnershipto
should be interpreted Capital
be the original capital, or
the beginning capital
(Stipulation)
balances (in the absence
of a given original capital
contribution).
2
Based on Based on
Partnership Capital
(Stipulation)
REMEMBER: P&L sharing ratio is independent of
the partners’ capital contribution ratio.
2
Based on Based on
Partnership Capital
(Stipulation)
C
A
B
Interest Salaries Bonus
EQUAL DISTRIBUTION OF PROFIT OR LOSS

CASE 1: DISTRIBUTION OF PROFIT AMONG THE PARTNERS
Pasado & Pasmado are partners with capital balances of P300,000 and P700,000
respectively. Profit or loss is distributed equally among the partners. During the year, the
partnership had the following accounts and corresponding amounts:
Sales – P1,000,000
Cost of Goods Sold – P400,000
Operating Expenses – P200,000
Compute for the share of Pasado and Pasmado and prepare the journal entry.

COMPUTATION OF PROFIT OR LOSS
Sales 1,000,000
Cost of Goods Sold (400,000)
Gross Profit 600,000
Operating Expenses (200,000)
Net Profit 400,000
JOURNAL ENTRY
Income Summary 400,000
Pasado, Capital 200,000
Pasmado, Capital 200,000

CASE 2: DISTRIBUTION OF LOSS AMONG THE PARTNERS
Pasado & Pasmado are partners with capital balances of P300,000 and P700,000
respectively. Profit or loss is distributed equally among the partners. During the year, the
partnership had the following accounts and corresponding amounts:
Sales – P500,000
Cost of Goods Sold – P400,000
Operating Expenses – P200,000
Compute for the share of Pasado and Pasmado and prepare the journal entry.

COMPUTATION OF PROFIT OR LOSS
Sales 500,000
Cost of Goods Sold (400,000)
Gross Profit 100,000
Operating Expenses (200,000)
Net Loss (100,000)
JOURNAL ENTRY
Pasado, Capital 50,000
Pasmado, Capital 50,000
ARBITRARY DISTRIBUTION OF PROFIT OR LOSS

CASE 3: DISTRIBUTION OF PROFIT AMONG THE PARTNERS
Uno, Tres & Singko are partners with capital balances of P300,000, P300,000 and P400,000
respectively. Profit or loss will be distributed in the ratio of 2:3:5. During the year, the
partnership generated a net profit of P150,000.
Compute for the partners’ share in the net profit and prepare the journal entry.

COMPUTATION OF PROFIT OR LOSS DISTRIBUTION
Net Profit 150,000
Uno’s Share (150,000 x 2/10) 30,000
Tres’ Share (150,000 x 3/10) 45,000
Singko’s Share (150,000 x 5/10) 75,000
JOURNAL ENTRY
Uno, Capital 30,000
Tres, Capital 45,000
Singko, Capital 75,000

JJ, RR & UU are partners with capital balances of P300,000, P200,000 and P100,000
respectively. Profit sharing ratio is 2:2:4. During the year, the partnership generated a net
loss of P50,000. Among the partners, partner RR is an industrial partner.
Compute for the partners’ share in the net loss and prepare the journal entry.

JJ, RR & UU are partners with capital balances of P300,000, P200,000 and P100,000
respectively. Profit sharing ratio is 2:2:4. During the year, the partnership generated a net
loss of P50,000. Among the partners, partner RR is an industrial partner.
Compute for the partners’ share in the net loss and prepare the journal entry.

COMPUTATION OF PROFIT OR LOSS DISTRIBUTION
Net Loss 50,000
JJ’s Share (50,000 x 2/6) 16,667
RR’s Share (industrial partner not sharing in the loss) -
UU’s Share (50,000 x 4/6) 33,333
JOURNAL ENTRY
JJ, Capital 16,667
UU, Capital 33,333
BASED ON PARTNERS’ CAPITAL CONTRIBUTION

CASE 5: ORIGINAL CAPITAL CONTRIBUTION
Partners CC, PP & AA are partners in the CPA Partnership with capital contributions of
P100,000, P200,000 and P200,000 respectively. During the year, their partnership
generated a net profit of P80,000. There is no agreement on the share of profit or loss
among the partners.
Compute for the shares of the partners in the net profit of the partnership and journalize
the transaction.

DISTRIBUTION OF PROFIT OR LOSS
Net Profit 80,000
Partner CC (80,000 x 100,000/500,000) 16,000
Partner PP (80,000 x 200,000/500,000) 32,000
Partner AA (80,000 x 200,000/500,000) 32,000
JOURNAL ENTRY
CC, Capital 16,000
PP, Capital 32,000
AA, Capital 32,000

CASE 6: ORIGINAL CAPITAL CONTRIBUTION VS BEGINNING CAPITAL BALANCES
Partners XX, YY & ZZ started their partnership 5 years ago by contributing the following
balances:
XX – P100,000
YY – P200,000
ZZ – P300,000
At the beginning of the year, their capital balances were as follow: XX – P300,000; YY –
P500,000; ZZ – P200,000.
During the year, the business generated a net loss of P60,000.
Compute for the net share of the partners in the net loss and journalize the distribution.
2
Capital Based on
contribution Based on
Partnershipto
should be interpreted Capital
be the original capital, or
the beginning capital
(Stipulation)
balances (in the absence
of a given original capital
contribution).

Net Loss 60,000
Partner XX (60,000 x 100,000/600,000) 10,000
Partner YY (60,000 x 200,000/600,000) 20,000
Partner ZZ (60,000 x 300,000/600,000) 30,000
JOURNAL ENTRY
XX, Capital 10,000
YY, Capital 20,000
ZZ, Capital 30,000
2
Based the
Sometimes, on Based on
problems Partnership
will provide Capital
for details on what
capital(Stipulation)
balances to
use: (1) beginning, (2)
ending or (3) average.

CASE 7: DISTRIBUTION OF PROFIT OR LOSS BASED ON BEGINNING CAPITAL BALANCES
The following are the movement of the partners’ balances for the year:
PARTNER BB PARTNER TT PARTNER SS
Beginning Capital 50,000 125,000 75,000
Additional Investments 50,000 25,000 -
Permanent Withdrawals - 50,000 25,000
Ending Capital 100,000 100,000 50,000
Compute for the partners’ shares based on beginning capital balances assuming a net
profit of P200,000 was earned by the partnership for the period.

Net Profit 200,000
Partner BB (200,000 x 50,000/250,000) 40,000
Partner TT (200,000 x 125,000/250,000) 100,000
Partner SS (200,000 x 75,000/250,000) 60,000
JOURNAL ENTRY
BB, Capital 40,000
TT, Capital 100,000
SS, Capital 60,000

CASE 8: DISTRIBUTION OF PROFIT OR LOSS BASED ON ENDING CAPITAL BALANCES
PARTNER BB PARTNER TT PARTNER SS
Beginning Capital 50,000 125,000 75,000
Additional Investments 50,000 25,000 -
Permanent Withdrawals - 50,000 25,000
Ending Capital 100,000 100,000 50,000
Compute for the partners’ shares based on ending capital balances assuming a net loss of
P40,000 was incurred by the partnership for the period.

Net Loss 40,000
Partner BB (40,000 x 100,000/250,000) 16,000
Partner TT (40,000 x 100,000/250,000) 16,000
Partner SS (40,000 x 50,000/250,000) 8,000
JOURNAL ENTRY
BB, Capital 16,000
TT, Capital 16,000
SS, Capital 8,000

CASE 9: DISTRIBUTION OF PROFIT OR LOSS BASED ON AVERAGE CAPITAL BALANCES
PARTNER BB
Beginning Capital, January 01 50,000
Additional Investments, March 01 50,000
Ending Capital, December 31 100,000

PARTNER TT
Additional Investments, March 31 25,000
Permanent Withdrawals, September 01 50,000

PARTNER SS
Permanent Withdrawals, October 31 25,000
Compute for the average capital balances of each partners.


AVERAGE CAPITAL COMPUTATION FOR PARTNER BB
Transaction & Transaction Running Months Product
Transaction Date Amount Balance (A) Unchanged (B) (A * B)
Beginning Balance, 50,000 50,000 2 100,000
January 01
Add’l Investments, 50,000 100,000 10 1,000,000
March 01
1,100,000
Divided by 12
Average Capital 91,667

AVERAGE CAPITAL COMPUTATION FOR PARTNER TT
Beginning Capital, 125,000 125,000 3 375,000
January 01
Additional Investments, 25,000 150,000 5 750,000
March 31
Permanent Withdrawals, 50,000 100,000 4 400,000
September 01
1,525,000
Divided by 12
Ave. Capital 127,083

AVERAGE CAPITAL COMPUTATION FOR PARTNER SS
Beginning Capital, 75,000 75,000 10 750,000
January 01
Permanent Withdrawals, 25,000 50,000 2 100,000
October 31
850,000
Divided by 12
Average 70,833
Capital

PARTNERS AVERAGE CAPITAL BALANCES
Partner BB 91,667
Partner TT 127,083
Partner SS 70,833
Total Average Capital Balances 289,583
The net profit or loss will be distributed on a

ratio based on the balances above, if the
average capital balances is made the basis.
2
Based onin the form
Allowances Based on
of interest,
Partnership
salaries, and bonus Capital
may be
provided as part of profit
Agreement or loss
Contribution
sharing method.
(Stipulation)
C
A
B
2
Based onmay be Based
INTEREST on to
applied
Partnership
compensate for cash Capital
and noncash
assets invested by the
Agreement partner(s)
Contribution
into the partnership.
(Stipulation)
C
A
B

It is to be highlighted that in the context of profit or
loss distribution, the INTEREST IS NOT AN EXPENSE
OF THE PARTNERSHIP to be included in the
computation of net profit or loss.
It is simply a scheme used for reasonable allocation

of profit or loss among the partners.

If the agreement expressly provides for an
allocation of interest among the partners, the
interest must be computed regardless of the results
of operations.
Meaning to say, interest will still be allocated even if

the company’s net profit is insufficient to cover the
interests or if the company incurred a net loss.
INTEREST ON PARTNERS’ CAPITAL CONTRIBUTION

CASE 10: INTEREST APPLIED IN THE COMPUTATION OF PROFIT OR LOSS SHARING
(No profit or loss sharing ratio)
Partners Asa & Kapa are capitalist partners that started their business operations
on August of the current year. Their capital contribution were P120,000 and
P80,000 respectively.
During the year, the partnership generated a net profit of P40,000.
It was agreed that a monthly interest of P3,000 for Asa and P2,500 for Kapa will be
provided.
Compute for the shares of the partners.


Net Profit P40,000
Number of months to compute (August – December) 5
Interest on Partner Asa (P3,000 x 5 months) 15,000
Interest on Partner Kapa (P2,500 x 5 months) 12,500 27,500
Balance after Interest Allocation 12,500
Balance to Partner Asa (P12,500 x 120,000/200,000) 7,500
Balance to Partner Kapa (P12,500 x 80,000/200,000) 5,000 12,500
P -

Net Profit P40,000
Partner Asa (P15,000 + P7,500) 22,500
Partner Kapa (P12,500 + P5,000) 17,500
Distributed Profit 40,000
JOURNAL ENTRY
Asa, Capital 22,500
Kapa, Capital 17,500

(with Profit or Loss Sharing Ratio)
Partners Baka & Naman are capitalist partners with capital contribution of
P80,000 and P70,000 respectively. Profit or loss sharing ratio is at 60%-40%.
During the last 12 months, the partnership incurred a net loss of P20,000.
It was agreed that regardless of the results of operations, partners will still be
receiving a monthly interest of P1,500 each for both partners.


Net Loss (P20,000)
Number of months to compute 12
Interest on Partner Baka (P1,500 x 12 months) 18,000
Interest on Partner Naman (P1,500 x 12 months) 18,000 36,000
Balance after Interest Allocation (56,000)
Balance to Partner Baka (P56,000 x 60%) 33,600
Balance to Partner Naman (P56,000 x 40%) 22,400 56,000
P -

Net Loss (P20,000)
Partner Baka (P18,000 - P33,600) (15,600)
Partner Naman (P18,000 - P22,400) (4,400)
Distributed Loss 20,000
JOURNAL ENTRY
Baka, Capital 15,600
Naman, Capital 4,400

Partners Black & Pink with capital contribution of P300,000 each agreed to form a
partnership. The business started on the month of October of the current year. At
the end of the year, the partnership earned a net income of P15,000.
Partner Black will received a total interest of P15,000 while Partner Pink will
receive a total interest of P12,000. Any difference will be divided equally among the
partners.


Net Profit P15,000
Interest on Partner Black 15,000
Interest on Partner Pink 12,000 27,000
Balance after Interest Allocation (12,000)
Balance to Partner Black (P12,000 / 2) (6,000)
Balance to Partner Pink (P12,000 / 2) (6,000) (12,000)
P -

Net Profit P15,000
Partner Black (P15,000 – P6,000) 9,000
Partner Pink (P12,000 – P6,000) 6,000
Distributed Profit 15,000
JOURNAL ENTRY
Black, Capital 9,000
Pink, Capital 6,000
2
Based on may be Based
SALARIES appliedon to
Partnership
compensate Capital
for services invested
byAgreement
the partner(s)Contribution
into the
partnership.
(Stipulation)
C
A
B

Similar with Interest Allowance, the PARTNERS’
SALARIES ARE NOT EXPENSES OF THE
PARTNERSHIP to be included in the computation of
net profit or loss.
It is just a means of achieving fair division of income

among the partners based on time and talents
devoted to the partnership business.
ILLUSTRATION: SALARY DISTRIBUTION

CASE 13: SALARY ALLOWANCE TO PARTNERS WITH REMAINING NET PROFIT DIVIDED
EQUALLY AMONG THE PARTNERS
Partners Vico & Yorme, both being involved in running the partnership’s business agreed to
provide for a monthly salary allowance of P12,000 to Partner Vico and P10,000 to Partner
Yorme. Salaries will be provided regardless of the results of operations. Remaining profit or
loss shall be distributed equally among the partners.
During the year, the partnership generated a net sales of P1,500,000. Cost of goods sold is
30% of Net Sales while Operating Expenses amounted to P440,000.
Ignoring income tax effect, compute for the distribution of profit or loss among the
partners.

PROFIT OR LOSS COMPUTATION
Net Sales 1,500,000
Cost of Goods Sold (30% of net sales) 450,000
Gross Profit 1,050,000
Operating Expenses 440,000
Net Profit Subject to Distribution 610,000

DISTRIBUTION OF PROFIT OR LOSS COMPUTATION
Salary Allocation to Partners:
Partner Vico (12,000 x 12 months) 144,000
Partner Yorme (10,000 x 12 months) 120,000
Total Salary Allocation to Partners 264,000
Remaining Balance for Distribution 346,000
Equal Distribution to Partners (346,000 / 2 partners) 173,000

Distribution to Partners:
Partner Vico (144,000 + 173,000) 317,000
Partner Yorme (120,000 + 173,000) 293,000
Total Profit Distributed 610,000
JOURNAL ENTRY
Vico, Capital 317,000
Yorme, Capital 293,000

CASE 14: SALARY ALLOWANCE TO PARTNERS GREATER THAN THE NET PROFIT;
REMAINING BALANCE TO BE DISTRIBUTED ARBITRARILY
Cha & Rot are partners in Charot Co., a trading business selling guns and roses. During the
year, the partnership generated a slim profit of P 35,000 due to pandemic.
The partners agreed for an allocation of salaries in the amount of P30,000 for Partner Cha
and P20,000 for Partner Rot.
Remaining balance to be distributed in a 7:3 ratio.
Compute for the distribution of net profit among the partners.


Partner Cha 30,000
Partner Rot 20,000
Remaining Balance for Distribution (15,000)
Partner Cha (15,000 x 7/10) (10,500)
Partner Rot (15,000 x 3/10) ( 4,500)

Partner Cha (30,000 - 10,500) 19,500
Partner Rot (20,000 - 4,500) 15,500
Total Profit Distributed 35,000
JOURNAL ENTRY
Cha, Capital 19,500
Rot, Capital 15,500

CASE 15: SALARY ALLOWANCE TO PARTNERS DESPITE NET LOSS
Assume Case 14. But instead of generating a net profit of P35,000, the company incurred a
net loss of P35,000.
How will the net loss be distributed among the partners?


Net Loss Subject to Distribution 35,000
Partner Cha 30,000
Partner Rot 20,000
Remaining Balance for Distribution (85,000)
Partner Cha (85,000 x 7/10) (59,500)
Partner Rot (85,000 x 3/10) (25,500)

Net Loss Subject to Distribution 35,000
Partner Cha (30,000 - 59,500) 29,500
Partner Rot (20,000 - 25,500) 5,500
Total Loss Distributed 35,000
JOURNAL ENTRY
Cha, Capital 29,500
Rot, Capital 5,500
2
Basedmay
BONUS on also be Based on in
computed
thePartnership Capital
profit or loss sharing scheme of
theAgreement
partners (as an “expense” or as
Contribution
a distribution
(Stipulation)of profit [A. Dayag]).
C
A
B
2
ForBased
this on
purpose, BONUS Basedmay on be
Partnership
computed on the basisCapital
of:
1) Agreement
*Profit before deducting bonus
Contribution
(as a distribution of profit); or,
(Stipulation)
C
A
B
2
2) Based
*Profit on Based
after deducting on (as
bonus
anPartnership Capital the
“expense” in computing
bonus amount)
(Stipulation)
*Profit = Net Income
C
A
B
2
Based on
NOTE: Based on
Partnership
The bonus agreement Capital
is not
applicable
Agreement when the operation is not
Contribution
profitable (Z. Manuel).
(Stipulation)
C
A
B
ILLUSTRATION: BONUS DISTRIBUTION

CASE 16: SIMPLE ILLUSTRATION
The partnership’s profit for the year amounted to P440,000. Y is

entitled to a 10% bonus. Compute the bonus of Y assuming it is
based on:
A. Profit before deduction of bonus.

B. Profit after deduction of bonus.
Source/Reference Book: Avila, Abel, Dela Cruz

COMPUTATION OF BONUS (Case A)

Formula: Bonus = Profit Before Distribution of Bonus x % Bonus
PBDOB 440,000
% Bonus 10%
Bonus 44,000 (440,000 x 10%)

COMPUTATION OF BONUS (Case B)
OPTION/SOLUTION #1:
Available Info: PBDOB = 440,000; % Bonus = 10%
Let ‘x’ represent the Profit after distribution of bonus
Let ‘0.10x’ represent the Bonus
Therefore,
1x + 0.10x = 440,000
1.10x = 440,000
1.10x/1.10 = 440,000/1.10

OPTION/SOLUTION #1:
Available Info: PBDOB = 440,000; % Bonus = 10%
Let ‘x’ represent the Profit after distribution of bonus
Let ‘0.10x’ represent the Bonus
1.10x/1.10 = 440,000/1.10
x = 400,000
0.10x = 40,000

OPTION/SOLUTION #2:
Formula: Bonus = (PBDOB – Bonus) x % Bonus
Available Info: PBDOB = 440,000
% Bonus = 10%
Let ‘x’ represent the Bonus
Therefore, x = (440,000 – x) * 0.10
X = 44,000 – 0.10x
1.10x = 44,000

OPTION/SOLUTION #2:
Formula: Bonus = (PBDOB – Bonus) x % Bonus
Available Info: PBDOB = 440,000
% Bonus = 10%
Let ‘x’ represent the Bonus
1.10x = 44,000
1.10x/1.10 = 44,000/1.10
x = 40,000

Validation of Solutions (Case B)
Option / Solution #1 Option / Solution #2
*PADOB + Bonus = 440,000 Bonus = (^PBDOB – Bonus) x % Bonus
1x + 0.10x = 440,000 40,000 = (440,000-40,000) x 0.10
400,000 + 40,000 = 440,000 40,000 = (400,000) x 0.10
440,000 = 440,000 40,000 = 40,000
*PADOB = Profit After Distribution of Bonus;

^PBDOB = Profit Before Distribution of Bonus

TOPIC 2 - Partnership Operations

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

TOPIC 2 - Partnership Operations

Uploaded by

Copyright:

Available Formats

Partnership Accounting Iksimplified

Accounting for Partnership & Corporation Video Lecture Series LECTURE 03

So, where lies

OPTIONS IN PROFIT OR LOSS DISTRIBUTION

PROFIT OR LOSS DISTRIBUTION

PROFIT OR LOSS DISTRIBUTION

PROFIT OR LOSS DISTRIBUTION

PROFIT OR LOSS DISTRIBUTION

PROFIT OR LOSS DISTRIBUTION

PROFIT OR LOSS DISTRIBUTION

EQUAL DISTRIBUTION OF PROFIT OR LOSS

EQUAL DISTRIBUTION OF PROFIT OR LOSS

EQUAL DISTRIBUTION OF PROFIT OR LOSS

EQUAL DISTRIBUTION OF PROFIT OR LOSS

ARBITRARY DISTRIBUTION OF PROFIT OR LOSS

ARBITRARY DISTRIBUTION OF PROFIT OR LOSS

ARBITRARY DISTRIBUTION OF PROFIT OR LOSS

ARBITRARY DISTRIBUTION OF PROFIT OR LOSS

ARBITRARY DISTRIBUTION OF PROFIT OR LOSS

BASED ON PARTNERS’ CAPITAL CONTRIBUTION

BASED ON PARTNERS’ CAPITAL CONTRIBUTION

BASED ON PARTNERS’ CAPITAL CONTRIBUTION

During the year, the business generated a net loss of P60,000.

PROFIT OR LOSS DISTRIBUTION

BASED ON PARTNERS’ CAPITAL CONTRIBUTION

PROFIT OR LOSS DISTRIBUTION

BASED ON PARTNERS’ CAPITAL CONTRIBUTION

BASED ON PARTNERS’ CAPITAL CONTRIBUTION

BASED ON PARTNERS’ CAPITAL CONTRIBUTION

BASED ON PARTNERS’ CAPITAL CONTRIBUTION

BASED ON PARTNERS’ CAPITAL CONTRIBUTION

BASED ON PARTNERS’ CAPITAL CONTRIBUTION

BASED ON PARTNERS’ CAPITAL CONTRIBUTION

Compute for the average capital balances of each partners.

BASED ON PARTNERS’ CAPITAL CONTRIBUTION

BASED ON PARTNERS’ CAPITAL CONTRIBUTION

BASED ON PARTNERS’ CAPITAL CONTRIBUTION

BASED ON PARTNERS’ CAPITAL CONTRIBUTION

The net profit or loss will be distributed on a

PROFIT OR LOSS DISTRIBUTION

PROFIT OR LOSS DISTRIBUTION

BASED ON PARTNERS’ CAPITAL CONTRIBUTION

It is simply a scheme used for reasonable allocation

BASED ON PARTNERS’ CAPITAL CONTRIBUTION

Meaning to say, interest will still be allocated even if

INTEREST ON PARTNERS’ CAPITAL CONTRIBUTION

During the year, the partnership generated a net profit of P40,000.

Compute for the shares of the partners.

INTEREST ON PARTNERS’ CAPITAL CONTRIBUTION

INTEREST ON PARTNERS’ CAPITAL CONTRIBUTION

INTEREST ON PARTNERS’ CAPITAL CONTRIBUTION

Compute for the shares of the partners.

INTEREST ON PARTNERS’ CAPITAL CONTRIBUTION

INTEREST ON PARTNERS’ CAPITAL CONTRIBUTION

INTEREST ON PARTNERS’ CAPITAL CONTRIBUTION

Compute for the shares of the partners.

INTEREST ON PARTNERS’ CAPITAL CONTRIBUTION

INTEREST ON PARTNERS’ CAPITAL CONTRIBUTION

PROFIT OR LOSS DISTRIBUTION

PROFIT OR LOSS DISTRIBUTION

It is just a means of achieving fair division of income

ILLUSTRATION: SALARY DISTRIBUTION