Who’s Reporting?

Sanita, Canengneng, Natividad,

Shaira Mica Annalyn Shaira Mica
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INTRODUCTION | ACCOUNTING CONSIDERATIONS| PROBLEM-SOLVING

PARTNERSHIP
DISSOLUTION
How to account dissolution of partnership

START
PART 1:
INTRODUCTION
WHAT TO KNOW?
Part 1: Introduction
Part 1: Introduction
Part 1: Introduction
Part 1: Introduction
PART 2:
ACCOUNTING CONSIDERATIONS
WHAT TO KNOW?
Part 2: ACCOUNTING CONSIDERATIONS
• Transfer of ownership Partnership assets will
• Personal transaction be affected
• Current P/L ratio
should be revised

Part 2: ACCOUNTING CONSIDERATIONS

• Transfer of ownership Partnership assets will
• Personal transaction be affected
• Current P/L ratio
should be revised

Part 2: ACCOUNTING CONSIDERATIONS

Part 2: ACCOUNTING CONSIDERATIONS
Part 2: ACCOUNTING CONSIDERATIONS
The capital balances and profit/loss ratio of
the partners in ABC Co. are as follows:

Part 2: ACCOUNTING CONSIDERATIONS

 80 000 x 50%

Part 2: ACCOUNTING CONSIDERATIONS

50 000 – 40 000= 10 000 gain 30% x 50%

Part 2: ACCOUNTING CONSIDERATIONS

Part 2: ACCOUNTING CONSIDERATIONS
Part 2: ACCOUNTING CONSIDERATIONS
Part 2: ACCOUNTING CONSIDERATIONS
Part 2: ACCOUNTING CONSIDERATIONS
Part 2: ACCOUNTING CONSIDERATIONS
Part 2: ACCOUNTING CONSIDERATIONS
Part 2: ACCOUNTING CONSIDERATIONS
Part 2: ACCOUNTING CONSIDERATIONS
Part 2: ACCOUNTING CONSIDERATIONS
Part 2: ACCOUNTING CONSIDERATIONS
Part 2: ACCOUNTING CONSIDERATIONS
Part 2: ACCOUNTING CONSIDERATIONS
Part 2: ACCOUNTING CONSIDERATIONS
Part 2: ACCOUNTING CONSIDERATIONS
Part 2: ACCOUNTING CONSIDERATIONS
Part 2: ACCOUNTING CONSIDERATIONS
Part 2: ACCOUNTING CONSIDERATIONS
Part 2: ACCOUNTING CONSIDERATIONS
 50 000 x P/L
Ratio

Part 2: ACCOUNTING CONSIDERATIONS

 Interest x 30%

Part 2: ACCOUNTING CONSIDERATIONS

• Total Contributed Capital (TCC)- sum of capital
balances of the old partners and the actual
investment of the new partner

• Total Agreed Capital- total capital of the partnership

after considering the capital credit given to each of
the partners

Part 2: ACCOUNTING CONSIDERATIONS

• Agreed Capital New Partner -amount credited to the new
partner after adjustments
• Agreed Capital Old Partners -amount credited old partner
after adjustments
• Asset Revaluation –needs adjustment in asset values upon
admission of new partner. The adjustment in assets may be
determined as the difference of TAC and TCC. Given to Old
Partner
Part 2: ACCOUNTING CONSIDERATIONS
• Goodwill- amount given to any partner (old or new)
for the intangible benefits he will contribute to the
partnership

• Bonus- amount of capital or equity transferred by

one partner to another partner (old to new – new to
old)
Part 2: ACCOUNTING CONSIDERATIONS
 TCC = TAC ----> CC-NP = AC-NP
(No, Revaluation, Goodwill and Bonus)

TCC ≠ TAC ----> CC-NP = AC-NP

(With Revaluation/Goodwill, no Bonus)

TCC = TAC ----> CC-NP ≠ AC-NP

(No Revaluation/Goodwill, with Bonus)

TCC ≠ TAC ----> CC-NP ≠ AC-NP

(with Revaluation/Goodwill, with Bonus)

Part 2: ACCOUNTING CONSIDERATIONS

 1 000 000 x 50%

Part 2: ACCOUNTING CONSIDERATIONS

 Revaluation

1 250 000 x 40%

Part 2: ACCOUNTING CONSIDERATIONS

Part 2: ACCOUNTING CONSIDERATIONS
 P/L x 40%

Part 2: ACCOUNTING CONSIDERATIONS

 Bonus

Part 2: ACCOUNTING CONSIDERATIONS

Part 2: ACCOUNTING CONSIDERATIONS
 50% x 40%

Part 2: ACCOUNTING CONSIDERATIONS

 1 375 000 x 50%

Part 2: ACCOUNTING CONSIDERATIONS

Part 2: ACCOUNTING CONSIDERATIONS
Part 2: ACCOUNTING CONSIDERATIONS
Part 2: ACCOUNTING CONSIDERATIONS
 Admission of Withdrawal/Retirement/ Incorporation
Partner Death

Problem-Solving
Thank you
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Subject: Accounting for Special Transaction
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Code: AFAR 2

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