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  • Partnership Operation

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    guliramsam5
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    The document outlines the key terms and calculations used in partnership operations and accounting. It discusses how capital contributions are calculated based on original, beginning, ending, and average amounts. It also explains how net income is distributed, with salaries, interest, and bonuses deducted in a specific order, and any remainder distributed among partners. Bonuses are calculated as a percentage of net income after deducting salaries and previous bonuses. Temporary withdrawals are excluded from average capital but included in ending capital balances.

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    The document outlines the key terms and calculations used in partnership operations and accounting. It discusses how capital contributions are calculated based on original, beginning, ending, and average amounts. It also explains how net income is distributed, with salaries, interest, and bonuses deducted in a specific order, and any remainder distributed among partners. Bonuses are calculated as a percentage of net income after deducting salaries and previous bonuses. Temporary withdrawals are excluded from average capital but included in ending capital balances.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    5 views1 page

    Partnership Operation

    Uploaded by

    guliramsam5
    The document outlines the key terms and calculations used in partnership operations and accounting. It discusses how capital contributions are calculated based on original, beginning, ending, and average amounts. It also explains how net income is distributed, with salaries, interest, and bonuses deducted in a specific order, and any remainder distributed among partners. Bonuses are calculated as a percentage of net income after deducting salaries and previous bonuses. Temporary withdrawals are excluded from average capital but included in ending capital balances.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 1

    Partnership-Operation

    P- Period
    R- Results
    A- Agreement
    D- Distribute
    C- Capital Balance

    Capital Contribution:
    1. Original
    2. Beginning
    3. Ending
    4. Average- temporary withdrawal is not included in computing average capital but included in
    Ending Capital
    a. Weighted Average= Amount x time
    b. Simple Average= Beginning + Ending / 2

    N- Net Income
    S- Salaries
    I- Interest
    B- Bonus
    R- Remainder

    Bonus:
    Bonus on Net Income
    Bonus on Net Income after Salaries
    Bonus on net Income after Salaries and Bonus
    1B = B% (NY – SALARIES – BONUS)
    if loss no Bonus
    the salaries and interest is always computed even if its net loss

    Note: Temporary Withdrawal not included in computing average capital but included in computing
    ending capital.

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