...Partnership Accounting Akyshia Perry Instructor: ACC407: Advanced Accounting (BBO1248A) September 12 2012 There are a lot of laws about starting a business. So you must be willing to read or get a good lawyer to help you figure out your first move. Identify the number of owners of your business. A business partnership is an association of two or more persons engaged in a business enterprise in which the profits and losses are shared proportionally. The legal definition of a partnership is generally stated as "an association of two or more persons to carry on as co-owners a business for profit." A business partnership can be started with a written or an oral agreement. a partnership agreement often governs the partners' relations to each other and to the partnership. The term person generally includes individuals, corporations, and other partnerships and business associations. Each partner in the partnership has the right to share in the profits and management of the company unless the agreement states otherwise. In many states each partner is jointly and severally liable for the wrongful acts or omissions of a copartner. Although a partner may be sued individually for all the damages associated with a wrongful act, partnership agreements generally provide for indemnification of the partner for the portion of damages in excess of her or his own proportional share. Certain conduct may lead to the creation of an implied partnership. Generally, if a person receives...
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...What is a partnership? According to The basic aspect of partnership accounting, “A partnership is an association of two or more people who agree to share in the profits and losses of a business venture. The members of a partnership are called partners.” (Yaacob, 2009). When discussing partnerships, there are three types of partners that need to be considered, a silent partner, limited liability partner, and a general partner. So when entering into the partnership, it needs to be known upfront exactly which type teach is going to be. There are also three different type of partnerships: a general partnership, limited partnership, or a joint venture partner. These three also need to be considered along with what type of partner each is going to be. When considering a partnership, there are many advantages of partnerships. For example, they are easy to establish and organize, the business benefits, along with many more. Like anything else in this world, there are also disadvantages of entering into a partnership. Things like being jointly and individually reliable for other partner’s actions, profits must be shared, and disagreements are all but guaranteed to arise. There are many more disadvantages that will be covered later on. I will also touch base on the FAS standards, including the creation, operation, and liquidation of partnerships. In the process of considering a partnership, it needs to first be decided the type of partner each wants to be in the partnership, then the...
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...Partnership Accounting Finding of The Study Definition A partnership is an association of two or more persons to carry on as co-owners of a business for profit. Partnerships are sometimes used in small retail, service, or manufacturing companies. Also accountants, lawyers, and doctors find it desirable to form partnerships with other professionals in the field. Characteristics of Partnership Partnerships are fairly easy to form. People form partnerships simply by a verbal agreement, or more formally, by written agreement. We explain the principal characteristics of partnerships in the following sections. Association of Individuals A partnership is a legal entity. A partnership can own property (land, buildings, equipment), and can sue or be sued. A partnership also is an accounting entity. Thus, the personal assets, liabilities, and transactions of the partners are excluded from the accounting records of the partnership, just as they are in a proprietorship. The net income of a partnership is not a taxed as a separate entity. But a partnership must file an information tax return showing partnership net income and each partner’s share of that income. E ach partners share is taxable as personal tax rates, regardless of the amount of net income each withdraws from the business during the year . Mutual Agency Mutual agency means that each partner acts on behalf of the partnership when engaging in partnership business. The act of...
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...General Partnership Agreement of a Business Owned by Individuals ARTICLES OF PARTNERSHIP OF ^ABCD ASSOCIATES ARTICLES OF PARTNERSHIP of ^, ^, ^, and ^, dated ^, 19^. RECITAL The parties hereto wish: (a) to enter together into the business of purchasing, acquiring, operating, leasing, owning and selling real property, including but not limited to that certain parcel of land described on Exhibit A hereto and all improvements constructed thereon and (b) in order to provide for and carry out the foregoing, to form and do business as a general partnership under and pursuant to Illinois law. NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein, the parties agree as follows: Definitions As used in this Agreement the terms listed below will have the meanings stated below, and other terms defined elsewhere will have the meanings there ascribed to them: "Agreement" or "this Agreement": these Articles of Partnership. "Bankruptcy": with respect to any Person, shall mean that such Person shall have become insolvent or generally failed to pay, or admitted in writing his or its inability to pay, debts as they become due; or shall have applied for, consented to, or acquiesced in the appointment of, a trustee, receiver or other custodian for such Person or any property of such Person, or such Person makes a general assignment for the benefit of creditors; or, in the absence of such application, consent...
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...PARTNERSHIP AGREEMENT of the [Name] Investment Club This AGREEMENT of PARTNERSHIP is made as of [Date], by and between the undersigned Partners. Formation The undersigned hereby form a General Partnership in, and in accordance with the laws of, the State of [State]. Name The name of the Partnership shall be [Partnership Name]. Term The Partnership shall begin on [Date], and shall continue until [Date] of the same year and thereafter from year to year unless earlier terminated as hereinafter provided. Purpose The purpose of the Partnership shall be to invest the assets of the Partnership in stocks, bonds, and securities for the financial and educational benefit of the Partners, while employing fundamental principles and techniques of sound investment practices. Meetings Periodic meetings shall be held regularly as determined by the Partnership. Capital Contributions The Partners will each make minimum monthly investments of $[Amount] at regular monthly meetings. Partners may also make optional additional contributions in any $[Amount] increment(s). Regular monthly contributions, normally collected at meetings, are due prior to the scheduled meeting in the case of any planned absence, or by the end of the third day after the meeting from anyone who was unable to attend that monthly meeting due to an emergency or illness. No Partner's capital account shall exceed twenty percent (20%) of the capital accounts of all Partners. Valuation of the Partnership The current...
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...ARTICLES OF PARTNERSHIP OF LEGACY ASSOCIATES KNOW ALL MEN BY THESE PRESENTS: That, we the undersigned, all of legal age and residents of the Republic of the Philippines have agreed to amend a general partnership under the terms and conditions herein after set forth and subject to the provisions of existing laws of the Republic of the Philippines. RECITAL The parties hereto wish: (a) to enter together into the business of purchasing, acquiring, operating, leasing, owning and selling real property, (b) in order to provide for and carry out the foregoing, to form and do business as a general partnership under and pursuant to Philippine law. NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein, the parties agree as follows: Definitions As used in this Agreement the terms listed below will have the meanings stated below, and other terms defined elsewhere will have the meanings there ascribed to them: "Agreement" or "this Agreement": these Articles of Partnership. "Bankruptcy": with respect to any Person, shall mean that such Person shall have become insolvent or generally failed to pay, or admitted in writing his or its inability to pay, debts as they become due; or shall have applied for, consented to, or acquiesced in the appointment of, a trustee, receiver or other custodian for such Person or any property of such Person, or such Person makes a general assignment for the benefit of...
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...JMJC Chocolates Partnership Business Simulation In Partial Fulfilment of the Requirements for the Fundamentals of Accounting 2 By: Joan Patricia Castillo Meg Angeli R. Llanto Joshua Rusit Carlie Loyola ACKNOWLEDGEMENTS This partnership is made possible through the help and support from everyone, including professors, friends and family. First of all we would like to thank God for the strength, clear of mind and guidance to make this business. We would like to offer our special thanks to the customers and friends who buy and love our product. They help us to make our business had income. We are particularly grateful for the assistance given by our parents. They give us money to have capital in our business. Also we would like to extend our thanks to Mrs. Yolanda Castillo to her time and dedication to make this product. Thank you to her delicious cream o chocolate and marshmallow chocolate. We are here because she let us brought her product. Finally, we would like thank our professors Mrs.Emelita Bunyi and Mr. Raphael Iuri Gervasio, to their guide and suggestion to this project. We are glad that we had professors like them. TABLE OF CONTENTS I. | Business Profile | II. | Mision and Vision | III. | Introduction | IV. | Executive Summary | V. | Company Description | VI. | Target Market | VII. | Competitors | VIII. | Competitors' Analysis | IX. | Marketing Plans and Strategies | X. | Products | XII. | Operations | XIII....
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...Year 10 financial statements for a partnership, Fan Company A, have been provided on the “Year 10 Financial Statements” worksheet (see the “Partnership Income and Tax” attachment below). The Year 11 financial data is also provided on the “Year 11 Financial Data” worksheet (see the “Partnership Income and Tax” attachment below). Use ‘Admit Partner D to Partnership’ template section for this data. On January 1, Year 11, Partner A died. The partnership agreement stipulated that in the event of a partner’s death, the partner’s interest would be paid to the estate within 90 days of the date of death. The balances in the partnership accounts were determined on January 1. The partnership has the authority by the partnership agreement to sell the deceased partner’s interest at a minimum of 100% of the capital account at the date of death. The remaining partners found an interested party, Partner D, who paid $350,000 for Partner A’s interest. The partnership agreement specifies that any bonus accruing from the sale of a deceased partner’s interest will be added to the remaining partners as of the date of death. Partner B will receive 5/8 of the bonus and Partner C will receive 3/8 of the bonus. Use ‘REALIGNMENT OF PARTNERSHIP ALLOCATIONS’ template section for this data. On October 1, Year 11, the partners agreed to add a new partner. Partner E will own a 20% share of the partnership. Partner E has some expertise that will benefit the partnership. Partner E is investing $50,000...
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...CHAPTER 15 Accounting for Partnerships CHAPTER OUTLINE Partnership Accounting Partners’ Accounts Ownership Changes Partnership Liquidation Instalment Liquidation Plan of Cash Distribution to Partners Summary Review and Multiple Choice Questions, Case, and Problems LEARNING OBJECTIVES After studying this chapter, you should be able to do the following: • Describe the advantages and disadvantages of the partnership form of organization. • Explain where the major differences lie in the accounting for corporations and partnerships. • Apply the three accounting methods available to record the admission of a new partner, and evaluate the strengths and weaknesses of each method. • Apply the accounting methods for the recording of the retirement of a partner. • Prepare the journal entries to record the liquidation of a partnership when a cash payment to partners is made only after the sale of all of the partnership assets. • Prepare a schedule of the liquidation of a partnership where instalment payments to partners are made as cash becomes available. • Prepare a cash distribution plan prior to the commencement of the partnership liquidation. 1 2 CHAPTER 15 ACCOUNTING FOR PARTNERSHIPS This chapter will examine the accounting practices involved in the partnership form of business organization. The major differences between corporations and partnerships appear in the equity section of the balance sheet. The accounting principles involved have been in use for many...
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...F U N A C C O CHAPTER 1 DEFINITION AND NATURE OF ACCOUNTING Accounting – its function is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions. Stakeholders – all parties who have interest in an entity, whether indirect or direct. Stakeholders are grouped into two, namely: * External Users – groups or individuals who are not directly concerned with the day-to-day operations of the entity. * They make decisions that affect their relationship to the entity. * Internal Users – management personnel in all levels within an entity who are responsible for the planning and control of the operations and therefore, they have access to the day-to-day operations of the entity. Some of the users of financial information: * Investors – concerned with the risk inherit in, and return provided by, their investments. - need information to help them determine whether they should make additional, hold or sell their investments. * Lenders – interested in information that enable them to determine whether their loans, and the interest attaching to them, will be paid when due. * Suppliers and other Trade Creditors – interested in information that enable them to determine whether amount owing to them will be paid when due. * Employees – interested in the information about the stability and profitability of their employers...
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...economics, accounting and finance Understand why financial information is important List the main users of accounting information and understand their information needs Distinguish between management accounting and financial accounting List the main types of business ownership and outline their characteristics Summarize the advantages and disadvantages of each type of business ownership p 2 Panagiotis Dontis Charitos WBS, 2013-14 IN TODAY’S LECTURE... Topics Differences between economics, accounting and finance Importance of financial information Users of accounting information and their information needs Differences between management accounting and financial accounting i Main types of business ownership Characteristics Advantages vs. disadvantages 3 Panagiotis Dontis Charitos WBS, 2013-14 ECONOMICS - FINANCE – ACCOUNTING Economics is a social science Study the production, consumption and distribution of services or goods Explain how economies work and how do different economies interact Finance is a subset/tool of economics that studies the financial markets Personal finance, corporate finance, state finance Accounting is an essential part of finance and economics Precise recording, reporting and assessment of financial deals and transactions of a business Preparation of statements or declarations concerning assets, liabilities, and outcomes of operations of a business 4 Panagiotis Dontis Charitos WBS, 2013-14 ECONOMICS - FINANCE – ACCOUNTING Accounting ...
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...DEFINITION In a contract of partnership, two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profit among themselves. Two or more persons may form a partnership for the exercise of a profession civil Code of the Philippines, article 1767). An association of two or more persons to carry on, as co-owners, a business for profit (Uniform Partnership Act, section 6). Partnerships resemble sole proprietorships, except that there are two or more owners of the business. Each owner is called a partner. Partnerships are often formed to bring together various talents and knowledge or to bring needed capital into a business. Partnerships are generally associated with the practice of law, public accounting, medicine and other professions. Partnerships of this nature are called general professional partnerships. On the other hand, service industries, retail trade, wholesale and manufacturing enterprises may also be organized as partnerships. CHARACTERISTICS OF PARTNERSHIPS The characteristics of partnerships are different from the sole proprietorships already studied in basic accounting. Some of the more important characteristics are as follows: Mutual Contribution.There cannot be a partnership without contribution of money. Property or industry (i.e. work or services which may either be personal manual efforts or intellectual) to a common fund. Division of Profits and Losses...
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...and Marketing a Business The Partnership There are several pros and cons of the partnership as a form of ownership. These are discussed in the succeeding paragraphs. The pros will be discussed first. The first pro of partnership is the ability to combine resources. When partners join forces towards a common goal, they are able to compliment the weaknesses of one and enhance the strength of others. These resources can come in many forms. Very often, the individual or party with the knowledge or product might not have the capital funding to start the business. They can enter into a partnership with someone who can provide the needed finical resources. The second pro of partnership is the idea of shared risk. When partners start a business, the risk of failure and financial liability is divided and shared amongst owners. The amount or extent of liability of each owner varies with different partnerships. These guidelines are usually outlined by a predefined arrangement. The third pro of a general partnership is that they are easier to form than corporations. According to legalzoom.com, “Another benefit of general partnerships is their simplicity and flexibility. General partnerships are usually less expensive to form and require less paperwork and formalities than corporations, limited partnerships or limited liability partnerships.” The cons will now be discussed. The first con of partnership is the lack of complete “creative...
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...Financial Accounting Basic Accounting Concepts and Business Structures Executive Summary Most businesses nowadays either sole proprietorship, partnership or corporation should prepare financial statements in accordance with the Generally Accepted Accounting Principles (GAAP). Financial statements are the major source of financial information that would help management, creditors, and investors in their decision making. Financial reporting is one of the responsibilities of the company in communicating financial information, which guides in investment and credit decisions, assessing cash flow prospects, and about company’s resources, and claims to its resources. Accrual and cash basis of accounting are the methods employed in recording financial transactions, which affect the credibility of its financial information. Generally Accepted Accounting Principles Generally Accepted Accounting Principle (GAAP) is a helpful guide in financial reporting. For the past half a century, less than 50% of the GAAP issued are still effective today. These were reviewed and revised in accordance to the investors, and creditors information needs (Fisher, 1998). GAAP are set of standards and procedures that have substantial authoritative support. The organizations responsible in its development are the Securities and Exchange Commission (SEC), American Institute of Certified Public Accountants (AICPA), Financial Accounting Standards Board (FASB) and Government Accounting Standards...
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...Accounting Principles Textbook/Workbook Arganda, Cardenas-Atis, Del Rosario Jr. (2007) Accounting For Partnership and Corporation Baysa, Lupisan (2004) Advance Accounting Baysa, Lupisan (2008) Management Uses of Accounting Bertol, Cruz, Santiago (1996) Accounting for Management Use Bertol (1996) Fundamentals of Accounting Cabrera, Ledesma, Lupisan (2010) Fundamentals of Accounting Principles Chua Jr., Arenas, Villarina (2007 CPA Examination in Practical Accounting Dayag Sr. (2001) Intermediate Accounting Philippine Edition Alindada, Ledesma, Lupisan (2007) Constructive Accounting Kimwell (1998) PFRS CPE Committee, ASC (2008) CPA Review Financial Accounting And Reporting Hidalgo (1996) Financial Accounting Padilla (1996) Philippine Standards on Accounting CPE Committee (2008) Government Accounting Probre, Magno (1987) Government Accounting Punzalan, Cardona (20110 Partnership and Corporation Accounting Ballada, Ballada (2009) Partnership and Corporation Accounting Cruz-Manuel (2008) Partnership and Corporation Accounting Valencia, Roxas, Asuncion (2006) Applied Auditing Cabrera (2011) Practical Accounting Punzalan (2003) College Accounting Hanna (2005) Advance Accounting Mejorada (2006) Bookkeeping Mejorada (2007 Cost Accounting Mejorada (2000) The Accounting Process Defianco, Mercado (2005) Managerial Accounting Louder Back, Holmen (2003) Managerial Accounting Weygandt...
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