SAN BEDA COLLEGE ACC2A Partnership and Corporation Accounting Under the supervision of Mr. Jephte O.

Muez, CPA, MBA, MSF SEMESTRAL PAPER Part 1 Partnership

You and your friends have decided to organize a partnership for the business you intend to put. Prepare the following: 1. Articles of Co-Partnership Determine the following: 1.1 1.2 1.3 1.4 Partnership name, purpose and location; Names, citizenship and residences of the partners; Date of formation and duration of the partnership (not less than two years) The capital contribution of each partner, the procedure for valuing non-cash investments, treatment of excess contribution (as capital or as loan) and the penalties for a partners failure to invest and maintain the agreed capital; Rights and duties of each partner; The accounting period to be adopted, the nature of accounting records, financial statements and audits by independent certified public accountant(s); The method of sharing net income or net loss, frequency of income measurement and distribution, including any provisions for the recognition of differences in contributions; The drawings or salaries to be allowed to partners; The provision for arbitration of disputes, dissolution and liquidation.

1.5 1.6

1.7

1.8 1.9 2.

Prepare the income statement of your company for the first year with the following assumptions: 2.1 2.2 2.3 First year of operation will commence on January 1, 2011; Net Income should not be lower than P 1,000,000 as minimum level of profitability; Accounts based on the attached listing (NOTE: Please refer to Annex A for possible accounts to be used for your prospective business. Use the accounts whenever applicable);

2.4

Salaries, interest and bonus will be provided. (NOTE: You will decide upon the salary rate, interest rate and bonus rate as provided in the Articles of Co-Partnership)

SAN BEDA COLLEGE ACC2A Partnership and Corporation Accounting Under the supervision of Mr. Jephte O. Muez, CPA, MBA, MSF 3. Make an assumption if a new partner will be accepted. 3.1 Admission of a new partner by purchase 3.2 Admission of a new partner by investment Provide the necessary accounting entries to record the admission of a new partner. Part 2 Corporation

You and your friends have decided to put up a corporation instead of a partnership. Prepare the following: 1. Articles of Incorporation Determine the following: 1.1 1.2 1.3 1.4 1.5 1.6 1.7 The name of the corporation; The specific purpose or purposes for which the corporation is formed; The principal place of business which must be within the Philippines; The term of existence; The names, nationalities and residences of the incorporators; The number of directors or trustees, which shall not be less than five (5) nor more than fifteen (15); The names, nationalities and residences of the persons who shall act as directors or trustees until the first regular directors or trustees are elected and qualified; For a stock corporation: 1.8.1 Amount of authorized capital stock in pesos 1.8.2 Number of shares into which it is divided; 1.8.3 In case, the shares are par value shares:

1.8

The par value of each share; The names, nationalities and residences of the original subscribers; The amount subscribed and paid by each subscriber on his subscription.

SAN BEDA COLLEGE ACC2A Partnership and Corporation Accounting Under the supervision of Mr. Jephte O. Muez, CPA, MBA, MSF

2.

By-Laws 2.1 The time, place and manner of calling and conducting regular or special meetings of the directors or trustees; 2.2 The time and manner of calling and conducting regular or special meetings of the stockholders or members; 2.3 The required quorum in meetings of stockholders or members and the manner of voting therein; 2.4 The form for proxies of stockholders and members and manner of voting them; 2.5 The qualifications, duties and compensation of directors or trustees and the mode or manner of giving notice thereof; 2.6 The time of holding the annual election of directors or trustees and the mode or manner of giving notice thereof; 2.7 The manner of election or appointment and the term of office of all officers other than directors or trustees; 2.8 The penalties for violations of the by-laws; 2.9 In the case of stock corporations, the manner of issuing stock certificates; and 2.10 Such other matters as may be necessary for the proper or convenient transaction of its corporate business and affairs.

3. 4.

Design your companys stock certificate Provide accounting entries to record the initial investments of the incorporators using the journal entry method.

5. 6.

Prepare the balance sheet as of date of corporate formation. Based on the first year of operation income statement prepared in Part 1, provide assumptions as to dividends to be paid. Correspondingly prepare the Statement of Retained Earnings and Statement of Changes in Shareholders Equity as of 31 December 2011.

INSTRUCTIONS: 1. Do your research from the Securities and Exchange Commission, Philippine Stock Exchange or any other sources (library or online sources). Cite your sources accordingly based on APA Style in manuscript preparation. 2. Use A4 paper 3. Use Times New Roman for the font 4. Font size: 12 5. Pagination should be indicated at the upper right hand corner of each page. SAN BEDA COLLEGE ACC2A Partnership and Corporation Accounting Under the supervision of Mr. Jephte O. Muez, CPA, MBA, MSF 6. Collate your semestral paper as follows: a. b. c. d. e. f. Cover Page Name of your Company (as Partnership and as Corporation) Table of Contents Table of Illustration (if any) Table of Maps (if any) Acknowledgement (optional) Part 1 - Partnership f.1 Articles of Co-Partnership f.2 Income Statement and Balance Sheet f.3 Change in Ownership Part 2 Corporation g.1 Articles of Incorporation g.2 By-Laws g.3 Stock Certificate g.4 Accounting Entries upon Corporate Formation g.5 Balance Sheet as of Date of Corporate Formation g.6 Statement of Retained Earnings and Statement of Changes in Shareholders Equity as of December 31, 2011 References Appendices

g.

h. i.

j. k.

Curriculum Vitae of each group member Groupmates Participation Report specify the contribution of each group member. Rating Matrix will be provided in a separate email. on or before October 15, 2010

DEADLINE:

APPENDIX A SUMMARY OF ACCOUNTS TO BE USED FOR THE INCOME STATEMENT Schedule of Cost of Sales Merchandising / Trading

Merchandise / Finished Goods Inventory, Beginning Add: Purchases (net of purchase discounts, purchase returns and allowances) Total Goods Available for Sale Less: Merchandise / Finished Goods Inventory, End Cost of Sales

SAN BEDA COLLEGE ACC2A Partnership and Corporation Accounting Under the supervision of Mr. Jephte O. Muez, CPA, MBA, MSF Schedule of Cost of Sales (Service)

Direct Charges Salaries, Wages and Benefits Direct Charges Materials, Supplies and Facilities Direct Charges Depreciation Direct Charges Rental Direct Charges Outside Services Direct Charges Others Total Cost of Services (Sum of all Direct Charges) Itemized Deductions

Salaries and Allowances

Fringe Benefit SSS, GSIS, Medicare, HDMF and other Contributions Commission Outside Services Advertising and Promotions Rental Insurance Royalties Repairs and Maintenance Representation and Entertainment Transportation and Travel Fuel and Oil Communication SAN BEDA COLLEGE ACC2A Partnership and Corporation Accounting Under the supervision of Mr. Jephte O. Muez, CPA, MBA, MSF Light and Water Supplies Interest Taxes and Licenses Losses Bad Debts Depreciation Amortization of Intangibles

Depletion Charitable Contribution Research and Development Amortization of Pension Trust Contribution Miscellaneous Total Allowable Expenses

jomunez 09.16.2010