Unang una of course in partnership accounting is yung pagrerecord ng contributions ng partners.

Yung
contribution is pwedeng money, property, or industry.

So, if yung contribution is money or property, magkakaroon ng accounting JOURNAL ENTRY. Idedebit yung
cash or non-cash asset nan a-contribute, then credit partner’s capital account or equity.

Journal Entry: Cash or Non-cash asset xxx

Capital/Equity Account-Partner xxx

And, kapag industry naman yung contribution, MEMORANDUM ENTRY yung gagamitin. Words lang siya,
walang amounts.

Memo Entry: Bonifacio was admitted as general manager for a 17% share in the net profit.

(Naging partner siya kasi yung icocontribute niya is yung skill niya as manager, kaya memorandum
entry ang need.)

Example:

1. CASH CONTRIBUTIONS ONLY-CAPITALISTPARTNER

(Sa case na ‘to, capitalist partners sila both since parehas sila na cash yung ni-contribute.)

Karl and Vincent agreed to form a partnership by contributing P600,000 cash each.

Cash 1,200,000

Karl, Capital 600,000

Vincent, Capital 600,000

2. CASH AND NON-CASH CONTRIBUTIONS-CAPITALIST PARTNER

(Sa case naman na ‘to, capitalist partners pa din kasi money and property)

Karl and Vincent agreed to make the following contributions to the partnership

Karl Vincent

Cash P600,000 P200,000

Inventories 300,000

Equipment 500,000

Cash 800,000

Inventories 300,000

Equipment 500,000

Karl, Capital 900,000

Vincent, Capital 700,000

 3. CONTROBUTIONS IN THE FORM OF CASH, NON-CASH ASSET, AND INDUSTRY-
CAPITALIST AND INDUSTRIAL PARTNERS
(So, dito naman sa case na ‘to may industrial partner na)

Karl, Vincent, and Bonifacio formed a partnership. Karl contributed P600,000 cash, Vincent contributed
P300,000 cash and equipment valued at P450,000. Bonifacio is an industrial partner to contribute his special
skills and talents to the partnership. Profit or loss is to be shared equally among the partners.

To record the contributions of Karl and Vincent (capitalist partners):

Cash 900,000

Equipment 450,000

Karl, Capital 600,000

Vincent, Capital 750,000

To record the contribution of Bonifacio:

Bonifacio was admitted into the partnership as an industrial partner to share one-third in the partnership
profit.

Ganyan yung 3 possible cases sa recording ng contributions.

Pero may rule sa partnership kung paano ivavalue yung contributions ng partners.

 If the contribution is in the form of CASH AND CASH EQUIVALENTS, it is recorded in its FACE
VALUE
Face Value- ito yung as is na amount nung cash, kung 1M yung ni-contribute, edi 1M yung value.

 If the contribution is in the form of PROPERTY, it should be adjusted and recorded in its FAIR
MARKET VALUE.
Fair Market Value- ito yung value nung asset or liability na pinag-agreehan ng both parties for that
transaction. Example, may equipment na ang original price is 500,000, pero in that transaction ang
napag-agreehan is 450,000. Ang irerecord na value is yung 450K kasi yun yung FMV or fair market
value. Usually, sinasabi naman sa problem yan if ever may FMV.

So, yung partnership naoorganize siya in the following.

1. Two or more individuals without existing business form a partnership.

a. Money contributions
b. Money and property contributions
c. Money, property and industry contributions

(Nabigyan ko na example kanina yang mga case na yan. In partnership, pwedeng bumuo ng
partnership yung two or more individuals na wala pang existing business.)

2. Conversion of a sole proprietorship to partnership.

a. One or more sole proprietors and one or more individuals without existing business form a
partnership.
 (Example, ikaw may business ka na as sole proprietor tapos ako walang business. Pwede bumuo
ng partnership, even ako walang existing business)
b. Two or more sole proprietors form a partnership.
(Dito naman, dalawa kayong may existing business, icocobine niyo to form a partnership. Yung
asset and equity ng dating business is pwedeng itransfer sa partnership, or mag-oopen kayo ng
panibagong book na hindi kasama yung asset and equity ng businesses niyo)
3. Dissolution- alam mo naman na ditto yung part na may madadagdag or mawawalang partner.
a. Admission of a new partner (magkakaroon panibagong partner)
b. Retirement of a partner (may aalis na partner)
(Every time kasi may madadagdag or mababawas na partner, magkakaroon lagi ng new
partnership. Meaning, may panibagong articles of partnership, may panibagong name, may
panibagong agreements ganern. Madidissolve yung unang partnership, and mapapalitan ng bago)

Yan lang ata lahat. Tanong ka nalang if may gusting maexplain pa.

Galingan sa report. I love you always!!!! Miss you so much mahal. Kaya mo yan, mwa hugs. <3

Dito lang me if need. Rooting for you, love you mahal!!!!