PARTNERSHIP

Capital and Profit Sharing

Anna Patricia F. Malto, CPA

afmalto@icagh.edu.ph
 AGENDA
• Reintroduce partnership type of business
organization
• Apply concepts in fractions, decimals, percentages,
ratios, and proportions to capital and profit sharing
of partnerships
“By the 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 profits among themselves.”

Article 1767 of the Philippine Civil Code

 SOLE
PROPRIETORSHIP

PARTNERSHIP
CORPORATION
“By the 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 profits among themselves.”

Article 1767 of the Philippine Civil Code

“By the 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 profits among themselves.”

Article 1767 of the Philippine Civil Code

CAPITAL

Money Property Industry

Yin and Yang are planning to put up a partnership
with PhP 900,000 total worth of capital. It was
agreed upon that they will be contributing equal
amount of capital.

How much is the share of each partner in the capital?

PhP 450,000
Yin and Yang are planning to put up a partnership
with PhP 900,000 total worth of capital. It was
agreed upon that Yin will contribute ¼ of the capital
and the rest will be provided by Yang.

How much is the share of each partner in the capital?

Yin - PhP 225,000 Yang - PhP 675,000

Yin and Yang are planning to put up a partnership. It
was agreed upon that Yin will give a piece of
property worth PhP 1,800,000 which is equivalent to
40% of the total capital.
1. How much is the total partnership capital?
2. How much is Yang’s share in the capital?

PhP 4,500,000 PhP 2,700,000

“By the 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 profits among themselves.”

Article 1767 of the Philippine Civil Code

Yin and Yang are partners with capital balances of
PhP 20,000 and PhP 30,000, respectively. They
agreed to divide profits and losses according to their
capital ratio.
Find the share of each partner in a net profit of
PhP 60,000.

Yin – PhP 24,000 Yang – PhP 36,000

Partners Yin and Yang agreed to share profits and
losses in their capital ratio.

If the total capital is PhP 24,000 and Yang’s capital is

PhP 16,000, what part of the profit or loss is Yang’s
share?

2/3 or 66.67%
GRADED SEATWORK
Partners Yan, Yin, and Yang agreed to share profits
and losses in the following scheme:

For profits – Yan (60%) Yin (18%) Yang (22%)

For losses - Yan (6/8) Yin (1/10) Yang (15/100)

Further, they agreed that their capital should be in

the ratio of 2:3:4, respectively. The total agreed
capital is PhP 243,000.
HOMEWORK
1. What are financial statements?
2. What are vertical, horizontal, and ratio analyses
being conducted on financial statements?