Illustration 1:

Case #1:
The ABC Partnership’s capital balances and profit and loss ratio is shown below:

A, Capital 120,000 50% 50%

B, Capital 100,000 30% 30%
C, Capital 80,000 20% 20%
1/3
Case #1:
D is to be admitted in the partnership by purchasing 1/3 interest of A, B and C for
P100,000.

Case #2: Case #2:

D is to be admitted in the partnership by purchasing ½ interest of B for 80,000.

50%
30%
Case #2.1: 20%
D is to be admitted in the partnership by purchasing ½ interest of all partners for 1/2 of B
200,000. Implied goodwill is to be recorded.

Case #2.2: Case #2.2:

2.2 D is to be admitted in the partnership by purchasing ½ interest of A for 80,000.

Implied goodwill is to be recorded.
50%
30%
Case #2.3: 20%
2.3 D is to be admitted in the partnership by purchasing 1/3 interest of C for 30,000. 1/2 of A
Implied goodwill is to be recorded.

Case #2.3: Case #2.1:

TCC
(After
Partners TCC Goodwill GW) T.of.I TAC
50% A 120,000 25,000 145,000 - 145,000 50%
30% B 100,000 15,000 115,000 - 115,000 30%
20% C 80,000 10,000 90,000 - 30,000 60,000 20%
1/3 of C D - - - 30,000 30,000 1/2 of ALL
300,000 50,000 350,000 - 350,000
30,000 26,667 1/3
3,333 90,000 I FV Cap C
1/2 of ALL
Partners TCC T.of.I TAC
A 120,000 - 40,000 80,000 A, Capital 40,000
B 100,000 - 33,333 66,667 B, Capital 33,333
C 80,000 - 26,667 53,333 C, Capital 26,667
D - 100,000 100,000 D, Capital 100,000
300,000 - 300,000

Partners TCC T.of.I TAC

A 120,000 - 120,000 B, Capital 50,000
B 100,000 - 50,000 50,000 D, Capital 50,000
C 80,000 - 80,000
D - 50,000
300,000 300,000

TCC (After
GW)
Partners TCC Goodwill T.of.I TAC
A 120,000 40,000 160,000 - 80,000 80,000 Goodwill 80,000
B 100,000 24,000 124,000 - 124,000 A, Capital
C 80,000 16,000 96,000 - 96,000 B, Capital
D - - - 80,000 80,000 C, Capital
300,000 80,000 380,000 380,000
60,000 20,000 380,000 I' FV of the P
80,000 160,000

TCC (After
Partners TCC Goodwill GW) T.of.I TAC
A 120,000 50,000 170,000 - 85,000 85,000
B 100,000 30,000 130,000 - 65,000 65,000
C 80,000 20,000 100,000 - 50,000 50,000
D - - - 200,000 200,000
300,000 100,000 400,000 400,000
1/2
150,000 400,000 I FV Cap P
200,000
 A, Capital 80,000
40,000 D, Capital 80,000
24,000
16,000
Illustration 2:
The ABC Partnership’s capital balances and profit and loss ratio is shown Case #1:
below: Partners
A, Capital 120,000 50% 50% A
B, Capital 100,000 30% 30% B
C, Capital 80,000 20% 20% C
25% C.I D
Case #1:
D is to be admitted in the partnership by investing 100,000 for 25%
interest. Case #2:
Partners
Case #2: 50% A
D is to be admitted in the partnership by investing 100,000 for 20% 30% B
interest. 20% C
20% C.I D
Case #3:
D is to be admitted in the partnership by investing 100,000 for 20% Case #3:
interest. Use Goodwill Method. Partners
50% A
Case #3.1 30% B
D is to be admitted in the partnership by investing 60,000 for 20% interest. 20% C
Use Goodwill Method. 20% C.I D

Case #4: TOPC/CI% Limit 1

D is to be admitted in the partnership by investing 200,000 for 25% Case #3.1
interest. The land owned by the partnership will be revalued and will be Partners
increased by 100,000 before admission. 50% A
30% B
Case #5: 20% C
D is to be admitted in the partnership by investing 100,000 for 20% 20% C.i D
interest. The partners agreed that the new total capital of the partnership
will be P600,000.
LIMIT 1
Case #4:
Case #6: Partners
D will invest sufficient cash that will give him 20% interest. 50% A
30% B
Case #6.1 20% C
D will invest sufficient cash that will give him 1/3 interest. 25% C.I D

Case #6:
Partners TCC TAC Case #5:
50% A 120,000 120,000 Partners
30% B 100,000 100,000 50% A
 20% C 80,000 80,000 *300k / 80% = 375k 30% B
20% of CI D 75,000 75,000 20% C
375,000 375,000 20% C.I D

Case #6.1
Partners TCC TAC Another Approach:
50% A 120,000 120,000 Partners
30% B 100,000 100,000 50% A
20% C 80,000 80,000 *300k / 2/3 = 450k 30% B
1/3 C.I D 150,000 150,000 20% C
450,000 450,000 20% C.I D
 TCC Bonus TAC
120,000 - 120,000
100,000 - 100,000 Cash 100,000
80,000 - 80,000 D, Capital 100,000
100,000 - 100,000
400,000 400,000

TCC Bonus TAC Cash 100,000

120,000 10,000 130,000 D, Capital 100,000
100,000 6,000 106,000
80,000 4,000 84,000 D, Capital 20,000
100,000 - 20,000 80,000 A, Capital 10,000
400,000 B, Capital 6,000
C, Capital 4,000
TCC Goodwill Bonus TAC
120,000 50,000 - 170,000 400,000
100,000 30,000 - 130,000
80,000 20,000 - 100,000
100,000 - - 100,000
400,000 100,000 - 500,000
375,000 *300K/80% Limit 2 500,000 I' FV Capital NPC/CI%
*GW ---- NEW PARTNER *100K/20% *GW -- OLD PARTNERS
TCC Goodwill Bonus TAC
120,000 - - 120,000
100,000 - - 100,000
80,000 - - 80,000
60,000 15,000 - 75,000
360,000 15,000 - 375,000
375,000 LIMIT 2 300,000

TCC Revaluation Gain Adjusted Cap. Bonus TAC

120,000 50,000 170,000 25,000 195,000
100,000 30,000 130,000 15,000 145,000
80,000 20,000 100,000 10,000 110,000
200,000 - 200,000 - 50,000 150,000
500,000 100,000 600,000 - 600,000

TCC Goodwill TAC

120,000 90,000 210,000
100,000 54,000 154,000
80,000 36,000 116,000
100,000 20,000 120,000
400,000 200,000 600,000

TCC Goodwill Bonus TAC

120,000 100,000 - 10,000 210,000
100,000 60,000 - 6,000 154,000
80,000 40,000 - 4,000 116,000
100,000 - 20,000 120,000
400,000 200,000 600,000
Cash 100,000
D, Capital 100,000

Goodwill 100,000
A, Capital 50,000
B, Capital 30,000
C, Capital 20,000
Illustration 3: Case #1:
Partner A
The ABC Partnership’s capital balances and profit and loss ratio is shown below:
120,000
A, Capital 120,000 50% 5/8 80,000
B, Capital 100,000 30% 3/8 200,000
C, Capital 80,000 20%
Case #2:
Case #1: Partner A
C withdrew from the partnership and received 100,000 from A as payment of his 120,000
capital. 12,500
Bonus -
Case #2: 132,500

C withdrew from the partnership and received 60,000 as payment of his capital.

Case #3: Case #3

C withdrew from the partnership and received 120,000 as payment of his capital. Use Partner A
Partial goodwill method. 120,000
-
Case #3.1 -
Use Full Goodwill Method 50% 30% 20% 120,000
Partner A Partner B Partner C
120,000 100,000 80,000
100,000 60,000 40,000
- - - 120,000
220,000 160,000 -

Total GW *40k/20% = 200k

GW 200,000
A, Capital 100,000
B, Capital 60,000
C, Capital 40,000

C, Capital 120,000
Cash 120,000

Alternative:
GW 200,000
C, Capital 80,000
A, Capital 100,000
B, Capital 60,000
Cash 120,000
Partner B Partner C
100,000 80,000 C, Capital 80,000
- - 80,000 A, Capital 80,000
100,000 -

Partner B Partner C
100,000 80,000 C, Capital 80,000
75,000 - 20,000 A, Capital 12,500
- - 60,000 B, Capital 7,500
175,000 - Cash 60,000

Goodwill 40,000
C, Capital 40,000

Partner B Partner C C, Capital 120,000

100,000 80,000 Cash 120,000
- 40,000
- - 120,000
100,000 - Alternative:
C, Capital 80,000
GW 40,000
Cash 120,000
 Partner A Partner B
150,000 200,000
20,000 30,000
170,000 230,000

Case #1:
Partner A Partner B
TC 170,000 230,000
10 10
17,000 23,000

Case #2
Partner A Partner B
TC 170,000 230,000
- 140,000 - 210,000
30,000 20,000

Share Premium

Case #3:
Partner A Partner B
170,000 230,000
- 10,000 - 10,000
160,000 220,000
 Partner C
300,000 Capital before Adj.
50,000 Net Adjustments
350,000 Capital after Adj.

Partner C
350,000 Capital after Adj.
10
35,000 # of Shares

Partner C
350,000
- 350,000 Total SC
- Any Excess (SP)

50,000 TC 750,000
SC - 700,000
Share Premium 50,000

Partner C Partner A Partner B Partner C

350,000 # of O/S 1,000 1,000 1,000
- 10,000 # of P/S 1,600 2,200 3,400
340,000