AMERICAN TECHNICAL INSTITUTE OF BUSINESS EDUCATION “ITECA”

CORPORATE ACCOUNTING
COLLECTIVE COMPANIES

CONCEPT:

 They are companies of people that are established by public instrument.

(Constitution testimony)
 Personal appearance is decisive
 The moral conditions must be mutually known
 There must be mutual trust, skill and capacity to undertake the business.

Aspects that will be taken for signing the social contract (Constitution Testimony)

CHARACTERISTIC

 This type of company is characterized by the partners being jointly and unlimitedly liable
for (lost) social obligations, even with their personal assets to cover their obligations .

NAME

 The name or company name must contain the word “collective company or its abbreviation
“SC”, in some cases the word and Company or its abbreviation will be added.

Example:

Buena Vista Collective Society

BUENA VISTA SC
BUENA VISTA SC and CIA.

CONSTITUTION

It is constituted through the instrument of constitution: (Testimony of constitution) with those

established in article 127 of the Commercial Code.

CAPITAL CONTRIBUTIONS

Partners can contribute to the partnership in cash, securities and assets.

FORMS OF CAPITAL CONTRIBUTIONS BY PARTNERS

The capital contribution of the partners can be immediate and mediated:

Immediate Contributions:

When the partners cover their contributions when celebrating the constitution of the company

Mediate Contributions :

This practice is very common:

It is when the partners, at the time of signing the constitution of the company, partially cover
their contributions with the commitment to complete the total within specified periods, generally
up to 2 and 3 months.

MANAGING PARTNERS

The dominant note of the internal legal relations within the collective society is the possibility of
participation of all partners in the social management. However, in the public deed of
incorporation the regime that the partners deem most convenient in terms of the administration of
the company can be agreed upon. The deed will include "the partners who are entrusted with the
administration and representation of the company."

The partners who manage the company, in return for their work effort, have the right to receive a
monthly salary, which must appear in the accounting records as operating expenses and in order
for them to be deductible for the purposes of determining the profit of the management, they must
be reflected in the salary sheets with the application of labor laws

In collective societies, other people outside the company can also be entrusted with the administration
called INDUSTRIAL PARTNERS , whose contribution consists of the provision of personal or
industrial work, that is, they are obliged to present their effort, knowledge and dedication in favor of
the company. of the society.

The Commercial Code, in article 156, establishes that this type of contributions must be specifically
stipulated in the articles of incorporation. Its value is not part of the social capital , however, it has the
right to profits in an agreed proportion and does not bear losses.

On the other hand, if the industrial partners do not comply with their obligations, the company has the
right to separate them, without prejudice to judicially demanding compensation for the damages
caused, in the event of establishing fraud and fault.

DISTRIBUTION OF PROFITS

The form of distribution of profits or losses in collective societies must be specified in the
incorporation contract, generally it is in proportion to the capital contributed, being the most common
way, however, there may be other forms of distribution of profits: Example in part equal, in proportion
to participation in the administration, however, the latter are unusual.

ACCOUNTING PRACTICE

On 04/01/2020 , a company was established whose corporate name will be “PLATA y

COMPAÑIA” Collective Company. The immediate capital contributions were constituted as
follows:

Partner Jesús Plata :

 Cash 10.000,00
 Merchandise 20.000,00
 Vehicle 50.000,00

Good Fair Partner:

 Deposit in the bank account of 45.000,00

 computer equipment 10.000,00
 Accounts receivable 15.000,00

Maximum Good Partner:

 Merchandise 30.000,00
 Furniture and fixtures 10.000,00
 A Bill Receivable with a 30-day term 40,000.00

It is requested:

a) Contribution consolidation table

b) Opening balance
c) opening seat
La Paz, April 2020
PCQ.
PRACTICAL RESOLUTION

to)
SILVER and CIA SC

CONSOLIDATION TABLE OF CONTRIBUTIONS

As of April 1, 2020
(In Bolivians)

DETAIL PARTNER: PARTNER: PARTNER: TOTAL

JESÚS JUST GOOD: MAXIMUM
PLATA : GOOD

Cash 10.000,00 10.000,00

Bank deposit 45.000,00 45.000,00
Accounts receivable 15.000,00 15.000,00
Bills Receivable within 30 days 40.000,00 40.000,00
20.000,00 30.000,00 50.000,00
Merchandise
10.000,00 10.000,00
Furniture and fixtures 50.000,00 50.000,00
Vehicles
Computing team 10.000,00 10.000,00
TOTAL 80.000,00 70.000,00 80.000,00 230.000,00

b)
SILVER and CIA SC

OPENING BALANCE
As of April 1, 2020
(In Bolivians)

ASSET PASSIVE AND HERITAGE

Current active Heritage
Box 10.000,00 Share capital 230,000.00
Banks 45.000,00 Partner capital J. Silver 80.000,00
Accounts receivable 15.000,00 Partner capital J. Well 70.000,00
Documents receivable 40.000,00 Partner capital M Bueno 80.000,00
Merchandise inventory 50.000,00 Total assets 230.000,00
Total, current assets 160,000.00
Non-current asset
Furniture and fixtures 10.000,00
Vehicles 50.000,00
computer equipment 10.000,00
Total, non-current assets 70,000.00
Total, active 230.000,00 Total liabilities and equity 230.000,00

c)
opening seat

PRACTICE #2
 Partner contribution

1) On 02/01/2020, the commercial Collective Company Plata y Compañía was established,

for which purpose the deed of incorporation is divided, in the share capital part it reveals
that it will be formed as follows:

Fair Partner Contribution Silver Bs100,000.00

Leisure contribution Jesús Paz Bs 85,000.00
Maximum Good Member Contribution Bs 75,000.00

2) The contributions were made in their entirety at the time of the formulation of the
corporate deed with the following detail:

Partner Contribution J. Silver :

 Merchandise 60.000,00
 Cash 26.000,00
 computer equipment 14.000,00

Partner Contribution J. Peace :

 Cash 35.000,00
 Various Furniture 15.000,00
 motor vehicle 35.000,00

Member Contribution M. Well:

 Various furniture 5.000,00
 Deposit in Banco Unión 55,000.00
 Merchandise 15.000,00

Requested:
a) Make the contribution table
b) Opening balance
c) opening seat
La Paz, May 2020
PCQ.

SILVER and CIA SC

 CONSOLIDATION TABLE OF CONTRIBUTIONS
As of February 1, 2020
(In Bolivians)

DETAIL PARTNER: PARTNER: PARTNER: TOTAL

JESUS JUST PEACE MAXIMUM
SILVER : GOOD

Cash 26.000,00 35.000,00 61.000,00

Bank deposit 55.000,00 55.000,00
Merchandise 60.000,00 15.000,00 75.000,00
Furniture and fixtures 15.000,00 5.000,00 20.000,00
Vehicles 35.000,00 35.000,00
Computing team 14.000,00 14.000,00
TOTAL 100.000,00 85.000,00 75.000,00 260.000,00

b)
SILVER and CIA SC

OPENING BALANCE
As of February 1, 2020
(In Bolivians)

ASSET PASSIVE AND HERITAGE

Current active Heritage
Box 61.000,00 Share capital 260,000.00
Banks 55.000,00 Partner capital J. Silver 100.000,00
Merchandise inventory 75.000,00 Share capital J. Peace 85,000.00
Total, current assets 191,000.00Share capital M. Good 75,000.00
Non-current asset
Furniture and fixtures 20.000,00
Vehicles 35.000,00
computer equipment 14.000,00
Total, non-current assets 69,000.00
Total, active 260.000,00 Total liabilities and equity 260.000,00

MEDIUM CONTRIBUTIONS
PRACTICE #3

1) On 03/01/2020 , a company was established whose corporate name will be Paz y Cía.
Collective society. The capital was constituted as follows:

Partner Andrés Paz :

Committed capital: 80.000,00

 Effective cancellation of 10.000,00

 Delivery of merchandise valued at 25.000,00
 Documents receivable within 30 days 35.000,00

The balance must be paid within 30 days

Good Fair Partner:

Committed Capital: 80.000,00

 Deliver merchandise valued at 25.000,00

 computer equipment 10.000,00
 Accounts payable (10.000,00)
 Cash 30.000,00

The balance must be paid within 30 days

Maximum Silver Member:

Committed capital: 80.000,00

 Cash deposited in Bank Account 20,000.00

 Merchandise 20.000,00
 Furniture and fixtures 10.000,00
 Vehicle 40.000,00
 Accumulated depreciation vehicle (16,000.00)

The balance must be paid within 30 days

It is requested:

d) Contribution table
e) Opening balance
f) opening seat
La Paz, May 2020
PCQ.

PRACTICAL RESOLUTION
to)
PAZ and CIA SC

CONSOLIDATION TABLE OF CONTRIBUTIONS

As of March 1, 2020
(In Bolivians)

DETAIL PARTNER: PARTNER: PARTNER: TOTAL

TO PEACE JUST GOOD: MAXIMUM
SILVER
Cash 10.000,00 30.000,00 40.000,00
Bank deposit 20.000,00 20.000,00
Documents Receivable within 30 days 35.000,00 35.000,00
Merchandise 25.000,00 25.000,00 20.000,00 70.000,00
Furniture and fixtures 10.000,00 10.000,00
Vehicles 40.000,00 40.000,00
Depreciation accumulates vehicles (16.000,00) (16.000,00)
Computing team 10.000,00 10.000,00
Accounts payable (10.000,00) (10.000,00)
Contributions receivable from partners 10.000,00 25.000,00 6.000,00 41.000,00
TOTAL 80.000,00 80.000,00 80.000,00 240.000,00

b)
PAZ and CIA SC

OPENING BALANCE
As of March 1, 2020
(In Bolivians)

ASSET PASSIVE AND HERITAGE

Current active Passive
Cash 40,000.00 Current liabilities
Banks 20.000,00 Accounts payable 10.000,00
Notes receivable 35,000.00 Total current liabilities 10,000.00
Contributions receivable 41,000.00 Total liabilities 10,000.00
Merchandise inventory 70,000.00 Equity
Total, current assets 206,000.00 Share capital 240,000.00
Non-current assets Partner capital Paz 80,000.00
Furniture and fixtures 10,000.00 Partner capital Good 80,000.00
Vehicles 40,000.00 Silver partner capital 80,000.00
Acute depreciation Vehicles (16,000.00) 24,000.00 Total assets 240,000.00
computer equipment 10.000,00
Total, non-current assets 44.000,00
TOTAL, ACTIVE 250.000,00 TOTAL LIABILITIES AND EQUITY 250,000.00

c)
opening seat

PRACTICE #4
 2) On 04/01/2019 , a commercial company was established whose corporate name will
be Cuentas y Cía. Collective society. The capital was constituted as follows:

Partner Fredy Bueno :

Committed capital : 80.000,00
 Merchandise according to invoice 40.000,00
 Checking account deposit 10.000,00
 Documents receivable 25.000,00
 Suppliers 5.000,00

Partner Ernesto Paz:

Committed Capital: 80.000,00
 Customers 24.120,00
 computer equipment 20.000,00
 Suppliers 5.000,00
 Cash $us3,000.00

Partner Maximiliano Accounts:

Committed capital: 80.000,00
 Bank Deposit $us2,000.00
 Goods in transit 25.910,00
 One Telefónica COTEL share $us2,000.00
 computer equipment 15.000,00
 Accumulated depreciation computer equipment (3,750.00)

Capital partners pay the balance of their contributions within 30 days, with deposit to
the company's bank account.
Official exchange rate: Bs6.96 per $us1.00
It is requested:

a) Contribution table
b) Opening balance
c) opening seat
La Paz, May 2020
PCQ.

ACCOUNTS and CIA SC

CONSOLIDATION TABLE OF CONTRIBUTIONS

 As of April 1, 2019
(In Bolivians)

DETAIL PARTNER: F. PARTNER: E. PARTNER: TOTAL

WELL PEACE M.
ACCOUNTS
Cash 20.880,00 20.880,00
Bank deposit 10.000,00 13.920,00 23.920,00
Customers 24.120,00 24.120,00
Documents Receivable within 30 days 25.000,00 25.000,00
Merchandise 40.000,00 40.000,00
Goods in transit 25.910,00 25.910,00
Computing team 20.000,00 15.000,00 35.000,00
Accumulated depreciation computer (3.750,00) (3.750,00)
equipment 13.920,00 13.920,00
COTEL telephone action (5.000,00) (5.000,00) (10.000,00)
Suppliers 10.000,00 20.000,00 15.000,00 45.000,00
Contributions receivable from partners
TOTAL 80.000,00 80.000,00 80.000,00 240.000,00

ACCOUNTS and CIA SC

OPENING BALANCE
As of April 1, 2020
(In Bolivians)

ASSET PASSIVE AND HERITAGE

Current active Passive
Cash 20,880.00 Current liabilities
Banks 23.920,00 Accounts payable 10.000,00
Accounts receivable 24,120.00 Total current liabilities 10,000.00
Notes receivable 25,000.00 Total liabilities 10,000.00
Contributions receivable 45,000.00 Equity
Merchandise inventory 40,000.00 Share capital 240,000.00
Goods in transit 25,910.00
Total, current assets 204,830.00 Partner capital Good 80,000.00
Non-current assets Partner capital Paz 80,000.00
Computer equipment 35,000.00 Partner capital Accounts 80,000.00
Accumulated depreciation
Computer equipment (3,750.00) 31,250.00
Total, Fixed assets 31,250.00
Investments
Investments in telephone shares 13,920.00
Total, investments 13,920.00
T otal, non-current assets 45.170,00
TOTAL, ACTIVE 250.000,00 TOTAL LIABILITIES AND EQUITY 250,000.00

c)
opening seat

Accounting record payment of partner contributions:

 DATE DESCRIPTION PARTIAL HAS TO TO HAVE
30/04/2019 Banks 45.000,00
Contributions receivable from partners 45.000,00
Partner Fredy Bueno 10.000,00
Partner Ernesto Paz 20.000,00
15.000,00
Partner Maximiliano Accounts

To record payment of contributions

committed by partners in the constitution
of the commercial company CUENTAS
Y CIA SC.

TOTAL 45.000,00 45.000,00 45.000,00

MANAGING PARTNERS

According to Art. 175º CC

 Own partners
 Others

When the partners manage, their efforts must be compensated, therefore, they
enjoy the monthly salary, which must be recorded in accounting books, so that
they are considered deductible expenses for the purposes of determining the
IUE .

Exercise No. 5

According to the constitution:

 Partner A. General Manager, has been assigned a salary of Bs8,000.00

 Partner B. Administrative Manager, assigned Bs7,000.00
 Partner C. Commercial Manager, has been assigned Bs6,000.00

At the close of business on 12/31/2019, according to accounting records, the

following withdrawals were made:

Partner A. General Manager, 96,000.00

Partner B. Administrative Manager, 89,000.00
Partner C. Commercial Manager, 70,000.00

It is requested:
Accounting record.
 CHART OF SALARY ASSIGNED AND COLLECTED
As of 12/31/2019
(Expressed in Bolivians)
NAME POST ALLOCATE SALARY DIFFERENCE
D SALARY CHARGED
Partner “A” General manager 96.000,00 96.000,00 0,00
Partner “B” Administrative 84.000,00 89.000,00 (5.000,00)
manager
Partner “C” Commercial manager 72.000,00 70.000,00 2.000,00
TOTALS 252.000,00 255.000,00 3.000,00

PARTNER SALARY – A PARTNER SALARY – B PARTNER SALARY – C

96.000,00 89.000,00 70.000,00

Accounting record:

DATE DESCRIPTION HAS TO TO HAVE

31/12/2019 Partner “B” personal account 5.000,00
“C” partners salary 2.000,00
Partner “B” salary 5.000,00
Partner personal account “C” 2.000,00

To record the adjustment of salaries

collected in excess and underpayment as
of 12/31/2019.
TOTAL 7.000,00 7.000,00

PARTNER SALARY – A (G) PARTNER SALARY – B PARTNER SALARY – C

96.000,00 89.000,00 5.000,00 70.000,00

2.000,00
96.000,00 89.000,00 5.000,00
84.000,00 72.000,00

PERSONAL ACCOUNT PERSONAL ACCOUNT

PARTNER “B” (A) PARTNER “C” (P)

5.000,00 2.000,00

5.000,00 2.000,00

MANAGEMENT BY INDUSTRIAL PARTNERS

Art. 156º CC

Contributions from industrial partners, their value is part of the share capital,
they are entitled to profits in the agreed proportion and do not bear losses.

Example:

Silver and Co. SC, was established by Plata and Alanes capitalist partners and
Rico industrial partner, the industrial partner receives Bs5,000.00 monthly
charged to results (Profits), Profits apply at 35% for each of the capitalist
partners and 30 % for the industrial partner, after establishing a reserve reserve
of 10% of the liquid and effective profit.

The profits as of 12/31/2019 , after the IUE, amount to Bs250,000.00 , the Rico
partner Retirement account has a balance of Bs60,000.00

It is requested :

Accounting records.

PROFIT DISTRIBUTION:

a) In proportion to participation in the administration

b) In proportion to capital contributions
c) In equal parts.
La Paz, May 2020
PCQ/…

PRACTICAL RESOLUTION:
Exercise No 6

MANAGEMENT UTILITY PERCEPTIONS RICH PARTNER (A)

250.000,00 250.000,00 60.000,00 60.000,00

250.000,00 250.000,00 60.000,00 60.000,00

PROFIT DISTRIBUTION:
AUXILIARY CALCULATIONS:

Management utility 250.000,00

Legal Reserve 10% (25,000.00)
Profit to be distributed 225,000.00
Distribution to partners:

Silver Member 35% = 78,750.00

Alanes Partner 35% = 78,750.00
Rich Partner 30% = 67,500.00 225,000.00
TOTAL 0.00

But: Rich Partner received on account of profits: 60,000.00

Profit sharing 30% 67,500.00
Balance in favor to be received from profits 7,500.00

Accounting record:

DATE DESCRIPTION HAS TO TO HAVE

31/12/2019 Management utility 250.000,00
Legal Reserve 25.000,00
Silver member personal account 78.750,00
Alanes member personal account 78.750,00
7.500,00
Rico partner personal account
60.000,00
(Industrial)
Rich partner perceptions
Record for the distribution of profits
obtained as of 12/31/2019 in
Bs250,000.00, to the capitalist and
industrial partners according to the
proportion and percentages agreed in the
Constitution Statement,
TOTAL 250.000,00 250.000,00

LEGAL RESERVE PERSONAL ACCOUNT

SILVER MEMBER (P)

25.000,00 78.750,00

25.000,00 78.750,00

PERSONAL ACCOUNT PERSONAL ACCOUNT

ALANES PARTNER (P) RICH PARTNER (INDUSTRIAL) (P)

78.750,00 7.500,00

78.750,00 7.500,00
PRACTICAL EXERCISE No 7:

1) On 01/02/2019 , a company was established whose corporate name will be

“CORTEZ Y CIA” Collective Company . With contributions committed within
a period of 30 days where the commitment of contributions is as follows:

Cortez Partner Contribution Bs100,000.00

Chamizo Partner Contribution Bs100,000.00
Perez Partner Contribution Bs100,000.00

3) After 20 days, the partners make their committed contributions in the following
way:

 Partner Cortez 80% in cash and 20% transfers receivables with verbal
commitment.
 Chamizo partner 90% in merchandise (at cost) and 10% transfers credit
receivable with a bill of exchange.
 Perez partner 60% with motor vehicle, 20% furniture and 20% merchandise
(at cost)

4) At a later date, the credits are recovered in full in cash.

2) The Income Statement of “CORTEZ Y CIA” SC For the period ending

12/31/2019 , it shows a profit of Bs140,000.00 , therefore, the partners decide to
distribute the profits in proportion to the capital contributed:

 Taxes on Company Profits are provided for according to Law

 The legal reserve is created at 5%.
It is requested:
g) Opening balance
h) opening seat
i) Accounting entries
j) Ledger
La Paz, May 2020
PCQ.

Practical exercise No. 8

According to the articles of incorporation it is established that:

Partner Pérez: General Manager assigned salary 5,500.00

Silver Member: Administrative Manager assigned salary 5,000.00
Pardo Partner: Sales Manager assigned salary 4,800.00

At the end of 2019, the withdrawal of funds for salaries is as follows:

Partner Pérez: General Manager 66.000,00

Silver Member: Administrative Manager 66,000.00
Pardo Partner: Sales Manager 50,400.00
It is requested:
Accounting record.
Ledgers
PCQ/….
CAPITALIST PARTNERS AND INDUSTRIAL PARTNERS

Practical exercise No 9:

 The Pérez y Compañía SC company was established by the partners Pérez and Plata as
capitalist partners and the partner Pardo as industrial partner.
 The Brown Partner receives Bs4,000.00 monthly charged to results. Profits are applied at
35% for each capitalist partner and 30%. For the industrial partner.

Utility covers perceptions.

1) As of 12/31/2019 , the management profit after the IUE amounts to Bs210,000.00

2) The Pardo partner's perceptions account has a balance of Bs48,000.00
3) 5% legal reserve
It is requested:
a) Accounting entries with application of results.
b) Ledgers
PCQ/..