PARTNERSHIP dissolution LUPISAN

CHAPTER III DISSOLUTION- CHANGES IN OWNERSHIP

1. DEFINITION 2. CAUSES OF DISSOLUTION 3. ADMISSION OF A PARTNER REPORTER: Jomari Cabardo

CAUSES OF DISSOLUTION: ,[object Object],[object Object],[object Object],[object Object]

ADMISSION OF A PARTNER ,[object Object],No one becomes a member of the partnership without the consent of all the members. This is because a partnership is based on mutual trust and confidence of the partners.

A person may become a partner in an existing partnership by either of the following: ,[object Object],[object Object],[object Object],[object Object]

Purchase of an Interest From Existing Partners By: Jennylou Enitorio

Pro-Forma Entry: ,[object Object],[object Object]

The purchase price of the interest sold to a new partner may be: ,[object Object],[object Object],[object Object]

Illustrative problem A: ,[object Object]

Case 1a: Purchase at book value from one partner only. ,[object Object],[object Object],[object Object],[object Object]

Case 1b: Purchase at book value from more than one partner. ,[object Object],[object Object],[object Object],[object Object],[object Object]

Case 2:Purchase at less than book value. ,[object Object],[object Object],[object Object],[object Object],[object Object]

Case 3: Purchase at more than book value. ,[object Object],[object Object],[object Object],[object Object],[object Object]

Asset Revaluation upon Admission of a New Partner by Purchase ,[object Object]

[object Object],[object Object],[object Object]

[object Object],[object Object]

[object Object],[object Object],[object Object],[object Object],[object Object]

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Investment of Assets in a Partnership By: Cecille Shyne Deseo

[object Object],Invests Contributes Total Assets Total Partner’s Equity

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Problems relating to Admission of a new Partner by Investment ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

The following are the illustrations of the various problems involving admission of a new partner by investment..

Case 1 – No Bonus, No Asset Revaluation ,[object Object],[object Object],ENTRY: Cash 100 000 Conde, Capital 100 000 Solution: Contributed Capital Agreed Capital Calma P 200,000 P200,000 Castro 100,000 100,000 Conde 100,000 100,000 TOTAL P 400, 000 P 400,000

Case 2 – Bonus to the old partners, no Asset revaluation ,[object Object],[object Object],ENTRY: Cash 100 000 Conde, Capital 100 000 Conde, Capital 20 000 Calma, Capital 10 000 Castro, Capital 10 000 Solution: Contributed Capital Agreed Capital Bonus Calma P 200, 000 P 210, 000 P 10, 000 Castro 100, 000 110, 000 10, 000 Conde 100, 000 80, 000 (20, 000) TOTAL P 400, 000 P 400, 000 ---

Case 3 – Bonus to new partner, no asset revaluation ,[object Object],[object Object],ENTRY: Cash 60 000 Calma, Capital 15 000 Castro, Capital 15 000 Conde, Capital 90 000 Solution: Contributed Capital Agreed Capital Bonus Calma P 200, 000 P 185, 000 (P 15, 000) Castro 100, 000 85, 000 (15, 000) Conde 60, 000 90, 000 30, 000 TOTAL P 360, 000 P 360, 000 ---

Case 4 – Positive Asset Revaluation, no Bonus ,[object Object],[object Object],ENTRIES: Other assets 100 000 Calma, Capital 50 000 Castro, Capital 50 000 Cash 100 000 Conde, Capital 100 000 Solution: Contributed Capital Agreed Capital Asset Revaluation Calma P 200, 000 P 250, 000 P 50, 000 Castro 100, 000 150, 000 50, 000 Conde 100, 000 100, 000 --- TOTAL P 400, 000 P 500, 000 P 100, 000

Case 5 – Negative Asset Revaluation, No Bonus ,[object Object],[object Object],ENTRIES: Calma, Capital 30 000 Castro, Capital 30 000 Other assets 60 000 Cash 60 000 Conde, Capital 60 000 Solution: Contributed Capital Agreed capital Asset Revaluation Calma P 200,000 P170, 000 (P 30,000) Castro 100,000 70, 000 (30, 000) Conde 60,000 60, 000 --- TOTAL P 360, 000 P 300, 000 (P 60, 000)

Positive Asset Revaluation Method (Ac > CC) & Negative Asset Revaluation Method (Ac < CC) ,[object Object],[object Object],[object Object],[object Object]

1. Bonus Method ENTRY: Cash 100 000 Conde, Capital 80 000 Calma, Capital 15 000 Castro, Capital 5 000 Solution: Contributed Capital Agreed Capital Bonus Calma P 200, 000 P 215, 000 P 15, 000 Castro 100, 000 105, 000 5,000 Conde 100, 000 80, 000 (20, 000) TOTAL P 400, 000 P 400, 000 ---

2. Positive Asset Revaluation Method ENTRIES: Other Assets 100 000 Calma, Capital 75 000 Castro, Capital 25 000 Cash 100 000 Conde, Capital 100 000 Solution: Contributed Capital Agreed Capital Asset revaluation Calma P 200, 000 P 275, 000 P 75, 000 Castro 100, 000 125, 000 25,000 Conde 100, 000 100, 000 --- TOTAL P 400, 000 P 500, 000 P 100, 000

1. Bonus Method ENTRY: Cash 80 000 Calma, Capital 11 250 Castro, Capital 3 750 Conde, Capital 95 000 Solution: Contributed Capital Agreed Capital Bonus Calma P 200, 000 P 188, 750 (P 11, 250) Castro 100, 000 96, 250 (3, 750) Conde 80, 000 95, 000 15, 000 TOTAL P 380, 000 P 380, 000 ---

2. Negative Asset Revaluation Method ENTRIES: Calma, Capital 45 000 Castro, Capital 15 000 Other Assets 60 000 Cash 80 000 Conde, Capital 80 000 Solution: Contributed Capital Agreed Capital Asset revaluation Calma P 200, 000 P155, 000 (P 45, 000) Castro 100, 000 85 , 000 (15,000) Conde 80, 000 80, 000 --- TOTAL P 380, 000 P 320, 000 (P 60, 000)

Withdrawal and Retirement of a Partner

[object Object],[object Object],[object Object],[object Object]

SALE OF INTEREST TO CONTINUING PARTNERS ,[object Object]

SALE OF INTEREST TO THE PARTNERSHIP ,[object Object],[object Object],[object Object],[object Object]

ACCOUNTING PROBLEMS INVOLVED IN THE RETIREMENT OF A PARTNER ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

CALCULATION OF RETIRING PARTNER’S INTEREST ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

[object Object],Diaz Dy David Capital balance, Dec. 31,2009 P 60,000 P 20,000 P 40,000 Share in profit from Jan. 1 – June 30 24,000 24,000 12,000 Withdrawals ( 2,000 ) ( 4,000 ) ( 6,000 ) P 82,0000 P 40,000 P 46,000

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

[object Object],Asset Revaluation Dy, Capital David, Capital Balances after retirement of Diaz under the bonus method P 38,000 P 45,000 Balances after retirement of Diaz under the asset revaluation method P 7,500 P 43,000 P 47,500 Depreciation on asset revaluation (divided equally) ( 7,500 ) ( 3,750 ) ( 3,750 ) Balances after depreciation P 39,250 P 43,750 Net advantage (disadvantage) of using the bonus method ( P 1,250 ) P 1,250

CHANGE IN CAPITAL STRUCTURE BY DEATH OR INCAPACITY OF A PARTNER ,[object Object]

PARTNERSHIP dissolution LUPISAN

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