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    Accounting For Special Transactions

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    john carlo
    This document provides an overview of accounting for partnerships. It discusses key topics like partnership formation, valuation of partner contributions, accounting for initial investments, partnership ledger accounts, and bonuses on initial investments. The objectives are to differentiate partnership accounting from sole proprietorships and corporations, state valuation and initial accounting for partner investments, and identify partnership-specific accounts and transactions that affect them. Examples of partnership characteristics and considerations for partnership equity accounting are also provided.

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    Accounting For Special Transactions

    Uploaded by

    john carlo
    267 views11 pages
    This document provides an overview of accounting for partnerships. It discusses key topics like partnership formation, valuation of partner contributions, accounting for initial investments, partnership ledger accounts, and bonuses on initial investments. The objectives are to differentiate partnership accounting from sole proprietorships and corporations, state valuation and initial accounting for partner investments, and identify partnership-specific accounts and transactions that affect them. Examples of partnership characteristics and considerations for partnership equity accounting are also provided.

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    This document provides an overview of accounting for partnerships. It discusses key topics like partnership formation, valuation of partner contributions, accounting for initial investments, partnership ledger accounts, and bonuses on initial investments. The objectives are to differentiate partnership accounting from sole proprietorships and corporations, state valuation and initial accounting for partner investments, and identify partnership-specific accounts and transactions that affect them. Examples of partnership characteristics and considerations for partnership equity accounting are also provided.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    267 views11 pages

    Accounting For Special Transactions

    Uploaded by

    john carlo
    This document provides an overview of accounting for partnerships. It discusses key topics like partnership formation, valuation of partner contributions, accounting for initial investments, partnership ledger accounts, and bonuses on initial investments. The objectives are to differentiate partnership accounting from sole proprietorships and corporations, state valuation and initial accounting for partner investments, and identify partnership-specific accounts and transactions that affect them. Examples of partnership characteristics and considerations for partnership equity accounting are also provided.

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    © All Rights Reserved
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    You are on page 1of 11

    ACCOUNTING FOR SPECIAL

    TRANSACTIONS
    (Advanced Accounting 1)

    LECTURE AID

    2018

    ZEUS VERNON B. MILLAN


    Chapter 1 Partnership Formation
    Learning Objectives

    • Differentiate between the accounting for


    partnerships, sole proprietorships, and
    corporations.
    • State the valuation of contributions of
    partners.
    • Account for the initial investments of the
    partners to the partnership.
    • State the peculiar accounts used in a
    partnership and identify the transactions
    ACCOUNTING FOR SPECIAL
    that affect these accounts.TRANSACTIONS (Advanced
    Accounting 1) - (by: MILLAN)
    Partnership

    • A partnership is an unincorporated association of two or


    more individuals to carry on, as co-owners, a business,
    with the intention of dividing the profits among
    themselves.

    ACCOUNTING FOR SPECIAL


    TRANSACTIONS (Advanced
    Accounting 1) - (by: MILLAN)
    Characteristics of a partnership

    1. Ease of formation 
    2. Separate legal personality  
    3. Mutual agency
    4. Co-ownership of property
    5. Co-ownership of profits
    6. Limited life
    7. Transfer of ownership
    8. Unlimited liability (this is applicable to a general
    partnership)
    ACCOUNTING FOR SPECIAL
    TRANSACTIONS (Advanced
    Accounting 1) - (by: MILLAN)
    Accounting for partnerships

    • The following are the major considerations in the


    accounting for the equity of a partnership:
    1. Formation – accounting for initial investments to the
    partnership
    2. Operation – division of profits or losses
    3. Dissolution – admission of a new partner and withdrawal,
    retirement or death of a partner
    4. Liquidation – winding-up of affairs

    ACCOUNTING FOR SPECIAL


    TRANSACTIONS (Advanced
    Accounting 1) - (by: MILLAN)
    Valuation of contributions of partners

    • All assets contributed to (and related liabilities


    assumed by) the partnership shall be measured
    at fair value.

    ACCOUNTING FOR SPECIAL


    TRANSACTIONS (Advanced
    Accounting 1) - (by: MILLAN)
    Partners’ ledger accounts

    1. Capital accounts
    2. Drawing accounts
    3. Receivable from/ Payable to a partner

    ACCOUNTING FOR SPECIAL


    TRANSACTIONS (Advanced
    Accounting 1) - (by: MILLAN)
    Bonus on initial investments

    • A bonus exists when the capital account of a partner is


    credited for an amount greater than or less than the fair
    value of his contributions.
    • The bonus is treated as adjustment to the capital
    accounts of the other partners.

    ACCOUNTING FOR SPECIAL


    TRANSACTIONS (Advanced
    Accounting 1) - (by: MILLAN)
    APPLICATION OF CONCEPTS
     

    PROBLEM 2: FOR CLASSROOM DISCUSSION

    ACCOUNTING FOR SPECIAL TRANSACTIONS (Advanced Accounting 1) - (by:


    MILLAN)
    OPEN FORUM
    QUESTIONS????
    REACTIONS!!!!!

    ACCOUNTING FOR SPECIAL TRANSACTIONS (Advanced Accounting 1) - (by:


    MILLAN)
    END
    ACCOUNTING FOR SPECIAL TRANSACTIONS (Advanced Accounting 1) - (by:
    MILLAN)

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