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TO PRODUCE A FULL SET OF ACCOUNTS AND FINANCIAL REPORTS FOR PARTNERSHIPS FROM ... Close resource records to acknowledgment (incorporate gathered deterioration and ...
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Slide 1

6 PARTNERSHIPS LEARNING OUTCOME: TO PRODUCE A FULL SET OF ACCOUNTS AND FINANCIAL REPORTS FOR PARTNERSHIPS FROM FORMATION TO DISSOLUTION  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

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KEY TERMS dynamic accomplice capital records capital modification account current record disintegration account (acknowledgment account) settled capital record Garner versus Murray administering indebtedness  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

Slide 3

KEY TERMS enthusiasm on capital enthusiasm on drawings credit and advances Partnership Act organization understanding association stores benefit and misfortune appointment account benefit conveyance account  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

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KEY TERMS benefit sharing proportions acknowledgment account acknowledgment costs held benefits resting accomplice  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

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FORMATION OF A PARTNERSHIP Defined in the Partnership Act as the relationship between two or more individuals taking part in business for benefit  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

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FORMATION OF A PARTNERSHIP Three imperative components must be available in an organization: accomplices must be carrying on a business, not one confined business exchange must be assention between two or all the more legitimately capable individuals who must be the business co-proprietors accomplices must have aim to make a benefit  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

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FORMATION OF A PARTNERSHIP Partnerships are independent bookkeeping substances to the accomplices Owner\'s value records are kept for every individual accomplice Each accomplice has the privilege to partake in the benefits and deal with the business  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

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PARTNERSHIP AGREEMENT Partnership understanding doesn\'t generally exist, making it hard to build up if organization exists no formal association assention – Partnership Act applies key since organizations: have boundless risk have a constrained life passing of accomplice indebtedness of accomplice retirement of accomplice  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

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name of business points of interest of every accomplice nature of business division of benefit and misfortunes capital commitments power, rights and obligations of accomplices subtle elements of pay rates bookkeeping strategies drawings and loan fees enthusiasm for capital commitment voting and basic leadership methods confirmation of new accomplices determination of debate chapter 11, demise or retirement of accomplices PARTNERSHIP AGREEMENT  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

Slide 10

PARTNERSHIP ACT If there is no association understanding in composing, or on the off chance that it doesn\'t cover a territory of question, matters might be determined by reference to the Partnership Act e.g. Act expresses all benefits and misfortunes are to be shared similarly, so if benefit proportion is not characterized in an understanding, the Act is connected  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

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ADVANTAGES OF PARTNERSHIP Creation and disintegration is less demanding than an organization Minimal statutory regulations Resources can be pooled Expertise can be used Co-responsibility for Duties and obligations are shared  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

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DISADVANTAGES OF PARTNERSHIP Liability is boundless Partnership may stop if an accomplice passes on, resigns or gets to be bankrupt Disagreements between the accomplices can happen Limits to raising a lot of capital Partners can be sued by leaser, mutually or separately Partners are liable to pay higher pay charge  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

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PARTNERSHIP ACCOUNTS CURRENT ACCOUNTS working records containing subtle elements of benefit, misfortune, drawings and enthusiasm on capital contributed or on drawings CAPITAL ACCOUNTS accomplice\'s unique capital put into the business is thought to be "settled" capital record of every accomplice is normally unaltered  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

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PARTNERSHIP ACCOUNTS CREATION OF NEW PARTNERSHIP - ACCOUNTING ENTRIES Can be made in two ways the presentation of money just, entered in the money receipts diary the presentation of money and different resources and liabilities; general sections are raised for these passages  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

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ACCOUNTING FOR NEW PARTNERSHIP FORMATION Illustration 6D (page 144)  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

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PROFIT DISTRIBUTION PROFIT-SHARING RATIOS Profits and misfortunes are partaken in the way accomplices feel most proper Profit offer can be resolved in different ways: Amounts are shared on the premise of the commitment of altered capital of every accomplice Amounts are shared on the commitment of capital parity of every accomplice Higher benefit may go to an accomplice bringing something of specific worth into the business, for example, specific skill  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

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PROFIT DISTRIBUTION PROFIT AND LOSS APPROPRIATION ACCOUNT Net benefit or misfortune exchanged to this record from the benefit and misfortune record May be balanced for premium paid or earned on advances Net benefit is gotten by general diary section and is dispensed to the accomplices at the concurred proportion  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

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PROFIT AND LOSS APPROPRIATION ACCOUNT Illustration 6F (page 147)  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

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SUMMARY PROFIT AND LOSS APPROPRIATION ACCOUNT CURRENT ACCOUNTS  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

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PROFIT DISTRIBUTION ALLOCATION AS PER PARTNERSHIP AGREEMENT Interest on capital might be payable Interest might be charged for drawings taken out of the business There might be a procurement for the installment of a pay of a specific accomplice Interest might be payable on advances to accomplices by the business or advances by accomplices to the business  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

Slide 21

PROFIT DISTRIBUTION LOAN ACCOUNTS Where an accomplice makes advance to business, the charge is to money at bank and the credit to advance record in that accomplice\'s name DRAWINGS Where an accomplice pulls back trade from the business out reckoning of benefits earned, the present record is charged and money is credited  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

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ADMISSION OF NEW PARTNER REASONS FOR A NEW PARTNER New items and clients to business Specialized ability to association Access to further capital Desirable resources New business contacts Requirement because of death, retirement or chapter 11 of existing accomplice  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

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ADMISSION OF NEW PARTNER NEW PARTNERSHIP AGREEMENT ADJUSTING THE EXISTING BUSINESS All current accomplices must concede to the confirmation of another accomplice Assets of the business ought to be revalued before another accomplice is conceded Liabilities should be checked on for precision in valuation Gains and misfortunes to existing accomplices from new business quality will be made at the current benefit sharing proportion  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

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ADMISSION OF NEW PARTNER RETIREMENT OF PARTNER Retiring accomplice must pull out in composing and place ad expressing that she or he has pulled back from the association  2003 McGraw-Hill Australia Pty Ltd, PPTs t/an Applications for Financial Accounting by David Willis, slides arranged by Kaye Watson

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STEPS TO ADMIT NEW PARTNER Review estimation of benefits Consider incorporation of goodwill Record changes as a rule diary Open capital alteration account and enter increments or declines Calculate benefit or misfortune on modification and exchange to accomplices\' capital record Prepare opening general diary for new accomplice Calculate accomplices\' new benefit sharing proportion Prepare another Statement of Financial Position  2003 McGraw-Hill Austr

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