MGAB01H3 Lecture : Basic Partnership Accounting

89 views3 pages
10 Nov 2010
School
Course
Professor
azizs2026mac and 38565 others unlocked
MGAB01H3 Full Course Notes
16
MGAB01H3 Full Course Notes
Verified Note
16 documents

Document Summary

Initial investments are to be entered in the partnership records. These investments should be recorded at the fair market value of the assets at the date of their transfer to the partnership (no amortization should be included). However, investments of a/r should be recorded at full value, with the addition of doubtful accounts. The division of net income or loss is known as the income ratio. It is necessary to divide income and loss among the numerous capital accounts. Income ratios: fixed ratio (i. e. 2:1), ratio based on capital balances or average capital during the year, salaries and then a fixed ratio, interest and then fixed ratio, salariesinterest and then fixed ratio. Division of salaries or interest to partners are not expenses. Salaries, interest, and remainder in a fixed ratio: salaries and interest must be allocated before the remainder is divided according to the specified fixed ratio, even if these provisions exceed net income.

Get access

Grade+
$40 USD/m
Billed monthly
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
10 Verified Answers
Class+
$30 USD/m
Billed monthly
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
7 Verified Answers

Related Documents

Related Questions