Part I: Basic Concepts on Partnership
1. If you are to establish a business, what form of business organization would you take? What type of
business operation would you like to have? Why?
2. Assuming you are to form a business partnership, what will be the qualities that you will look for in a
business partner? Why?
3. Assuming you are to form a partnership with the person who possesses the qualities you have
mentioned above, what kind of partnership would you like to have if your partnership will be classified
as to: a.
Purpose? b. Liability? c.
Duration? d. Manner of creation? Explain your choices.
4. In a partnership that you have established, what type of a partner would you like to be if you will be
classified as partner as to:
a.
Liability?
b. Type of contribution?
c.
Public Knowledge?
d. Connection with the Partnership?
e. Extent of Participation in the Business?
f.
Power of Management?
g.
Nature of Managerial Work? Explain your choices.
B. Partnership Formation
Refer to your book and answer Quiz No. 3 on page 321 and Quiz No. 4 on page 323
C. Partnership Operation
Bel and May has capital accounts for 2019 as follows: For Bel For May Jan 1 Beginning Balance 500,000
Jan 1 Beginning Balance 600,000 Feb 28 Investment 300,000 Apr 3 Withdrawal 200,000 May 4
Withdrawal 100,000 Sep 21 Investment 200,000 Jul 18 Investment 600,000 Nov 8 Investment 200,000
Their original or initial investment to the partnership are as follows: Bel 100,000 May 200,000 The net
income for 2019 is P2,700,000. Determine the:
(1) share of each partner in the net income under the following independent cases and
(2) the ending capital balances after the share in the net income by filling up the tables given on the next
worksheet.
Case 1: Net income is divided in the ratio 2:3
Case 2: No agreement was set as to net income distribution.
Case 3: Net income is divided on the basis of beginning capital balance
Case 4: Net income is divided on the basis of ending capital balance
Case 5: Net income is divided on the basis of weighted average capital balances
Case 6: Net income is divided by providing P20,000 monthly salary to Bel, the remainder to be divided in
the ratio of 4:6
Case 7: Net income is divided by providing 12% interest on beginning capital balances, the remainder to
be divided equally.
Case 8: Net income is divided by providing P10,000 monthly salary each to Bel and May, 20% bonus on
net income before deducting salary and bonus will be given to May, and the balance to be divided in the
ratio of 1:3.
Case 9: Net income is divided by providing 12% interest on original capital balances, 20% bonus on net
income after deducting interest and bonus will be given to May. and the balance to be divided equally.
Case 10: Net income is divided by providing P10,000 monthly salary each to Bel and May, 12% interest
on beginning capital balances, and a bonus to May equal to 20% of net income after deducting salary,
interest and bonus; the balance is to be divided in the ratio of 3:2.