--I LOVE YOU ALL-The Story of
“Walang Forever”
One day, a two friends- AL and DUB because of their
enthusiasm and eagerness, formed a partnership named
ALDUB Forever Partnership on February 14, 2019. They
dreamed of having a business that will integrate their
expertise in consultancy services. Through the motivation
and effort of AL, he organize to establish right away the
partnership and after process the requirements to SEC.
Fortunately-the SEC granted the permit. One of their vision
is to engage in consulting services that will be one of the
best firm offering consulting services within the vicinity of
Koronadal City. Among their contributions at the start of the
operation includes the following:
AL
DUB
Cash
P250,000
P380,000
Computer Equipment(net) 180,000
Inventory
100,000
Building
500,000
Delivery Van
950,000
As agreed, Al’s computer equipment was revalued at
P160,000 and inventory to P 150,000 while Dub mortgage
loan balance of P250,000 for his delivery van was assume by
the partnership. The partner has agreed on terms of profit
and loss sharing of equal distribution. All income and
expenses must be form in cash.
At the end of the year because of in-demand consulting
services and satisfying performance shone by the partner,
they reported a profit of P400,000. The partnership
agreements in dividing the profits are as follows:
a. AL will be allowed to an annual salary of P100,000
while DUB, P150,000.
b. Both are allowed to a 15% interest on their
beginning capital balances.
c. Any remainder, divided equally.
The partners AL and Dub were happy and overwhelm with
outcome of their effort in operating the business
throughout the year. Because of the good results, they were
talking about the possibilities of admitting a new partner in
order to make the business grow better and have a bigger
capitalization for the business partnership.
On Jan. 1, 2016, they admit Nation and change the
partnership name into ALDUB NATION partnership with an
investment of P200,000 for a 20% interest in the
partnership. At the end of year 2016, the partnership
reported P 500,000 income and agreed to divide it using
their new respective profit or loss ratio.
Again, because of the excellent performance of the
operations they dissolve the partnership and change the
name to ALDUB NATION FOREVER because of the admission
of a new partner, Forever, by purchasing 1/4 interest of
each partner for P 400,000. Before Forever enter into the
partnership, the partners agreed to some adjustment on the
books of partnership:
 Computer equipment is over-depreciated by P
10,000
 Inventory should was over-valued by P12,000.
Early this year, Dub was getting suspicious about Forever
and Al getting personal relationship with each other. And
she thinks that it might affect her investment to the
partnership. Throughout the week, she thinks of an idea on
how to confront DUB and Forever.
Dub utterly say at the conference table, together with the
partner, one day in a serious meeting.
“I’m sick and tired of this situation!” exclaimed by Dub “and
I can’t get rid of the idea having you, AL…” pointed at AL
“personal relationship with Forever”.
“What is this all about??”Worried question of Nation.
“I don’t want my investment to struggle in this business”.
stated Dub “I want to pool out my money and property”.
“Wait, wait…what are you gonna do??!!” Al said
exaggeratedly.
“I can’t permit you to do that!!” yelled by Forever.
“You can’t do nothing against it!.. it’s my investment and I
have the right to do it my own” stubbornly said by Dub.
“If you want to get out, I want it too!” Nation concluded “it
will be useless if we continue this business with a great
misapprehension with each other and having Al and Forever
a relationship that is construed to be true and yet you’re not
telling it to us as your business partners, right??! .”
On the same date, due to partner’s incompatible differences
with each other and could not settle their differences, they
decided to wind up and liquidate their interest in the
partnership.
 ½ of Non Cash Assets were realized at a loss of
P300,000during the 1st realization and;
 P100,000 loss was incurred on the remaining noncash assets during the 2nd realizations.
The business try to settle down any liabilities and in the
event that there is an assets remain to the partnership, they
will distribute it base on the result of the positive capital
balance.
At the end of the year, the ALDUB FOREVER NATION
Partnership were totally terminated. They will become part
of the history of the business that we will never forget.
“WALANG FOREVER…”
-Prepare necessary journal entries for each transactions
(Use Non Cash Asset Account representing non cash
assets).