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partnership, not expenses - Coggle Diagram

- - - - profit
      - loss
    - - profit
      - loss
        
        what if partner is an capital-industrialist partner
  - - - original capital balance
      - beg capital balance
      - ending capital balance
    - - simple average
      - peso month method
    - - based on capital balances
        
        what if there is net loss
    - - based on net income before salaries, interest and bonus
      - based on net income before salaries and interest but after deduction of bonus
        
        bonus is treated as expense
      - net income after salaries, interest but before bonus
      - net income after salaries, interest and bonus
  - - - intangible asset- not recorded
      - if kept on cash basis- (consider accruals and deferrals)
      - tangible assets (book value vs. fv)
    - - adjust all assets and liab
        
        record unrecorded assets and liab
        
        adjustments are made to the capital accounts according to old p&l ratio plus record asset or liab
      - net adjustments of all (even unrecorded assets and liab) 2. (old p&l- new P&L ) * net adjustment 3. apply change by increase or decrease by recording capital
    - - steps
        
        compute share of each partner using the ratio when error occurred
        
        difference of actual share received vs. #2
        
        adjust partner's capital in an amount = #3
        
        determine correct income of prior period
- - - - purchase of all or part of interest of existing partners
        
        no change in partnership asset
        
        no cash or asset inflow
        
        decrease capital of selling partner
    - - increase assets of partnership
        
        steps
        
        record investment or CC
        
        determine AC (Total AC * % new partner )
        
        record bonus or revaluation
        
        Bonus (TAC=TCC)
        
        Asset revaluation (TAC not equal to TCC)