CPT Chapter Partnership : Admission, Death and Retirement

CA CPT syllabus “Partnership : Admission, Death and Retirement” deals with accounting entries at the time of admission, retirement or death of a partner.  It deals with the revaluation of assets and liabilities, change in profit sharing ratio,  treatment of goodwill, distribution of accumulated profits and losses, settlement of dues to partners etc.

CA CPT Exam  

With Sheela Warrier.Duration:5hrs09min

Partnership :Admission,Retirement & Death Duration (min:sec)
Admission of Partner  
{modal https://www.youtube.com/embed/Xtf2YJ0hdRA?autoplay=1;rel=0|width=780|height=439|title=Introduction }Introduction {/modal} 01:22
{modal https://www.youtube.com/embed/vKCeiWRnOro?autoplay=1;rel=0|width=780|height=439|title=Effect on Admission}Effect on Admission{/modal} 07:09
{modal https://www.youtube.com/embed/fZSspnQGEsE?autoplay=1;rel=0|width=780|height=439|title=Change in PSR}Change in PSR{/modal} 15:27
{modal https://www.youtube.com/embed/SPSa89f4E1Y?autoplay=1;rel=0|width=780|height=439|title=Why Existing Partners are compensated}Why Existing Partners are compensated{/modal} 10:47
{modal https://www.youtube.com/embed/O4tdGqcmxbc?autoplay=1;rel=0|width=780|height=439|title=Goodwill at Admission}Goodwill at Admission{/modal} 08:49
{modal https://www.youtube.com/embed/YQ0gFe8dIPU?autoplay=1;rel=0|width=780|height=439|title=Goodwill Premium}Goodwill Premium{/modal} 11:40
{modal https://www.youtube.com/embed/zP76DF7eovM?autoplay=1;rel=0|width=780|height=439|title=Goodwill Premium Retained in Business}Goodwill Premium Retained in Business{/modal} 08:15
{modal https://www.youtube.com/embed/-bleYQtq-Yw?autoplay=1;rel=0|width=780|height=439|title=Goodwill Premium Withdrawn by Partners}Goodwill Premium Withdrawn by Partners{/modal} 02:05
{modal https://www.youtube.com/embed/jGJYQDC7MN8?autoplay=1;rel=0|width=780|height=439|title=Goodwill Premium not brought by new Partners}Goodwill Premium not brought by new Partners{/modal} 02:20
{modal https://www.youtube.com/embed/Qg-6h2eclYU?autoplay=1;rel=0|width=780|height=439|title=Example 1 Goodwill}Example 1 Goodwill{/modal} 07:22
{modal https://www.youtube.com/embed/B7i73lsEtpI?autoplay=1;rel=0|width=780|height=439|title=Example Goodwill}Example Goodwill{/modal} 09:17
{modal https://www.youtube.com/embed/0SgoITmmbfo?autoplay=1;rel=0|width=780|height=439|title=Hidden Goodwill}Hidden Goodwill{/modal} 04:20
{modal https://www.youtube.com/embed/0dL3PxCsW5A?autoplay=1;rel=0|width=780|height=439|title=Quiz}Quiz{/modal} 11:21
{modal https://www.youtube.com/embed/hJVHfbXuVpI?autoplay=1;rel=0|width=780|height=439|title=Revaluation of Assets & Liabilities}Revaluation of Assets & Liabilities{/modal} 08:40
{modal https://www.youtube.com/embed/7_zG_K4eIjQ?autoplay=1;rel=0|width=780|height=439|title=Accounting Entry}Accounting Entry{/modal} /td> 02:07
{modal https://www.youtube.com/embed/07qzjMdHOWk?autoplay=1;rel=0|width=780|height=439|title=Revaluation Account Example}Revaluation Account Example{/modal} 07:08
{modal https://www.youtube.com/embed/MA_SY7SV63Q?autoplay=1;rel=0|width=780|height=439|title=Memorandum Revaluation A/c}Memorandum Revaluation A/c{/modal} 08:46
{modal https://www.youtube.com/embed/-QPjLkvqa_w?autoplay=1;rel=0|width=780|height=439|title=No Revaluation A/c}No Revaluation A/c{/modal} 01:52
{modal https://www.youtube.com/embed/oFl0Sem0Fs4?autoplay=1;rel=0|width=780|height=439|title=Accumulated Profit}Accumulated Profit{/modal} 02:35
{modal https://www.youtube.com/embed/OAQR5ahbX4o?autoplay=1;rel=0|width=780|height=439|title=Example}Example{/modal} 10:10
{modal https://www.youtube.com/embed/akI2o8sHB8k?autoplay=1;rel=0|width=780|height=439|title=Quiz}Quiz{/modal} 05:40
Retirement of a Partner  
{modal https://www.youtube.com/embed/n6hX2-vQRtA?autoplay=1;rel=0|width=780|height=439|title=Introduction}Introduction{/modal} 08:06
{modal https://www.youtube.com/embed/-1wfT2qlVQ4?autoplay=1;rel=0|width=780|height=439|title=Gaining Ratio}Gaining Ratio{/modal} 03:50
{modal https://www.youtube.com/embed/kSEZngKnUgg?autoplay=1;rel=0|width=780|height=439|title=Goodwill}Goodwill{/modal} 04:39
{modal https://www.youtube.com/embed/yc-MmVIDi3s?autoplay=1;rel=0|width=780|height=439|title=Revaluation Account Example}Revaluation Account Example{/modal} 07:03
{modal https://www.youtube.com/embed/kCBN56yzCf4?autoplay=1;rel=0|width=780|height=439|title=Memorandum Revaluation A/c}Memorandum Revaluation A/c{/modal} 08:34
{modal https://www.youtube.com/embed/RDdxPsjDR5A?autoplay=1;rel=0|width=780|height=439|title=No Revaluation A/c}No Revaluation A/c{/modal} 01:30
{modal https://www.youtube.com/embed/Q37SZXGBGDM?autoplay=1;rel=0|width=780|height=439|title=Accumulated Profit}Accumulated Profit{/modal} 05:30
{modal https://www.youtube.com/embed/zQkDS9BvztE?autoplay=1;rel=0|width=780|height=439|title=Life Policies}Life Policies{/modal} 07:09
{modal https://www.youtube.com/embed/Zyen4KBllgY?autoplay=1;rel=0|width=780|height=439|title=Joint Life Policies Method 1}Joint Life Policies Method 1{/modal} 06:26
{modal https://www.youtube.com/embed/WrqrZsfG3CA?autoplay=1;rel=0|width=780|height=439|title=Joint Life Policies Method 2}Joint Life Policies Method 2{/modal} 06:49
{modal https://www.youtube.com/embed/gkLetW1xGAI?autoplay=1;rel=0|width=780|height=439|title=Joint Life Policies Method 3}Joint Life Policies Method 3{/modal} 11:47
{modal https://www.youtube.com/embed/9uvUGb3U-Xo?autoplay=1;rel=0|width=780|height=439|title=Summary of JLP}Summary of JLP{/modal} 05:56
{modal https://www.youtube.com/embed/egZGSQHXQng?autoplay=1;rel=0|width=780|height=439|title=Single Life Policy}Single Life Policy{/modal} 02:20
{modal https://www.youtube.com/embed/wGPIGAQSx6c?autoplay=1;rel=0|width=780|height=439|title=Final Settlement}Final Settlement{/modal} 05:42
{modal https://www.youtube.com/embed/hNcBYOiU7Yo?autoplay=1;rel=0|width=780|height=439|title=Examples}Examples{/modal} 10:43
{modal https://www.youtube.com/embed/sCcys5MJj1w?autoplay=1;rel=0|width=780|height=439|title=Quiz}Quiz{/modal} 12:21
Death of a Partner  
{modal https://www.youtube.com/embed/yv4XA7OGJCM?autoplay=1;rel=0|width=780|height=439|title=Introduction}Introduction{/modal} 04:34
{modal https://www.youtube.com/embed/fjWatTQ8MMk?autoplay=1;rel=0|width=780|height=439|title=Example}Example{/modal} 01:14
{modal https://www.youtube.com/embed/yXpi0y8sZvI?autoplay=1;rel=0|width=780|height=439|title=Joint Life Policy}Joint Life Policy{/modal} 04:40
{modal https://www.youtube.com/embed/HsJQMA4-jzo?autoplay=1;rel=0|width=780|height=439|title=Example}Example{/modal} 05:33
{modal https://www.youtube.com/embed/A9GSfzB-k3o?autoplay=1;rel=0|width=780|height=439|title=Quiz}Quiz{/modal} 06:28
{modal https://www.youtube.com/embed/MrA7XVeI4v8?autoplay=1;rel=0|width=780|height=439|title=Final Quiz}Final Quiz{/modal} 07:04
{modal https://www.youtube.com/embed/nc5P4gIsVps?autoplay=1;rel=0|width=780|height=439|title=Additional Questions}Additional Questions{/modal} 12:55
{modal https://www.youtube.com/embed/dtIPG5yEXg4?autoplay=1;rel=0|width=780|height=439|title=Conclusion}Conclusion{/modal} 10:41
Total 5:08:46

Notes

Few things covered by us:

Adjustments to be made

New & Sacrificing Ratio
Share of Goodwill
Revaluation of Assets and Liabilities
Accumulated Profits and Losses

Goodwill

Purchased Goodwill
Inherently generated Goodwill
Goodwill premium paid by new partner
Treatment of GW premium

Goodwill Premium

What is Goodwill Premium ?
If full value exists in Balance Sheet
If Goodwill is undervalued in Balance Sheet
If Goodwill is overvalued in Balance Sheet

Goodwill Premium

Maybe paid privately to the old partners
Maybe retained in the business
Maybe withdrawn by the old partners
Premium may not be brought in by the new partner

Revaluation of Assets and Liabilities

Revaluation Account
or
Profit and Loss Adjustment
Transfer profit / loss to old partners accounts
Memorandum Revaluation Account
Without Revaluation account

Retirement of Partner

Adjustments to be made
Gaining Ratio
Share of Goodwill
Revaluation of Assets and Liabilities
Accumulated Profits and Losses
Joint Life Policy
Final Payment

Revaluation of Assets and Liabilities

Revaluation Account
or
Profit and Loss Adjustment
Transfer profit / loss to all partners accounts
Memorandum Revaluation Account
Without Revaluation account

Life Policy

Joint Life Policy
Single Life Policy
Objective
Premium, Surrender value, Maturity
Accounting Treatment - 3 methods

Single Life Policies

Transfer premiums to Profit and Loss a/c
Retiring Partner’s policy is surrendered
Retiring Partner is entitled to share SV of all policies.

Final Settlement

Balance in Capital a/c
Share of Reserves
Share of Goodwill
Revaluation Profit/Loss
Share in Life Policy

Death of Partner

Adjustments to be made

Gaining Ratio
Share of Goodwill
Revaluation of Assets and Liabilities
Accumulated Profits and Losses
Profit in CY up to date of death
Joint Life Policy
Final Payment


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