CPT Chapter Introduction to Partnership

CA CPT syllabus “Introduction to Partnership” explains the features of a partnership, its advantages over a sole proprietorship and the importance a Deed of Partnership. This chapter deals with the distribution of profits and the valuation of Goodwill of a partnership business. It also explains how with a change in the profit sharing ratio among partners accounting entries need to be passed to adjust Goodwill.

CA CPT Exam  

With Sheela Warrier.Duration:3hrs49min

Partnership :Introduction, PL Appropriation, PSR & Goodwill Duration (min:sec)
Introduction to Partnership  
{modal https://www.youtube.com/embed/Ss2yMuiRSIY?autoplay=1;rel=0|width=780|height=439|title=Introduction}Introduction{/modal} 02:51
{modal https://www.youtube.com/embed/sF9jL4SuQjs?autoplay=1;rel=0|width=780|height=439|title=Why & What is Partnership?}Why & What is Partnership?{/modal} 07:20
{modal https://www.youtube.com/embed/WzQSDms3xuE?autoplay=1;rel=0|width=780|height=439|title=Limited Liability Partnership (LLP)}Limited Liability Partnership (LLP){/modal} 02:42
{modal https://www.youtube.com/embed/DC9hgEkyq_Y?autoplay=1;rel=0|width=780|height=439|title=Partnership Deed}Partnership Deed{/modal} 05:07
{modal https://www.youtube.com/embed/rLK8H3pxJuM?autoplay=1;rel=0|width=780|height=439|title=In absence of agreement}In absence of agreement{/modal} 03:00
{modal https://www.youtube.com/embed/0WtHeEGR7Vc?autoplay=1;rel=0|width=780|height=439|title=Example}Example{/modal} 02:47
Profit Loss Appropriation A/c  
{modal https://www.youtube.com/embed/_Huslx7l4Fs?autoplay=1;rel=0|width=780|height=439|title=P&L Appropriation Account}P&L Appropriation Account{/modal} . 07:23
{modal https://www.youtube.com/embed/HQmqaB7mEis?autoplay=1;rel=0|width=780|height=439|title=Examples}Examples{/modal} 08:14
{modal https://www.youtube.com/embed/tvg7j6VeE6Q?autoplay=1;rel=0|width=780|height=439|title=Fixed & Fluctuating Capital}Fixed & Fluctuating Capital{/modal} 05:30
{modal https://www.youtube.com/embed/pWtW7fnR3ME?autoplay=1;rel=0|width=780|height=439|title=Interest on Capital}Interest on Capital{/modal} 07:41
{modal https://www.youtube.com/embed/MQXIvrAM1fI?autoplay=1;rel=0|width=780|height=439|title=Interest on Drawings}Interest on Drawings{/modal} 08:45
{modal https://www.youtube.com/embed/1rySfu8lxTM?autoplay=1;rel=0|width=780|height=439|title=Fixed amount withdrawn every month}Fixed amount withdrawn every month{/modal} 07:45
{modal https://www.youtube.com/embed/eS421ydkQDI?autoplay=1;rel=0|width=780|height=439|title=Example}Example{/modal} 02:03
{modal https://www.youtube.com/embed/uu96xZiPqRc?autoplay=1;rel=0|width=780|height=439|title=Guaranteed Min Profit}Guaranteed Min Profit{/modal} 04:06
{modal https://www.youtube.com/embed/cAsyTbIfURY?autoplay=1;rel=0|width=780|height=439|title=Example}Example{/modal} 03:54
{modal https://www.youtube.com/embed/F8zyX_OiW58?autoplay=1;rel=0|width=780|height=439|title=Quiz}Quiz{/modal} 26:28
Profit Sharing Ratio  
{modal https://www.youtube.com/embed/jeec7zyJJt0?autoplay=1;rel=0|width=780|height=439|title=PSR}PSR{/modal} 04:04
{modal https://www.youtube.com/embed/IElHRrJhdR8?autoplay=1;rel=0|width=780|height=439|title=PSR-change in ratio}PSR-change in ratio{/modal} 06:11
{modal https://www.youtube.com/embed/i8uTt3F4sjk?autoplay=1;rel=0|width=780|height=439|title=PSR-Admission}PSR-Admission{/modal} 11:29
{modal https://www.youtube.com/embed/yAW0z2N31KQ?autoplay=1;rel=0|width=780|height=439|title=PSR-Retirement}PSR-Retirement{/modal} 10:37
{modal https://www.youtube.com/embed/2MfknygZssE?autoplay=1;rel=0|width=780|height=439|title=Quiz}Quiz{/modal} 23:13
Goodwill  
{modal https://www.youtube.com/embed/dQPOnB8zDgY?autoplay=1;rel=0|width=780|height=439|title=What is Goodwill?}What is Goodwill?{/modal} 07:23
{modal https://www.youtube.com/embed/V4SR96u8ieQ?autoplay=1;rel=0|width=780|height=439|title=Valuation of Goodwill}Valuation of Goodwill{/modal} 02:12
{modal https://www.youtube.com/embed/LuAdIqMkJWk?autoplay=1;rel=0|width=780|height=439|title=Av Profit Method}Av Profit Method{/modal} 05:18
{modal https://www.youtube.com/embed/MG79Lt0VdSE?autoplay=1;rel=0|width=780|height=439|title=Wt. Av Profit Method}Wt. Av Profit Method{/modal} 04:03
{modal https://www.youtube.com/embed/-63TVn7or7U?autoplay=1;rel=0|width=780|height=439|title=Super Profit Method}Super Profit Method{/modal} 04:41
{modal https://www.youtube.com/embed/JHMmwGrfgcQ?autoplay=1;rel=0|width=780|height=439|title=Capitalisation Method}Capitalisation Method{/modal} 02:28
{modal https://www.youtube.com/embed/aWLzOlJI8x4?autoplay=1;rel=0|width=780|height=439|title=Annuity Method}Annuity Method{/modal} 10:13
{modal https://www.youtube.com/embed/GjvK8gTt2uM?autoplay=1;rel=0|width=780|height=439|title=Summary}Summary{/modal} 02:57
{modal https://www.youtube.com/embed/6ftXtZU3fNo?autoplay=1;rel=0|width=780|height=439|title=Accounting Entry}Accounting Entry{/modal} 14:28
{modal https://www.youtube.com/embed/quQQQvaPr3s?autoplay=1;rel=0|width=780|height=439|title=Quiz}Quiz{/modal} 07:31
{modal https://www.youtube.com/embed/sd5gnCyxSqY?autoplay=1;rel=0|width=780|height=439|title=Conclusion}Conclusion{/modal} 06:51
Total 3:49:15

Notes

Few things covered by us:

Partnership

What is partnership ? What is LLP ?
Partnership agreement
Profit & Loss Appropriation
Computation of interest on capital and drawings
Change in profit sharing ratio
Goodwill

Why Partnership?
Business Expansion
Pooling of resources

What is Partnership ?

It’s a relationship
Two or more persons
Share profits of a business
iv. Carried on by all or any of them acting for all.
Unlimited liability

Limited Liability Partnership

Both a partnership and a body corporate
Limited liability of partners
No liability for unauthorized acts of other partners
Taxed as a partnership

Partnership Deed

Registered Agreement
How much amount they will contribute?
Can they withdraw money?
Rate on Interest for Capital & Drawings
Salary?
Sharing of Profit?
Goodwill at change of constitution of firm
Dispute settlement
Audited Accounts

In the absence of an Agreement

No salary
No interest on capital
No interest on drawings
Interest @ 6% p.a. on loan
Profit sharing ratio - equal
Salary and interest on capital payable only if there is profit

Final Accounts for Partnership

Trading A/c
Profit & Loss A/c
Profit & Loss Appropriation A/c
Balance Sheet

Valuation of Goodwill

Four Methods:
Average Profits Method
Super Profits Method
Capitalisation Method
Annuity Method

Goodwill - Accounting Entries

At the time of Admission
At the time of Retirement
In case of change in Profit Sharing Ratio


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