Click & AskCPT 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.
With Sheela Warrier.Duration:3hrs49min
| Partnership :Introduction, PL Appropriation, PSR & Goodwill | Duration (min:sec) |
| Introduction to Partnership | |
| Introduction | 02:51 |
| Why & What is Partnership? | 07:20 |
| Limited Liability Partnership (LLP) | 02:42 |
| Partnership Deed | 05:07 |
| In absence of agreement | 03:00 |
| Example | 02:47 |
| Profit Loss Appropriation A/c | |
| P&L Appropriation Account . | 07:23 |
| Examples | 08:14 |
| Fixed & Fluctuating Capital | 05:30 |
| Interest on Capital | 07:41 |
| Interest on Drawings | 08:45 |
| Fixed amount withdrawn every month | 07:45 |
| Example | 02:03 |
| Guaranteed Min Profit | 04:06 |
| Example | 03:54 |
| Quiz | 26:28 |
| Profit Sharing Ratio | |
| PSR | 04:04 |
| PSR-change in ratio | 06:11 |
| PSR-Admission | 11:29 |
| PSR-Retirement | 10:37 |
| Quiz | 23:13 |
| Goodwill | |
| What is Goodwill? | 07:23 |
| Valuation of Goodwill | 02:12 |
| Av Profit Method | 05:18 |
| Wt. Av Profit Method | 04:03 |
| Super Profit Method | 04:41 |
| Capitalisation Method | 02:28 |
| Annuity Method | 10:13 |
| Summary | 02:57 |
| Accounting Entry | 14:28 |
| Quiz | 07:31 |
| Conclusion | 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
CPT Exam Exposure
Partnership Admission-Retierment-Death
Sale of Goods on Approval or Return Basis
Show you appreciate by sharing!