Accounting for Partnership - Practice

Practice A/C for Partnership

Mini English Program
A business entity can be formed in several formats such as a sole
proprietorship – a small business with one owner, easy to form but with limitations
i.e. small capital, business expansion is difficult, lack of competent personnel.
These may cease the operation of the entity. Formation as partnership shall solve
the aforesaid problems. A partnership is larger than a sole proprietorship, having 2
investors or more called partners. The operation of a partnership shall comply with
relevant laws such as the Civil and Commercial Code, the Revenue Code, the
Accounting Act B.E.2543, and Thai Accounting Standards, etc.

MINI ENGLISH PROGRAM NAME………………………………………………………

BANGNA COMMERCIAL COLLEGE NICKNAME………………………………
NO……………………………..…..CLASS MEP
PHONE………………………………………..…………….

Practice Chapter 1

Job Sheet : General Characteristics of Partnership
Learning Objectives
1. Able to explain the definitions, kinds and essential characteristics of partnerships
2. Demonstrate 3 examples of entity formed as ordinary partnership
3. Demonstrate 3 examples of entity formed as limited partnership
4. Name nearby places for partnership registration and the original documents of forms and

attachments required
5. Demonstrate the flow chart of partnership registration

Materials
1. Report Forms
2. Stationeries

Precautions
1. Allow all group members to show their comment
2. Jointly consider and summarize the issues correctly

Procedures

Step 1. Divide all students into 5 groups. Students with even number divided into 3 groups, students
with odd number divided into 2 groups. Each group selects the group leader and secretary. Group
representatives draw lots of the following assignments

Assignment 1 Search and study about the definitions, kinds and essential characteristics of
partnerships
Assignment 2 Search for and demonstrate 3 examples of entity formed as ordinary partnership
Assignment 3 Search for and demonstrate 3 examples of entity formed as limited partnership
Assignment 4 Search for and name nearby places for partnership registration and the original
documents of forms and attachments required
Assignment 5 Search and study about the flow chart of the partnership registration

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Step 2. Each group calls for the working group, allocates duties and responsibilities. All group
members do the brain storming, study the assignment and search for additional information. The group
representative presents the project in class, time allowance for each group not more than 5 minutes.

Step 3. Each group makes the group appraisal and also appraise other groups using the individual
appraisal form.
Teacher evaluates each study group using these appraisal forms

 Presentation Skill Evaluation Form
 Team working Skill Evaluation Form
 Moral, value, and desirable attributes Evaluation Form

Evaluation

1. The individual appraisal form

Criteria Good Score higher than 2.70

Fair Score Between 1.30 – 2.70

To Improve Score lower than 1.30

Note score from the average of all appraisers’ scores

2. The presentation skill evaluation form

Criteria Good Score Between 15 – 18

Fair Score Between 12 - 14

To Improve Score Between 6 - 11

3. The team working skill evaluation form

Criteria Good Score Between 12 – 15

Fair Score Between 9 – 11

To Improve Score Between 5 - 8

4. The moral, value, and desirable attributes evaluation form

Criteria Fair Score Between 6 – 10

To Improve Score Between 1 - 5

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Chapter 1 Questions

Part 1 Mark X in front of the best correct choice

1. Which one is the definition of partnership?

a) Registered as ordinary partnership

b) Have not to be registered as partnership

c) The owners invest of assets or labor

d) With an objective of profit sharing, to be dissolved after completion of the undertaking

e) Two persons or more jointly invest of assets

2. Which one is correct?

a) A partnership must be registered

b) A partnership must not be registered

c) A partnership shall be registered or not

d) The laws do not rule out

e) c and d are correct

3. Into how many kinds can partnership be grouped?

a) 1 kind b) 2 kinds

b) 3 kinds d) 5 kinds

4. Which one is not described in the partnership agreement?

a) Penalties for breach of agreement

b) Location, objective and capital investment

c) Name of the partnership and names of the partners

d) Capital of all partners and profit and loss sharing

e) All are correct

5. Which one is the essential characteristics of registered ordinary partnership?

a) There are 2 types of partners

b) There are 3 or more partners

c) Operated with a view to sharing the profit

d) All partners be liable to the obligations of the partnership equal to the amount of investment

e) All are correct

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6. If the student form a limited partnership at Nontaburi province, where shall you request the

registration?
a) Office of business registration service, area 2
b) Office of business registration service, area 4
c) Office of business registration service, area 7
d) Section of central business registration
e) Town hall of the province
7. Which one is the item the limited liability partner cannot contribute as the investment?
a) Bank cheque
b) Services
c) Plant building
d) Intangible assets
e) None is correct
8. The last step of reserving the partnership’s name via internet is?
a) Choose ‘Search and reserve the name of the juristic person’
b) Choose ‘Register the reserving of juristic person’s name ’
c) The applicant receives the ‘username’ and ‘password’
d) Submit the information to the department of business development
e) The applicant print-out the result page of reserving the name to register
9. Step 2 of establishing a limited partnership is?
a) The partners enter into the agreement
b) Set the profit and loss sharing criteria
c) Search and reserve the limited partnership’s name
d) Prepare/fill the forms and attachments
e) None is correct
10. Which one is not the law related to partnership?
a) Orders
b) Accounting Act, B.E.2543
c) Notification of the Ministry of Commerce No. 83
d) Ministerial Regulations of the Ministry of Industry
e) All are correct

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Part 2 Answer these questions to the completeness

1. Explain the definition of partnership
2. How many kinds of partnerships are there? Name and explain

3. Explain the essential characteristics of registered ordinary partnership

4. Explain the essential characteristics of limited partnership

5. Separate 3 students per group for make the setting up partnership document.

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Part 3 Separate 3 Students per group for preparing document to setting up the
partnership

Stet 1 Separate group students
Step 2 Students discuss in the group about name’s partnership
Step 3 Thinking about partnership objective
Step 4 Thinking about logo’s partnership
Step 5 Download form from www.dbd.go.th

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Practice Chapter 2

Part 1 Fill in the correct word or sentence
1. Transactions relating to capital or partners’ equity are

2. Capital Interest means

3. Profit sharing of the partner means

4. Opening entries of a partnership can be of many cases, please say 2 examples

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5. Advance Account will be reported in the balance sheet under

6. A partner contributes of labor, how to record this transaction

7. Kai and Gung are partners, contribute thb 50,000 and thb 70,000 of cash respectively. What is the
capital ratio

8. A partner contributes of labor and with eligible of capital repayment. How to calculate the capital
ratio according to the law

9. Change from a sole proprietorship to a partnership. In case of opening new book of accounts,
the procedures are

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10. A partner contributes of assets. The value should be

Part 2 Mark X in front of the best correct choice
1. 1. A partner contributes of assets. The valuation should be

a) At cost
b) At salvage value
c) At book value
d) At buying price
e) At fair market value
2. Which transaction does not change the partners’ equity
a) Additional investments
b) Drawings for personal use
c) Buying more assets
d) Profit sharing
e) None
3. Tum contributed 20,000 Baht of cash, 10,000 Baht of office materials, and 2,000 Baht of account
payable. Toy contributed 20,000 Baht of cash, and 9,500 Baht of office equipment. What are the
capitals of Tum and Toy
a) 20,000 Baht and 21,000 Baht
b) 28,000 Baht and 29,500 Baht
c) 30,000 Baht and 21,000 Baht
d) 32,000 Baht and 29,500 Baht
e) 29,500 Baht and 30,000 Baht

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4. How to record the transaction when a partner contributed of labor?

a) Dr. Goodwill Cr. Capital – Partner

b) Dr. Wage Cr. Capital – Partner

c) Dr. Salary Cr. Capital – Partner

d) Dr. Bonus Cr. Capital – Partner

e) Dr. Labor Cr. Capital – Partner

5. The operation results in net profit, how to appropriate to the partners

a) Shared equally

b) Shared as set in the agreement

c) Shared by the capital ratio at the formation

d) a) and b) e) b) and c)

6. In case that the investment amount did not clearly stated. The law rules that the investment of all

partners are

a) Equal to capability

b) Equal to labor

c) Equal to goodwill

d) Are equal

e) None

7. “Advance to Partners” account is under which account section of the partnership

a) Assets

b) Liabilities

c) Revenues

d) Expenses

e) Partners’ Equity

8. On January 1, 2014 Nut and Bie formed a partnership to sell ready made clothes, the investment

are 200,000 Baht and 300,000 Baht of cash respectively. What were the opening entries in the

General Journal?

a) Dr. Cash 500,000

Cr. Partners’ Equity 500,000

b) Dr. Cash 500,000

Cr. Net Equity 500,000

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c) Dr. Cash 500,000

Cr. Capital – Bie - Nut 500,000

d) Dr. Cash 500,000

Cr . Capital - Nut 200,000

Cr .Capital - Bie 300,000

e) Dr. Assets 500,000

Cr. Partners’ Equity 500,000

Use these information to answer item 9 -10

Tangjai and Tumdee formed a partnership on March 1, 2014. Tangjai contributed 120,000 Baht of

cash, 80,000 Baht of office equipment. Tumdee contributed 180,000 Baht of cash, 120,000 Baht

of inventory and 50,000 Baht of account payable.

9. What was the capital of Tumdee

a) 250,000 Baht

b) 350,000 Baht

c) 450,000 Baht

d) 550,000 Baht

e) 600,000 Baht

10. What was the net partners’ equity of the partnership

a) 250,000 Baht

b) 350,000 Baht

c) 450,000 Baht

d) 550,000 Baht

e) 600,000 Baht

Accounting for Partnership Page 16

Part 3 Illustrate the solution

1. KK and JJ agreed to form an ordinary partnership named “K&J” on January 10, 25x1.
The investments are 100,000 Baht and 150,000 Baht of cash respectively.
Requirements 1. Calculate the capital ratio KK : JJ
2. Record the opening entries in the General Journal on January 10, 25x1

1.1 Calculate the capital ratio JJ
KK : 150,000

100,0001100,000 3
2

1.2 Record the opening entries in the General Journal on January 10, 25x1

General Journal Page…..…..
Credit
25x1 Transactions A/C Debit
MD No. 100,000 -
150,000 -
Jan 10 Cash 250,000 -
Capital’s KK
Capital’s JJ

KK and JJ contributed of cash

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2. Am, An, and Ae joined a partnership “AAA” on February 2, 25x1. Partners contributed of assets
as follow
- Am contributed 150,000 Baht of cash, 230,000 of office equipment
- An contributed of a car – with 560,000 Baht buying cost, and 320,000 Baht fair market value
- Ae contributed 140,000 Baht of cash, 75,000 Baht of office supplies, and 125,000 Baht of
office equipment
Requirements 1. Calculate capital ratio of all partners
2. Record the opening entries in the General Journal

1. Calculate capital ratio of all partners

Capital’s Am = 150,000 + 230,000 = 380,000 Baht

Capital’s An = 320,000 Baht

Capital’s Ae = 140,000 + 75,000 + 125,000 = 340,000 Baht

2. Record the opening entries in the General Journal

General Journal Page…..…..
Credit
25x4 Transactions A/C Debit
MD No. 380,000 -

Feb 10 Cash 150,000 -
Office Equipment 230,000 -
¤ Capital’s Am
Am take cash and other assets to investment

Car 320,000 -
Capital’s An
320,000 -
Am take car to investment

Cash 140,000 -
Office Supplies 75,000 -
Office Equipment 125,000 -

Capital’s Ae 340,0000 -
Ae take cash and other assets to investment

Accounting for Partnership Page 18

3. K, N, and J agreed to be partners. They contributed of assets as follow

- K contributed 140,000 Baht of cash, 60,000 Baht of office equipment

- N contributed of a car – not yet evaluated

- J contributed 110,000 Baht of cash, 120,000 Baht of fixtures

Requirements 1. Calculate the capital ratio of all partners

2. Record the opening entries in the General Journal

3. Prepare the Statement of financial position the Partnership at the formation

date

1. Calculate the capital ratio of all partners

Capital’s K = 140,000 + 60,000 = 200,000 Baht

Capital’s J = 110,000 + 120,000 = 230,000 Baht

N contributed of a car – not yet evaluated

Capital’s N = (200,000 + 230,000) / 2 = 215,000 Baht

General Journal Page…..…..
Credit
25x1 Transactions A/C Debit
MD No. 200,000 -
140,000 -
Feb 1 Cash 60,000 -

Office Equipment
¤ Capital’s K
K take cash and other assets to investment

Car 215,000 -
Capital’s N
215,000 -
K take car to investment

Cash 110,000 -
Decorations 120,000 -

Capital’s J 230,0000 -
J take cash and other assets to investment

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Prepare the Statement of financial position the Partnership at the formation date

KNJ Partnership

Statement of financial position

As at 1 February 25x1

Assets Liabilities & Equity

Cash 250,000 Capital’s K 200,000
215,000
Office Equipment 60,000 Capital’s N 230,000

Decorations 120,000 Capital’s J 645,000

Car 215,000

645,000

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4. Suda and Supa agreed to form a partnership on September 1, 25x1. Suda contributed 300,000
Baht of cash. Supa contributed 170,000 Baht of cash, and 70,000 Baht of labor which the
partners agreed that Supa is eligible for capital repayment.
Requirements Record the opening entries in the General Journal

General Journal Page…..…..
Credit
25x1 Transactions A/C Debit
MD No. 300,000 -
470,000 - 240,000 -
Feb 1 Cash 70,000 -
Goodwill
¤ Capital’s Suda
Capital’s Supa

Suda & Supa take cash and labor to investment

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5. Poom, Ploy, and Peaw agreed to form a partnership on October 1, 25x1. Poom contributed
200,000 Baht of cash, 50,000 Baht of office equipment. Ploy contributed of a car –with 430,000
Baht cost, and 250,000 Baht fair market value. Peaw contributed of labor, not eligible for capital
repayment

Requirement Record the opening entries in the General Journal

General Journal Page…..…..
Credit
25x4 Transactions A/C Debit
MD No. 250,000 -
200,000 - 250,000 -
Feb 1 Cash 50,000 -
Office Equipment 250,000 -
Car
¤ Capital’s Poom
Capital’s Ploy
Poom & Ploy take cash and labor to investment

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6. Prim and PunPun agreed to joined a partnership on January 1, 25x1. They contributed of assets
and liabilities as follow

Cash Prim PunPun
Office Materials 400,000 300,000
Fixtures - 52,000
Office Equipment 75,000 -
Building 100,000 -
Account Payable - 150,000
Loan 25,000 -
- 70,000

Requirements 1. Calculate the capital of the two partners
2. Calculate the capital ratio Prim : PunPun
3. Record the opening entries in the General Journal
4. Prepare the statement of financial position as at January 1, 25x1

1. Calculate the capital of the two partners
Capital’s Prim = 400,000 + 75,000 + 100,000 - 25,000
= 550,000
Capital’s PunPun = 300,000 + 52,000 + 158,000 - 158,000 - 70,000
= 440,000

2. Calculate the capital ratio Prim : PunPun

Capital’s Prim : Capital’s PunPun
550,000 : 440,000
55 : 44
5 :4

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3. Record the opening entries in the General Journal

General Journal Page…..…..
Credit
25x1 Transactions A/C Debit
MD No. 25,000 -
400,000 - 550,000 -
Jan 1 Cash 75,000 -
Decoration 100,000 -
Office Equipment
¤ Account Payable
Capital’s Prim
¤Prim take cash assets and debt to investment

Cash 300,000 -
Office Supplies 52,000 -
Building 158,000 -
¤ Loan Account
70,000 -
Capital’s PunPun 440,000 -
PunPun take cash assets and debt to
investment

4. Prepare the statement of financial position as at January 31, 25x1

PP Partnership

Statement of financial position

As at 31 January 25x1

Assets Liabilities & Equity

Current Assets Current Liabilities

Cash 700,000 Account Payable 25,000
70,000
Office Supplies 52,000 Non-Current Liabilities 95,000

Total Current Assets 752,000 Loan Account 990,000
1,085,000
Non - Current Assets Total Liabilities

Building 158,000 Equity

Office Equipment 100,000 Capital’s Prim 550,000

Decoration 75,000 Capital’s Punpun 440,000

Total Non - Current Assets 333,000 Total Equity

Total Assets 1,085,000 Total Liabilities & Equity

Accounting for Partnership Page 24

7. Oye, Aim, and Eed are partners. They contributed of assets and liabilities on January 1, 2014 as
follow

Oye Aim Eed
36,000 50,000
Cash 25,000 - -
- -
Account Receivable 6,000 94,000 -
3,700 -
Allowance for Doubtful Account 1,000 - 10,000
25,300 -
Car -

Car – Accumulate Depreciation -

Account Payable -

Loan -

Requirement Record the opening entries in the General Journal

General Journal Page…..…..
Credit
25x1 Transactions A/C Debit
MD No. 1,000 -
111,000 - 3,700 -
Jan 1 Cash 6,000 - 10,000 -
Account Receivable 94,000 - 25,300 -
30,000 -
Car 101,000 -
40,000 -
¤ Allowance for Doubtful Account
Accumulate Depreciation - Car

¤ Account Payable
Loan
Capital’s

Capital’s
Capital’s
¤Partnership contributed of assets and debt

To investment

Accounting for Partnership Page 25

Practice Chapter 3

Part 3 Show the solution

1. O, A, and E are partners. On January 1, 25x1 they contributed of assets and liabilities as

follow:

Oye Aim Eed

Cash 150,000 236,000 250,000

Account Receivable 13,000 - -

Allowance for Doubtful Account 1,000 - -

Car - 500,000 -

Accumulated Depreciation- Car - 52,700 -

Account Payable -- 30,000

Loan - 45,000 -

The three partners agreed to share the profit and loss at the ratios 30%, 40% and 30%
respectively. On December 31, 25x1 – the period ending date, the partnership has net profit for the year
of 252,000 Baht
Requirement Record the opening entries and profit sharing entries in the general journal

(the partnership use the fixed capital method)

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25x1 General Journal A/C Debit Page…..…..
MD Transactions No. Credit

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2. Jenphop and Sampan are partners, they have capitals of THB 80,000 and THB 100,000
respectively. On December 31, 2014 – the period ending date, the partnership has net profit
for the year of THB 18,000 and uses the alternate capital method to record the entries.

Requirements
1. Calculate the profit and loss sharing for each partner by:
1.1 Equally share
1.2 the capital ratio
1.3 the ratio of 3 : 2
2. Record the entries of profit sharing in the general journal

1.1 Equally share
Jenphop get profit sharing =
Sampan get profit sharing = 18,

1.2 The capital ratio
Jenphop : Sampan
80,000 : 100,000

Jenphop get profit sharing =
Sampan get profit sharing = 18,
= 10,000
1.3 The ratio of 3 : 2
Jenphop get profit sharing =
Sampan get profit sharing = 18,

,000 x 2/5 = 7,200

Accounting for Partnership Page 28

Year 2559 Transactions AC Debit Credit
MD
No. Baht St. Baht St.

Dec 31 Profit and Loss 18,000 -

Capital– Jenphop 9,000 -

Capital – Sampan 9,000 -

Separate profit by Equally share

Profit and Loss 18,000 -
Capital– Jenphop
Capital – Sampan 8,000 -
10,000 -
Separate profit by the capital ratio

Profit and Loss 18,000 -
Capital– Jenphop
Capital – Sampan 10,800 -
7,200 -
Separate profit by the ratio of 3 : 2

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3. Duangjai, Somjit and Reudee are partners and have the capital of THB 40,000 each. The
partners agreed to share the profit and loss at the ratio of 3 : 2 : 3. On December 31, 25x4
the partnership has net profit for the year of THB 160,000 and uses the fixed capital method

Requirements 1. Calculate the profit and loss sharing for all partners
2. Calculate the capital of partners
3. Record the entries of profit sharing in the general journal

3.1 Calculate the profit and loss sharing for all partners

Duangjai get profit sharing = 160,000 x 3/8 = 60,000
Somjit get profit sharing = 160,000 x 2/8 = 40,000
Reudee get profit sharing = 160,000 x 3/8 = 60,000

3.2 Calculate the capital of partners

Duangjai has capital = 40,000 + 60,000 = 100,000
= 80,000
Somjit has capital = 40,000 + 40,000 = 100,000

Reudee has capital = 40,000 + 60,000

3.3 Record the entries of profit sharing in the general journal

Year Transactions AC Debit Credit
MD
Dec 31 Profit and Loss No. Baht St. Baht St.
Current Capital– Duangjai
Current Capital– Somjit 160,000 -
Current Capital– Reudee
60,000 -
To record separate profit for partners
40,000 -

60,000 -

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4. Kai, Kook and Kaem are partners, having the capitals of THB 120,000, THB 100,000, and

THB 180,000 respectively. On December 31, 25x1 the partnership has net profit for the

year of THB 180,000
Requirements

4.1. Calculate the profit and loss sharing for each partner by:
4.1.1 Equally share
4.1.2 The capital ratio 6 : 5 : 9
4.1.3 The ratio of 1 : 1 : 2

4.2. Record the entries of profit sharing in the general journal (using the fixed capital
method)

4.1 Calculate the profit and loss sharing for each partner by:
4.1.1 Equally share

Kai get profit sharing = 180,000 / 3 = 60,000
Kook get profit sharing = 180,000 / 3 = 60,000
Kaem get profit sharing = 180,000 / 3 = 60,000

4.1.2 The capital ratio 6 : 5 : 9

Kai get profit sharing = 180,000 x 6/20 = 54,000
Kook get profit sharing = 180,000 x 5/20 = 45,000
Kaem get profit sharing = 180,000 x 9/20 = 81,000

4.1.3 The ratio of 1 : 1 : 2

Kai get profit sharing = 180,000 x 1/4 = 45,000
Kook get profit sharing = 180,000 x 1/4 = 45,000
Kaem get profit sharing = 180,000 x 2/4 = 90,000

Accounting for Partnership Page 31

4.2. Record the entries of profit sharing in the general journal (using the fixed capital method)

Year 25x1 Transactions AC Debit Credit
MD
No. Baht St. Baht St.

Dec 31 Profit and Loss 180,000 -

Current Capital– Kai 60,000 -

Current Capital– Kook 60,000 -

Current Capital– Kaem 60,000 -

To record profit sharing for partners

Dec 31 Profit and Loss 180,000 -
Current Capital– Kai
Current Capital– Kook 54,000 -
Current Capital– Kaem 45,000 -
81,000 -
To record profit sharing for partners

Dec 31 Profit and Loss 180,000 -
Current Capital– Kai
Current Capital– Kook 45,000 -
Current Capital– Kaem 45,000 -
90,000 -
To record profit sharing for partners

Accounting for Partnership Page 32

5. On January 1, 25x7 Siriam and Ann agreed to form Song Gler Partnership. The initial

investments are THB 20,000 and THB 30,000 of cash respectively. On December 31, 20x4

the partnership reports the net profit for the year of THB 362,000. The capital accounts of

all partners are:

Capital - Siriam

25x7 Transactions Dr. 25x7 Transactions Cr.
MD Baht st M D Baht st

Apr 1 Withdrawal J.1 20,000 - Jan 1 Beginning Balance / 90,000 -

Ending Balance 100,000 - Dec 1 Additional J.3 30,000 -

Investment

120,000 120,000

Capital - Ann

25x7 Dr. 25x7 Transactions Cr.
M D Transactions Baht st M D Baht st

Apr 1 Withdrawal J.3 15,000 - Jan 1 Beginning Balance / 60,000 -

Dec 1 Withdrawal J.3 10,000 - Mar 1 Additional J.3 20,000 -

Ending Balance 55,000 Investment

80,000 80,000

Requirements 1. Calculate the profit and loss sharing for each partner by:
1.1 The capital ratio at the formation date (Start business date)
1.2 The capital ratio at the opening date ( 1st Jan)
1.3 The capital ratio at the ending date ( 31st Dec)
1.4 The average capital ratio
2. Record the in the general journal using the fixed capital method

Accounting for Partnership Page 33

1.1 The capital ratio at the formation date

Ratio Siriam : Ann
20,000 : 30,000
Siriam get profit sharing :3
Ann get profit sharing 2 = 144,800
= 362,000 x 2/5 = 217,200
= 362,000 x 3/5

1.2 The capital ratio at the opening date

Ratio Siriam : Ann
90,000 : 60,000
Siriam get profit sharing :2
Ann get profit sharing 3 = 217,200
= 362,000 x 3/5 = 144,800
= 362,000 x 2/5

1.3 The capital ratio at the ending date

Ratio Siriam : Ann
100,000 : 55,000
Siriam get profit sharing : 11
Ann get profit sharing 20 = 233,548.39
= 362,000 x 20/31 = 128,451.61
= 362,000 x 11/31

Accounting for Partnership Page 34

1.4 The average capital ratio

Capital Period Balance Fixed capital Average Capital
months
Siriam 1 Jan. – 1 Apr 90,000 3 90,000 x 3 = 270,000
1 Apr – 1 Dec 70,000 8 70,000 x 8 = 560,000
1 Dec - 31 Dec 100,000 1 100,000 x 1 = 100,000
12
Ann 1 Jan – 1 Mar 60,000 2 930,000
1 Mar. – 1 Apr 80,000 1 60,000 x 2 = 120,000
1 Apr – 1 Dec 65,000 8 80,000 x 1 = 80,000
1 Dec – 31 Dec 55,000 1 65,000 x 8 = 520,000
12 55,000 x 1 = 55,000

775,000

Ratio Siriam : Ann
930,000 : 880,000
Siriam get profit sharing :
Ann get profit sharing 93 = 88
= 362,000 x 93/181 = 186,000
= 362,000 x 88/181 176,000

Accounting for Partnership Page 35

Year Transactions AC Debit Credit
MD
Dec 31 Profit and Loss No. Baht St. Baht St.
Current Capital–
Dec 31 Current Capital– -
-
To record profit sharing for partners
by capital ratio at the formation date -
Profit and Loss -

Current Capital–
Current Capital–

Dec 31 To record profit sharing for partners -
Dec 31 by capital ratio at the opening date -
Profit and Loss
-
Current Capital– -
Current Capital–
To record profit sharing for partners
by capital ratio at the ending date
Profit and Loss
Current Capital–
Current Capital–
To record profit sharing for partners
by capital ratio at the average capital ratio

Accounting for Partnership Page 36

6. On January 1, 25x4 Rattana and Naree joined as partners and formed the Nareer at

Partnership. They contributed THB 40,000 and THB 20,000 of cash respectively. On

December 31, 2014 the partnership reports the net profit for the year of THB 362,000. The

capital accounts of all partners are:

Capital - Rattana

25x4 Transaction AC. Dr. 25x4 Transaction Cr.
MD Baht St MD Baht St

Apr 1 Withdrawal J.2 6,000 - Jan 1 Beginning Balance / 80,000 -

Withdrawal J.3 10,000 - Apr 1 Additional Investment J.2 16,000 -

Ending Balance 100,000 Dec 1 Additional Investment J.3 20,000 -

116,000 116,000

Capital - Naree

25x4 Transaction Dr. 25x4 Transaction Cr.
MD Baht St M D Baht St
Oct 1 Withdrawal 60,000 -
Nov 1 Withdrawal J.2 8,000 - Jan 1 Beginning Balance / 24,000 -
Ending Balance J.3 J.1 10,000 -
6,000 - Mar 27 Additional Investment J.2 94,000

80,000 - Aug Additional Investment

94,000

Requirements 1. Calculate the profit and loss sharing for each partner by:
1.1 The capital ratio at the formation date
1.2 The capital ratio at the opening date
1.3 The capital ratio at the ending date
1.4 The average capital ratio
2. Record the in the general journal using the fixed capital method

Accounting for Partnership Page 37

1.1 The capital ratio at the formation date Rattana : Naree
Ratio :
:
Rattana get profit sharing = 85,680 x =
Ann get profit sharing = 85,680 x =

1.2 The capital ratio at the opening date Rattana : Naree
Ratio :
:
Rattana get profit sharing = 85,680 x =
Ann get profit sharing = 85,680 x =

1.3 The capital ratio at the ending date Rattana : Naree
Ratio :
:
Rattana get profit sharing = 85,680 x =
Ann get profit sharing = 85,680 x =

Accounting for Partnership Page 38

1.4 The average capital ratio

Capital Period Balance Fixed capital Average Capital
months
1 Jan – 1 Apr 80,000 3 80,000 x 3 = 240,000
1 Apr – 1 Oct 96,000 6 96,000 x 6 = 576,000
1 Oct – 1 Nov 90,000 1 90,000 x 1 = 90,000
1 Nov – 1 Dec 80,000 1 80,000 x 1 = 80,000
1 Dec – 31 Dec 100,000 1 100,000x 1 = 100,000
12 1,086,000
1 Jan – 1 Apr 60,000 3 60,000 x 3 = 180,000
1 Apr – 1 Sep 84,000 5 84,000 x 5 = 420,000
1 Sep – 1 Nov 94,000 2 94,000 x 2 = 188,000
1 Nov – 1 Dec 86,000 1 86,000 x 1 = 86,000
1 Dec – 31 Dec 80,000 1 80,000 x 1 = 80,000
12 954,000

Ratio 180,000 / 3 Rattana : 60,00 Naree

1,086,000 : 954,000

:

Rattana get profit sharing = 85,680 x =

Naree get profit sharing = 85,680 x =

Accounting for Partnership Page 39

7. Malee and Napa joined as partners with the initial investments of THB 40,000 and THB 60,000
respectively. At 25x7 ending date, the partnership has net profit for the year of THB 72,000. The
two partners agreed to provide interest on capital at 6% per annum for the capitals at the
formation date, the remaining profit and loss to be shared by the ratio 1 : 2

Requirements 1. Calculate the profit and loss sharing for each partner as agreed
2. Record the in the general journal (using the alternate capital method)

Interest on capital at 6% per annum Malee Napa Total
Remaining net profit shared equally 2,400 3,600 6,000
33,000 33,000 66,000
Total 35,400 36,600 72,000

General Journal Page…..…..

Y Transactions A/C Debit Credit
MD No.

Dec 31 Profit and Loss 303 72,000 -
Capital - Malee 304
Capital - Napa 305 35,400 -
36,600 -
Profit and loss sharing, with salary for

partners,
the remaining shared at 1 : 2

Accounting for Partnership Page 40

8. Golf and Mike joined as a partnership. The partnership agreement said that Golf and Mike
will have salary of THB 36,000 and THB 24,000 per annum respectively. The remaining
profit and loss to be shared by the ratio of 3 : 2. The partnership has net profit for the year
25x4 of THB 100,000

Requirements 1. Calculate the profit and loss sharing for each partner
2. Demonstrate the details of profit and loss allocation
3. Record the profit and loss entries in the general journal (using the fixed capital

method)

Salary for Partners Golf Mike Total
Remaining net profit shared at 3 : 2 36,000 24,000 60,000
24,000 16,000 40,000
Total 60,000 40,000 100,000

General Journal A/C Debit Page…..…..
No. Credit
Transactions
303
Dec 31 Profit and Loss 304
Current Capital- 305
Current Capital-

Profit and loss sharing, with salary for partners

Dec 31 Profit and Loss 303 40,000 -
Current Capital- 304
Current Capital- 305 24,000 -
16,000 -
Profit and loss sharing the remaining shared at
3:2

Accounting for Partnership Page 41

9. KookKai and PedPook are partners with the initial investments of THB 50,000 each. The agreed
to share the profit and loss as follow:
1. Salary for KookKai THB 12,000 and PedPook THB 15,000 per annum
2. Bonus for KookKai – the managing partner at 10% of the net profit
3. The remaining profit and loss to be equally shared

As of December 31, 2014 the partnership has net profit for the year of THB 80,000
Requirements 1. Calculate the profit and loss sharing for the two partners

2. Demonstrate the details of profit and loss allocation
3. Record the profit and loss entries in the general journal (using the fixed capital
method)

Salary for Partners KookKai PedPook Total
Bonus for manager 12,000 15,000 27,000
Remaining net profit shared at 1 : 1 8,000 - 8,000
22,500 22,500 45,000
Total 80,000

Accounting for Partnership Page 42

General Journal Page…..…..
Debit Credit
25x4 Transactions A/C
MD No. -
-
Dec 31 Profit and Loss -

Current Capital- -
Current Capital- -
Profit and loss sharing with salary for
-
partners, -
-
Dec 31 Profit and Loss
Current Capital-

Profit and loss sharing with bonus for
partners,

Dec 31 Profit and Loss
Current Capital-
Current Capital-

Profit and loss sharing for partners

Accounting for Partnership Page 43

10. SuKii and KayKai are partners. They contributed THB 120,000 and THB 180,000 of assets
respectively and agreed to share the profit and loss as follow:
1. Salary for SuKii THB 20,000 and KayKai THB 24,000
2. Interest on capital for partners at 8% per annum
3. Bonus for SuKii as the managing partner at 10% of net profit after salary and interest on capital
but prior to bonus
4. The remaining profit and loss to be shared by the ratio 40 : 60

After closing the books of 2013 the partnership had net profit for the year of THB 124,000

Requirements 1. Calculate the profit and loss sharing for each partner
2. Demonstrate the details of profit and loss allocation
3. Record the profit and loss entries in the general journal (using the fixed capital

method)

Calculate Bonus =B
B = 10% x (net profit –B)
B = 10/100 x (124,000 – 44,000 – 24,000)
B = 5,600

Salary for partners SuKii KayKai Total
Capital interest for partners 20,000 24,000 44,000
Bonus for partners 9,600 14,400 24,000
Remaining net profit shared is 40 : 60 5,600 5,600
20,160 30,240 50,400
Total 55,360 68,640 124,000

Accounting for Partnership Page 44

General Journal Page…..…..

MD Transactions A/C Debit Credit
No.

Dec 31 Profit and Loss 44,000 -

Current Capital- 20,000 -
Current Capital- 24,000 -
Profit and loss sharing with salary for

partners, 24,000 -
Dec 31 Profit and Loss

Current Capital- 9,600 -
Current Capital- 14,000 -

Profit and loss sharing with salary for 5,600 -
partners,
Dec 31 Profit and Loss

Current Capital- 5,600 -
Profit and loss sharing with bonus for
partners,

Dec 31 Profit and Loss 50,400 -
Current Capital-
Current Capital- 20,160 -
30,240 -
Profit and loss sharing for partners

Accounting for Partnership Page 45

11. SS, PP and JJ are partners. The net balance of their capital accounts as of the ending date are
THB 20,000, THB 40,000 and THB 60,000 respectively.

During the year there are draws for personal use as :
Drawing-SS THB 4,000,
Drawing-PP THB 6,000
Drawing-JJ THB 4,000.

At December 31, 25x3 – the ending date, the partnership had net profit for the year of THB
75,000. The partnership agreement on profit and loss sharing were:

1. Provide salary for SS THB 8,000, PP THB 8,000, and JJ THB 6,000
2. Provide interest on capital for partners at 8% per annum on the ending date capitals
3. Provide bonus for PP - the managing partner at 12% of net profit after salary and bonus and

interest on capital
4. The remaining profit and loss to be shared by the ratio 1 : 1 : 2

Requirements 1. Calculate the profit and loss sharing for each partner
2. Demonstrate the details of profit and loss allocation
3. Record the profit sharing entries and the closing draw accounts entries in the

general journal (using the alternate capital method)

1-1 Calculate the profit and loss sharing for each partner and demonstrate the details of profit and
loss allocation

List SS PP JJ Total
Salary for partners 8,000 8,000 6,000 22,000
Capital interest for partners 1,600 3,200 4,800 9,600
Bonus for partners 4,650 4,650
Remaining net profit shared is 1:1:2 - 9,687.50 - 38,750
9,687.50 25,537.50 19,375 75,000
Total 19,287.50 30,175

Accounting for Partnership Page 46

General Journal Page…..…..
Credit
25x3 Transactions A/C Debit
MD No. 22,000 - 8,000 -
8,000
Dec 31 Profit and Loss 4,000 -

Current Capital- SS
Current Capital-PP
Current Capital- JJ

Profit and loss sharing with salary for
partners,

Dec 31 Profit and Loss 9,600 -
Current Capital- SS
Current Capital- PP 1,600 -
Current Capital- JJ 3,200
4,800 -
Profit and loss sharing with interest for
partners,

Dec 31 Profit and Loss 4,650 -
Current Capital- PP
4,650 -
Profit and loss sharing with bonus for
manager

Dec 31 Profit and Loss 38,750 -
Current Capital- SS
Current Capital- PP 9,687 50
Current Capital- JJ 9,687 50
19,375 -
Profit and loss sharing for partners 1 : 1 : 2

Accounting for Partnership Page 47

Practice Chapter 4

1. PK Limited Partnership had the transactions and ending balances of the financial year 25x1 as

follow:

PP KK

Capital as at Jan 1, 25x1 50,000 50,000

Additional Investments 22,000 20,000

Withdraws 4,500 7,500

Profit Sharing 20,000 25,000

Requirement Prepare the statement of changes in partner’ capital for the year ended
December 31, 25x1

PK Limited Partnership

Statement of Changes in Partner’s Capital

For the year ended December 31, 25x1

PP KK Total
50,000 100,000
Capital as on Jan 1st , 25x1 50,000 20,000 42,000
25,000 45,000
Add Additional Investments 22,000 95,000 187,000
7,500 12,000
Profit Sharing 20,000 87,500 175,000

92,000

Less Draws 4,500

Capital as on Dec 31st ,25x1 87,500

Accounting for Partnership Page 48

2. DD Limited Partnership had the ending balances of the year 25x1 as follow:

Revenue from Sales 3,600,000 Baht

Cost of Goods Sold 2,200,000 Baht

Selling Expenses 126,000 Baht

Administrative Expenses 142,000 Baht

Interest Expense 40,000 Baht

The Income Tax rate was 20%

Requirement Prepare the income statement by function (multiple-step) for the year ended

December 31, 25x1

DD Limited Partnership
Income Statement

For the year ended December 31st ,25x1

Unit : Baht

Sales 126,000 3,600,000
Less Cost of Goods Sold 142,000 2,200,000
Gross profit 1,400,000
Less Selling Expenses
268,000
Administrative Expenses 1,132,000
Profit Before Finance Costs and Income Tax Expenses
Less Finance Costs (Interest Expenses) 40,000
Profit Before Income Tax Expense 1,092,000
Less Income Tax Expense 218,400
873,600
Net Profit

Accounting for Partnership Page 49