Partnership Dissolution
Partnership Dissolution
Admission of a
new partner
Retirement of a
partner
Withdrawal of a
partner
Death of a
partner
Incapacity of a
partner
Bankruptcy of a
partner
Incorporation of
a partner
Admission A new partner, with the consent of all the
of a new partners, may be admitted in an existing
partnership. Upon admission of a new
partner partner, the firm is automatically dissolved,
and a new partnership is formed.
AC CC
₱
Old 300,000.00
₱
New 100,000.00
₱ ₱
400,000.00 400,000.00
Illustrative Problem : Calma and Castro are partners
with capital balances of P200,000 and P100,000
respectively. They share profit and losses equally.
Conde is to be admitted in the partnershop
Case 3 – Bonus to **Conde invest P60,000 for a 1/4 interest in the total
the new partners, capitalization of P360,000
no asset
Cash P 60,000
revaluation Calma, Capital 15,000
Castro, Capital 15,000
Conde, Capital P 90,000
AC CC Bonus
₱ ₱ -₱
Old 270,000.00 300,000.00 30,000.00
₱ ₱ ₱
New 90,000.00 60,000.00 30,000.00
₱ ₱
360,000.00 360,000.00 ₱ -
Illustrative Problem : Calma and Castro are partners
with capital balances of P200,000 and P100,000
respectively. They share profit and losses equally.
Conde is to be admitted in the partnershop
Cash P 100,000
Conde, Capital P 100,000
AC CC A.Reval
₱ ₱ ₱
Old 400,000.00 300,000.00 100,000.00
₱ ₱
New 100,000.00 100,000.00 ₱ -
₱ ₱ ₱
500,000.00 400,000.00 100,000.00
Illustrative Problem : Calma and Castro are partners
with capital balances of P200,000 and P100,000
respectively. They share profit and losses equally.
Conde is to be admitted in the partnership
Cash P 60,000
Conde, Capital P 60,000
AC CC A.Reval
₱ ₱ -₱
Old 240,000.00 300,000.00 60,000.00
₱ ₱
New 60,000.00 60,000.00 ₱ -
₱ ₱ -₱
300,000.00 360,000.00 60,000.00
Change in The partnership may allow any of its partners
capital to withdraw or retire from the firm. The
business may continue after withdrawals; on
structure the other hand, the interest of the retiring or
withdrawing partner may be:
by • Sold to a new partner (outsider)
withdrawal • Sold to the continuing (remaining) partners
, • Sold to the partnership
incapacity Investments
of a - Withdrawals
+ Share in the partnership profit to date of retirement or
partner - Share in the partnership losses to date of retirement
+ Loans and advances to the partnership or
- Loans and advances to the partnership
+ Revaluation of assets increasing their recorded values
or
- Revaluation of assets decreasing their recorded values
Interest upon Retirement
The statement of financial position of the partnership of Dy,
David and Diaz on December 31, 2020 follows: