1. What is Partnership dissolution?

According to Article 1825, Civil Code of the Philippines, It is the change in relation of the partners caused by any partner ceasing to be associated in the carrying out of business. Simply, the termination of the life of an existing partnership 2. What are the causes of partnership dissolution? Admission of new partner Retirement or withdrawal of a partner Death, incapacity or insolvency of a partner Incorporation of a partnership 3. What alternative approaches can be used in recording the admission of a new partner? Explain. By purchase of interest from one or more of the old partners By investment or asset contributions to the partnership 4. When a partner sells his ownership interest in the firm, what rights are conveyed to the new partner? The transaction between the two are considered personal Any money or consideration exchanged is the property of the participants and not of the partnership Each of the partners capital is debited for the ownership claims that have been relinquished, and the new partners capital is credited with the capital equity. Assets, liabilities and capital remain unchanged 5. What do you mean by bonus in partnership dissolution? It is an amount partners are willing to give as additional credit to a partners capital in excess of his actual contribution. Transfer of capital from one partner to another 6. When agreed capital is not given, how will you compute for its value under bonus method? Determine the total capital of the new partnership by adding the new partners investment in the total capital of the old partnership Determine the partners capital credit by multiplying the total capital of the new partnership by the new partners ownership interest Determine the amount of bonus by subtracting the new partners capital credit from the new partners investment Allocate the bonus to the old partners on the basis of their income ratios 7. When is bonus applicable to the old partners? When a new partners capital credit on the date of his admittance is less than the new partners investment in the firm 8. When the capital contribution of a new partner is less than his capital credit, who will receive the bonus? Bonus to the old partners

9. When a partner retires from the partnership and receives an amount less than his capital balance, in what way should the partners share the excess payment? It will be distributed to the remaining partner in the partnership 10.When a partner withdraws from the partnership and receives an amount greater that his capital balance, how should the discrepancy be treated? It will be distributed to the remaining partners.