Partnership Methods

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Application Rules

Bonus Approach -recording of capital contribution entry when
share is different from capital contributed
Full Investment Approach -recording of capital contribution entry at
exactly the amounts of each partner’s capital
investment
Bonus Method -same as Bonus Approach, used to determine
the partner’s share in the total agreed capital
-(dr) total contributions of
partners, (cr) partners capital
at their agreed interest share
ratio
-(dr) total contributions of
partners, (cr) partners capital
at their actual amounts
contributed

Net Investment Method -same as Full Investment Approach, used to

determine the partner’s share in the total
agreed capital

Peso Month Method -used in profit (loss) distribution using the -multiply beginning capital
average capital ratio by the number of months it
remained unchanged to get
the “peso months”
>multiply each continuing
balances (incease/decrease)
to get the “peso months”
>add all “peso months”
derived and divide it by 12 to
get the average capital
>another way is to directly
multiply the balances to
months divided by 12 (n/12)
the results when added is
the average capital