Andy and Brad have been in partnershin since 01 January 2012. Andy made an initial capital investment of N$ 80 000 on 01 January 2012. He invests a further N$ 20 000 on 01 Apri: 2012. On 01 January 2012 Brad invested $160 000, N$ 10 000 of which he withdrew on 01 October 2012. The partnership agreement stipulates that each partner may draw N$ 1 000 as an advance on expected profits at the end of each month. (NB: such drawings have no influence on the profit for the period distribution- it is simply debited against the partners' current or withdrawal accounts;. The profit earned by the firm for the year ended 31 December 2012 amounts to N$ 60 000.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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