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SAN BEDA COLLEGE

ACC2A Partnership and Corporation Accounting


Under the supervision of Mr. Jephte O. Muñez, CPA, MBA,
MSF

SEMESTRAL PAPER

Part 1 Partnership

You and your friends have decided to organize a partnership


for the business you intend to put. Prepare the following:

1. Articles of Co-Partnership

Determine the following:

1.1 Partnership name, purpose and location;


1.2 Names, citizenship and residences of the partners;
1.3 Date of formation and duration of the partnership
(not less than two years)
1.4 The capital contribution of each partner, the
procedure for valuing non-cash investments,
treatment of excess contribution (as capital or as
loan) and the penalties for a partner’s failure to
invest and maintain the agreed capital;
1.5 Rights and duties of each partner;
1.6 The accounting period to be adopted, the nature
of accounting records, financial statements and
audits by independent certified public
accountant(s);
1.7 The method of sharing net income or net loss,
frequency of income measurement and
distribution, including any provisions for the
recognition of differences in contributions;
1.8 The drawings or salaries to be allowed to partners;
1.9 The provision for arbitration of disputes,
dissolution and liquidation.

2. Prepare the income statement of your company for the


first year with the following assumptions:

2.1 First year of operation will commence on January


1, 2011;
2.2 Net Income should not be lower than P 1,000,000
as minimum level of profitability;
2.3 Accounts based on the attached listing (NOTE:
Please refer to Annex A for possible accounts to be
used for your prospective business. Use the
accounts whenever applicable);
2.4 Salaries, interest and bonus will be provided.
(NOTE: You will decide upon the salary rate,
interest rate and bonus rate as provided in the
Articles of Co-Partnership)

SAN BEDA COLLEGE


ACC2A Partnership and Corporation Accounting
Under the supervision of Mr. Jephte O. Muñez, CPA, MBA,
MSF

3. Make an assumption if a new partner will be accepted.


3.1 Admission of a new partner by purchase
3.2 Admission of a new partner by investment

Provide the necessary accounting entries to record the


admission of a new partner.

Part 2 Corporation

You and your friends have decided to put up a corporation


instead of a partnership. Prepare the following:

1. Articles of Incorporation

Determine the following:

1.1 The name of the corporation;


1.2 The specific purpose or purposes for which the
corporation is formed;
1.3 The principal place of business which must be
within the Philippines;
1.4 The term of existence;
1.5 The names, nationalities and residences of the
incorporators;
1.6 The number of directors or trustees, which shall
not be less than five (5) nor more than fifteen
(15);
1.7 The names, nationalities and residences of the
persons who shall act as directors or trustees until
the first regular directors or trustees are elected
and qualified;
1.8 For a stock corporation:
1.8.1 Amount of authorized capital stock in pesos
1.8.2 Number of shares into which it is divided;
1.8.3 In case, the shares are par value shares:
• The par value of each share;
• The names, nationalities and
residences of the original subscribers;
• The amount subscribed and paid by
each subscriber on his subscription.

SAN BEDA COLLEGE


ACC2A Partnership and Corporation Accounting
Under the supervision of Mr. Jephte O. Muñez, CPA, MBA,
MSF

2. By-Laws

2.1 The time, place and manner of calling and


conducting regular or special meetings of the
directors or trustees;
2.2 The time and manner of calling and conducting
regular or special meetings of the stockholders or
members;
2.3 The required quorum in meetings of stockholders
or members and the manner of voting therein;
2.4 The form for proxies of stockholders and members
and manner of voting them;
2.5 The qualifications, duties and compensation of
directors or trustees and the mode or manner of
giving notice thereof;
2.6 The time of holding the annual election of
directors or trustees and the mode or manner of
giving notice thereof;
2.7 The manner of election or appointment and the
term of office of all officers other than directors or
trustees;
2.8 The penalties for violations of the by-laws;
2.9 In the case of stock corporations, the manner of
issuing stock certificates; and
2.10 Such other matters as may be necessary for the
proper or convenient transaction of its corporate
business and affairs.

3. Design your company’s stock certificate


4. Provide accounting entries to record the initial
investments of the incorporators using the journal entry
method.
5. Prepare the balance sheet as of date of corporate
formation.
6. Based on the first year of operation income statement
prepared in Part 1, provide assumptions as to dividends
to be paid. Correspondingly prepare the Statement of
Retained Earnings and Statement of Changes in
Shareholders’ Equity as of 31 December 2011.

INSTRUCTIONS:

1. Do your research from the Securities and Exchange


Commission, Philippine Stock Exchange or any other sources
(library or online sources). Cite your sources accordingly
based on APA Style in manuscript preparation.
2. Use A4 paper
3. Use Times New Roman for the font
4. Font size: 12
5. Pagination should be indicated at the upper right hand corner
of each page.

SAN BEDA COLLEGE


ACC2A Partnership and Corporation Accounting
Under the supervision of Mr. Jephte O. Muñez, CPA, MBA,
MSF

6. Collate your semestral paper as follows:

a. Cover Page – Name of your Company (as Partnership


and as Corporation)
b. Table of Contents
c. Table of Illustration (if any)
d. Table of Maps (if any)
e. Acknowledgement (optional)
f. Part 1 - Partnership
f.1 Articles of Co-Partnership
f.2 Income Statement and Balance Sheet
f.3 Change in Ownership
g. Part 2 – Corporation
g.1 Articles of Incorporation
g.2 By-Laws
g.3 Stock Certificate
g.4 Accounting Entries upon Corporate Formation
g.5 Balance Sheet as of Date of Corporate Formation
g.6 Statement of Retained Earnings and Statement
of Changes in Shareholders’ Equity as of December
31, 2011
h. References
i. Appendices
j. Curriculum Vitae of each group member
k. Groupmate’s Participation Report – specify the
contribution of each group member. Rating Matrix
will be provided in a separate email.

DEADLINE: on or before October 15, 2010

APPENDIX A SUMMARY OF ACCOUNTS TO BE USED FOR THE


INCOME STATEMENT

• Schedule of Cost of Sales – Merchandising / Trading

Merchandise / Finished Goods Inventory, Beginning

Add: Purchases (net of purchase discounts, purchase returns and


allowances)

Total Goods Available for Sale

Less: Merchandise / Finished Goods Inventory, End

Cost of Sales

SAN BEDA COLLEGE


ACC2A Partnership and Corporation Accounting
Under the supervision of Mr. Jephte O. Muñez, CPA, MBA,
MSF

• Schedule of Cost of Sales (Service)

Direct Charges – Salaries, Wages and Benefits

Direct Charges – Materials, Supplies and Facilities

Direct Charges – Depreciation

Direct Charges – Rental

Direct Charges – Outside Services

Direct Charges – Others

Total Cost of Services (Sum of all Direct Charges)

• Itemized Deductions

Salaries and Allowances


Fringe Benefit

SSS, GSIS, Medicare, HDMF and other Contributions

Commission

Outside Services

Advertising and Promotions

Rental

Insurance

Royalties

Repairs and Maintenance

Representation and Entertainment

Transportation and Travel

Fuel and Oil

Communication

SAN BEDA COLLEGE


ACC2A Partnership and Corporation Accounting
Under the supervision of Mr. Jephte O. Muñez, CPA, MBA,
MSF

Light and Water

Supplies

Interest

Taxes and Licenses

Losses

Bad Debts

Depreciation

Amortization of Intangibles
Depletion

Charitable Contribution

Research and Development

Amortization of Pension Trust Contribution

Miscellaneous

Total Allowable Expenses

jomunez 09.16.2010