财务会计英语unit4 Owner’s Equity培训资料.ppt

Owner’s Equity;Contents;Section 1Partnership Accounting; Unlimited liability (无限责任) Co-ownership of property (财产共有) Participation in profits and losses (参与损益分配) ; Advantages and disadvantages of a partnership (合伙制的利弊) Advantages are that a partnership is easy to form, to change, and to dissolve. Also, a partnership facilitates the pooling of capital resources and individual talents. The disadvantages are that the life of a partnership is limited and that it is difficult for a partnership to raise large amount of capital. ;Distribution of partnership income and losses (合伙企业的损益分配) The major methods for partners to share income and losses are: a. Stated ratios (设定比例) Stated ratios are applied when all partners agree to give certain partners certain percentage or fraction of the total in sharing the income.; Example 4.7 Assume that LLCo. had a net income of $88,000 during the first month’s operation. Their partnership agreement stated that the percentage distributed to Ted and Colin should be 60%and 40%, respectively. The calculation was shown as follows: Lott ($88,000 ×60%) $52,800 Lambert ($88,000 ×40%) $35,200 $88,000; The closing entry to show the distribution was: 2007 Mar. 31 Income Summary 88000 Ted Lott, Capital 52800 Colin Lambert, Capital 35200; b. Capital balance ratios (资本额比例) If invested capital produces the most of income for the partnership, then capital balance ratios may be adopted, based on each partner’s beginning capital of the period or on the average capital balance during the year. ;Example 4.8 To illustrate how ratios based on beginning capital balances work, the calculation goes: (1) total partners’equity; (2) calculate each partner’s capital ratio; (3) then divide each partner’s income distribution by the ratio. Take LLCo. for exam