Partnership Accounting: Profit Sharing, Capital Accounts, Admission & Dissolution
Run the books of a three-partner firm from capital roll-forward to liquidation: ratio splits, salary and interest allowances with a deficit, admission by purchase, bonus and goodwill methods, a partner’s retirement and a wind-up with a capital deficiency, every cell checked as you go.
The first lesson is free — no account needed.
About this course
A partnership accounting course that runs the books of one fictional three-partner architecture firm, for accounting students and anyone preparing for intermediate or advanced accounting exams. You roll forward the partners' capital and drawing accounts, share profit and a loss by a fixed 5 : 3 : 2 ratio, split net income with salary allowances, interest on average capital and a remainder that turns negative, compare admitting a new partner by purchase of an interest with an investment under the bonus method, record the same admission with the goodwill method, price a retiring partner's buy-out above and below his capital balance, wind the firm up with a loss on realisation and a capital deficiency and finish with the journal entries and a capital chart. Textbook methods only, not legal or tax advice. The first lab is free.
Lessons
- Capital & Drawing Accounts: the Partners’ Equity Roll-ForwardFree
- Profit Sharing by a Fixed Ratio (5 : 3 : 2) Pro
- Salary Allowances, Interest on Capital & the Remainder (incl. a Deficit) Pro
- Admitting a Partner: Purchase of an Interest vs Investment (Bonus Method) Pro
- The Goodwill Method vs the Bonus Method Pro
- A Partner Retires: Paying More or Less than the Capital Balance Pro
- Liquidation: Loss on Realisation, a Capital Deficiency & Safe Payments Pro
- Capstone: Journal Entries for Admission & Liquidation + a Capital Chart Pro