ACT 506 Module 6

Memorandum

TO: BGA Partnership

FROM: Student Name

DATE:

SUBJECT:  Partnerships Accounting

Partnerships are a critical business venture whose provisions allow for the collective pooling of resources, skills, and talents in the pursuit of profits. As a separate business entity, adopted accounting strategies have implications that affect all members of the partnership. State business regulations modeled after the Uniform Partnership Act of 1997 allow BGA Partnership to adopt new members. The critical nature of the distribution of new partner investment, net income or loss share, and share of ownership capital warrants the application of favorable accounting strategies. Three accounting methods are universal in accounting for new partners, within which BGA partners stand divided. The following are the three methods and the implicate effect on the partnership capital if applied.

Bonus Method

Bill stands supportive of the bonus method in calculating capital balances in admitting Newt to the BGA ...