A · Supplemental Illustration Center
Online-exclusive visual guides
1. What each kind of partner brings — and risks
| Partner type | Contributes | Capital credit? | Shares profits? | Liable to outsiders? |
|---|---|---|---|---|
| Capitalist | Money or property | Yes — net fair value of contribution | Yes, as agreed | Yes |
| Industrial | Industry — skill, labor, expertise | No capital credit (industry has no measurable fair value at formation) | Yes, as agreed | Yes — still liable to third persons |
| Capitalist-industrial | Both | Yes — for the property/money portion | Yes, as agreed | Yes |
2. Valuation ladder — what amount goes to the capital account?
Cash
Face amount. ₱100,000 cash = ₱100,000 credit.
Property
Agreed value; absent agreement, fair value at the date of contribution — never the partner's old cost or book value.
Property with a loan
If the partnership ASSUMES the liability, capital credit = fair value − liability assumed (the net contribution).
Industry
Memo entry only — no peso credit at formation.
Classic trap: a partner's delivery van "cost ₱800,000 three years ago" but is worth ₱500,000 today with a ₱120,000 loan the firm assumes. Capital credit = 500,000 − 120,000 = ₱380,000. The historical ₱800,000 is irrelevant.
3. Bonus on formation — moving slices, same pie
When partners agree on capital ratios that differ from what each actually contributed, the difference transfers BETWEEN capital accounts. Total capital never changes.
Contributed
Ana
₱400,000
Bea
₱200,000
Total
₱600,000
Agreed: equal capitals (50:50)
Ana
₱300,000 → gave a ₱100,000 bonus to Bea
Bea
₱300,000 → received the bonus
Total
still ₱600,000 — bonus method never creates assets
B · Interactive Workspaces
Practice tools
Tool 1 · Capital credit calculator
Value one partner's mixed contribution.
Tool 2 · Formation entry drill
Choose the correct journal entry for each new formation case.
C · Online-Exclusive Assessment