APPROPRIATION ACCOUNT (FRA)

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Please can anyone help, I am totally stressed about my FRA exam although I have revised lods I seem to be really struggling.

Can anyone help with the appropriation of partnership accounts if the ratio changes half way through the year, how to calc the share of profits etc, I think I am having a memory block I have also forgotten how to calc ratio's.

The paper I am looking at is Dec 03 the details:

Profits: £89103
Profit share 2:1 until June 03
and then 1:1 from Jul 03

I really think this is going to come up the exam.

Any help would be much appreciated.

Thanks
Catx :cry:

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:APPROPRIATION ACCOUNT (FRA)

    Hi you have to first take away the salaries & interest on the capital accounts to get to the figure you have to share.
    the figure is £70,208.

    sept to june is 9 months
    70,208/12x9 = 52,656 to share for that period you then divide 52,656 by 3 which gives ali 35,104 which is 2/3 and tim 17,552 1/3.

    july to sept is 3 months the share of profit that is left is £17,552/2 which gives ali & tim 8,776 each, add the two figures up for ali 35,104 + 8,776 =43,880 which is her share of profit, tims is 17552 + 8776 = 26,328. 43,880 + 26,328 = 70,208 which makes the figure you had to share.

    Hope this makes sense.
    aly
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:APPROPRIATION ACCOUNT (FRA)

    Yes thanks alot thats great! :)

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