Appropriation Account exam question

System
System Posts: 100,534 πŸ€– Admin πŸ€–
edited 10:32AM in AAT student discussion
Hi, we all seemed to struggle on this yesterday. I knew how to do it but kept thinking was the introduction of Goodwill half way through the year a trick as we've only ever done it at the end of the year. I assume the capital changes in light of the goodwill, by the time I'd finished I must have reworked it 5 times as one of my figures doesn't come to a round number. Just wonder how many marks you would lose as you could lose heavily on the Capital account, then again on the appropriation account if you haven't got the right capital figures. What should the figures have been? Can anyone shed any light?

Comments

  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:Appropriation Account exam question

    my profit share between the 2 original partners came out to a .50 answer :?
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:Appropriation Account exam question

    I just hope we get marks for method aswell, but I'm not even sure I did that right! I did it how we were taught from the book but the wording threw me a bit on this one, it is the area our lecturer covered only briefly at the end of the year :cry:
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:Appropriation Account exam question

    Capital will change in light of goodwill because you introduce it to the existing partners the day before the introduction of the new partner. Then once the new partner is in the goodwill needs to be eliminated at the new profit share ratio which increases the capital for the first 2 partners but decreases the capital for the new partner.

    You'll lose a mark if you didn't account for goodwill properly but this doesn't affect any more marks as they carry your figures forward so fingers crossed you should be ok :D
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:Appropriation Account exam question

    what net profit did you use? i think i had 122200, and i think the figures were all full numbers.
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:Appropriation Account exam question

    I got the same net profit!
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:Appropriation Account exam question

    I had an answer ending in .50 as well! I rounded though? :?
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:Appropriation Account exam question

    i had that net proft too
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:Appropriation Account exam question

    I had the same for Net Profit and my appropriation account ended in .50 for the two original partners.
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:Appropriation Account exam question

    perhaps i rounded my answers then. i feel so much better knowing other people got the same answers as me. i can't normally do these papers.
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:Appropriation Account exam question

    I reckon that was the right net profit, needless to say I didn't get that as I forgot to add in the vehicle depreciation, then and I can't believe I did this, I multiplied by .6 instead of 0.06, what the hell was I thinking, this means 2.4 is completely wrong and half of the appropriation account. How will they mark it do you think, I mean I knew how to do the account but I've done it all with the wrong figures, the more I think back now the more I'm convinced I will have failed and I feel so mad with myself as I did part one really well. I will have lost marks on the P&L account and on the appropriation account although I did change the capital figures they will still be wrong because of the .6 and I did Pat's salary wrong because I misunderstood what they had said and divided it by the 3 months - what was I thinking. I think I did alright on the costing paper and section one of the FRA so just feel really down now. If they take own figures I will have got the current account right and the goodwill account but wonder how many marks you can lose for 2.4 and 2.5 and still pass.

    I will be making a complaint to my college however as half my class had to sit the exam in the hall which is above the creche - screaming kids for half the exam, and the people next to us were sitting a different exam shich finished earlier and they were allowed to get up and go whenever they wanted, so we had that all afternoon too. The other half of our class got to sit their exam in a classroom with proper desks and no distractions!

    Went to work today where they nitpicked on some account I hadn't done properly - because I hadn't been shown how! and thought what is the bloody point!
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:Appropriation Account exam question

    I had that Net Profit as well. Cant remember half the questions now tho.
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:Appropriation Account exam question

    Catja. i wouln't worry yourself too much. my teacher said if you make an error in your calculations they mark it as wrong the once and then take the figure you got to determine if the rest of your answers are right. so as long as you did the appropriation account right, it won't matter that you used the wrong figures.
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:Appropriation Account exam question

    I changed my net profit in the last 5 mins as i realised i had made a mistake.
    The appropriation account was based on my incorrect net profit as i did not have time to change my answers, so all my answers for this question were wrong. I hope that I do not lose many marks for this. I did show workings - Even if they were messy. So i am hoping that as long as i used the right method I gained half the marks.

  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:Appropriation Account exam question

    Everything was O.K until for same strange reason on the jornal question to correct the suspense account I debited the accruals account instead of the wages this brought my appropriation account showing the 50pence.

    I knew this was wrong looked at it for half an hour could not find the mistake then as soon as I left the room just like lightning it came to me.

    I treatesd everything right apart from this, after feeling so confident after Monday I am very disappointed with myself still hopeful of a pass but not confident?

    Oh well back to normal boring work today and at least the FHS (funny head syndrome) as gone.
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:Appropriation Account exam question

    8) This question tricked me when it came to the Capital Account, as I was unsure which parts to use,,,I first of all used the opening Capital Bal for the 1st 2 people, then for the 2nd half used the total capital remaining for all 3 - anyone done similar??
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:Appropriation Account exam question
    JAHUGHES wrote:
    8) This question tricked me when it came to the Capital Account, as I was unsure which parts to use,,,I first of all used the opening Capital Bal for the 1st 2 people, then for the 2nd half used the total capital remaining for all 3 - anyone done similar??
    I did this,it said calculated monthly so i thought because the capital changed we had to use the new balance we had worked out after goodwill, i thought it was right till i got out and the rset of my class hadnt done it this way!! :cry:
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:Appropriation Account exam question

    hiya,

    Doesn't mean you were wrong DewiJ, just because perhaps several others in your class did it on different fugures.

    I calculated interest on capital accounts for each partner. The first part of the year on the original opening balances - 2 partners.

    The second part of the year on the adjusted capital balances - after the creation and removal of goodwill, which as the new partner was infact buying into the company with his capital - therefore I would expect to see movement on the capital a/c balances. Therefore worked out interest on the second part of the year on the new capital balances! - 3 partners.


    Ruby
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:Appropriation Account exam question

    Thats exactly how i did it :D Glad to hear i wasnt the only one!!
    Thanks Dewi
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:Appropriation Account exam question

    First time posting! DewiJ and Ruby, i did that answer too, i've been thinking about it ever since i came out of the exam! At least there are a few of us with the same so there must be some logic behind it.
  • System
    System Posts: 100,534 πŸ€– Admin πŸ€–
    Re:Appropriation Account exam question

    I did what Ruby, DewiJ and squinit did and I worked out interest on capital based on amount held in each months. It said that in the question.

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