FRA June 2006 Section 2 Task 2.5 HELP!
Layla
Registered Posts: 40 Regular contributor ⭐
Please can someone help me with this task?
The part i cant work out is how to share out the profit,
i have downloaded the answers but i still cant work out how they come to those figures..
for those of you that dont have the exam paper, this is the information i have:
Profit for Distribution: £84600.00
to be shared out as follows
Ade 40%
Jon 40%
Pat 20% please note that Pat joined 01/02/06 and the year end was 30/04/06.
the answers i have is
Ade
01/05/0531/01/06 £34650
01/02/0630/04/06 £6120
Jon
01/05/0531/01/06 £34650
01/02/0630/04/06 £6120
Pat
01/02/0630/04/06 £3060
How do they get to those figures?
Exam is tomorrow, please help!
The part i cant work out is how to share out the profit,
i have downloaded the answers but i still cant work out how they come to those figures..
for those of you that dont have the exam paper, this is the information i have:
Profit for Distribution: £84600.00
to be shared out as follows
Ade 40%
Jon 40%
Pat 20% please note that Pat joined 01/02/06 and the year end was 30/04/06.
the answers i have is
Ade
01/05/0531/01/06 £34650
01/02/0630/04/06 £6120
Jon
01/05/0531/01/06 £34650
01/02/0630/04/06 £6120
Pat
01/02/0630/04/06 £3060
How do they get to those figures?
Exam is tomorrow, please help!
0
Comments

The profit share until January 31st 2006 is Ade 50% & Jon 50%, so if Pat joined on the st Feb, the first 9 mopnths of the partnership has to be shared 50/50 between Ade & Jon. Therefore you divide the profit of £84,600 by 12*9 which would give you £63,450 which is then divided equally between Ade & Jon. Therefore the remainder of the profit of £21,150 is the shared out for the remiander period of 3 months at Ade 40%, Jon 40% and Pat 20%. So Ade would get £8460,Jon £8460 and Pat £4230. Add the fist share of profit of Ade & Jon of 31725+8460=40185 each for Ade & jon and £4230 for Pat give you a total of £84,600. Hope this helps0

Sorry Layla, what you need to do first is take off salaries, interests paid on capital then share out using the same as above. First divide by 12 and multiply by 9 for the fist nine months.0

Thanks very much...
think ive been revising too much and my brain is overloaded !0
Categories
 All Categories
 1.2K Books to buy and sell
 2.3K General discussion
 12.5K For AAT students
 318 NEW! Qualifications 2022
 161 General Qualifications 2022 discussion
 11 AAT Level 2 Certificate in Accounting
 56 AAT Level 3 Diploma in Accounting
 87 AAT Level 4 Diploma in Professional Accounting
 8.8K For accounting professionals
 23 coronavirus (Covid19)
 272 VAT
 92 Software
 273 Tax
 135 Bookkeeping
 7.2K General accounting discussion
 200 AAT member discussion
 3.8K For everyone
 38 AAT news and announcements
 345 Feedback for AAT
 2.8K Chat and offtopic discussion
 582 Job postings
 16 Who can benefit from AAT?
 36 Where can AAT take me?
 42 Getting started with AAT
 26 Finding an AAT training provider
 48 Distance learning and other ways to study AAT
 25 Apprenticeships
 66 AAT membership