help on homework please
taskey
Registered Posts: 1,800
morning
i am stuck and i have got these questions wrong previously. please can some one point me in the right direction.
1) A partnership makes a net profit for the year of £100,000. Partner A is entitled to £20,000 salary and 40% of the residual profit. Partner B is entitled to a salary of £10,000 and the balance of the residual profit. Draw up their appropriation account and current accounts (ignore opening balances).
2) A partnership makes a net profit for the year of £45,000. The total capital contributed by all the partners is £80,000. This earns interest in the appropriate account of 5% per annum. Residual profits are shared in the ration A3: B3: C4. Calculate A’s share of the residual profit after interest on capital.
if someone could help i would really appreciate it. my head is fuzzled from studying DFS and i am past help no wi think
Thanks in advance
Tracy
i am stuck and i have got these questions wrong previously. please can some one point me in the right direction.
1) A partnership makes a net profit for the year of £100,000. Partner A is entitled to £20,000 salary and 40% of the residual profit. Partner B is entitled to a salary of £10,000 and the balance of the residual profit. Draw up their appropriation account and current accounts (ignore opening balances).
2) A partnership makes a net profit for the year of £45,000. The total capital contributed by all the partners is £80,000. This earns interest in the appropriate account of 5% per annum. Residual profits are shared in the ration A3: B3: C4. Calculate A’s share of the residual profit after interest on capital.
if someone could help i would really appreciate it. my head is fuzzled from studying DFS and i am past help no wi think
Thanks in advance
Tracy
0
Comments

can anyone help me at all?
Tracy0 
ok
1) you allocate salaries before profits
so firstly salaries
partner a = 20,000
partner b= 10,000
this is 30,000 from the 100,000 profit
so you have 70,000 profit left to apportion
partner a = 70,000*40% = 28000
partner b = 7000028000=42000
so for
partners a total apportionment of profits = 48000
partners b total apportionment of profits = 52000
2) like above with salaries capital interest is deducted from total profits before final apportionment
so 80000*5% = 4000 capital interest (it doesnt say how this is allocated to partners)
so 450004000=41000 residual profits
partner a = 41000 * 3/10 = 12,300 share of residual profits
hth!0 
fab, thanks for your help. I had the 1st one right, but i had added the interest, not deducted it.
DUH!!!
Tracy0
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