Appropriation Account

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
I haven't heard anyone say they've got the same as me so far!<BR><BR>I used 3 columns, one for the first 8 months when Dan was there, the second for the next 4 months when he wasn't there, and a total column.<BR><BR>I then shared everything out in this ratio (my total net profit of £101,250)<BR><BR>This meant that I worked out Dan's share of profit on just the figures from the first column - can't remember what that figure was though.<BR><BR>But I know that for the last 4 months, the 50/50 split between the other two characters was £6625 each.<BR><BR>Have I cocked this up, or does anyone have the same?<BR><BR>Lynn

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Appropriation Account

    I think I had the same as you but with a slightly different layout! What did you get for profit to share between the partners my net profit was the same as you!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Appropriation Account

    Not sure but I split everything out, the interest and salary for the first 8 months and then the remainder for the last 4. If the retiring partner was allowed 3% per annum on capital then should it not be for 8 months - if it was for 12 it would be too much. Anyway not sure I got this bit correct, but along with the profit (101288 for some reason) it looks like the only area of doubt, so hopefully enough for a pass!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Appropriation Account

    The total amount of profit left after salaries and interest on capital had been taken off was £19,250. Being £6000 for the first 8 months, and £13,250 for the next 4 months.<BR><BR>I then did the profit share between the 3 of them in the ratio's (40:30:30) for the first 8 months - giving figures of £2400, £1800 and £1800. Totalling £6000.<BR><BR>I then split the last 4 months profit of £13,250 on a (50:50) to get £6625 each.<BR><BR>What I failed to do was then calculate that the total share of profits for the year would be:<BR>Dan £2400, Kim £1800 + £6625 = £8425 and the same for Ted...<BR><BR>Damn, hopefully did enough for them to see what I meant, all the figures were basically there!<BR><BR>Lynn<BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Appropriation Account

    I did it exactly the same ! (although my net profit was wrong, think i did something with depreciation!)
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Appropriation Account

    Phew,at least some people had the same figures as I did! Although it took me a while to figure ouot,I did the whole thing the other way ie. combining the appropiations in one statement but then when I saw the decimal points I thought no this can't be right. Then did the first 8mth statement on one page and had to do the other 4mths on the last page(working out page) because I had already written up the layout.<BR>But at the end got the same figures ie 2400, 8425,8425.<BR>How strict are they on layput I wonder?<BR>When are the answers published?<BR>As for the last question, what a load of waffle I produced!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Appropriation Account

    Managed to get the £19,250 as profit to be shared but shared it as:<BR><BR>8 months = £12,833 (2/3 of the year)<BR><BR>4 months = £6417 (1/3 of year)<BR><BR>After that it went:<BR><BR>40% = £5133 30% = 3850 (twice) = £12,833<BR><BR>followed by<BR><BR>50% = 3208:50 (twice)
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Appropriation Account

    i had the same as you Mick. £19,250 divided by 12 months = £1604.16 per month so times the 8 months is £12,833, then shared it out like you said
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Appropriation Account

    I got the same answer as both skipper and Mick!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Appropriation Account

    i had the same as you Mick. £19,250 divided by 12 months = £1604.16 per month so times the 8 months is £12,833, then shared it out like you said. Either we are all right or we are all wrong , roll on august. Time for a drink me thinks
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Appropriation Account

    Surely you split the net profit into 8/12ths and 4/12ths before you do any of the appropriations.<BR><BR>Therefore net profit of £101,250 becomes £67,500 for the first 8 months and £33,750 for the other 4 months.<BR><BR>As the salaries were £30,000 per annum, each partner would have earnt £20,000 each in the first 8 months (ie a total of £60,000).<BR><BR>If you take this amount away from the profit allocated to the first 8 months (£67,500), you only have £7,500 left.<BR><BR>If you take the interest on capital away from this (3 x £500 for the first 8 months) then you are only left with £6000 profit for the first 8 months - not the figure of (£19,250/12 x 8) £12,833 profit for the first 8 months?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Appropriation Account

    Hi Lynne<BR><BR>I did it the same way. I forgot to put the totals in too.<BR><BR>Kath
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Appropriation Account

    Yippee, I got the same as you Mick!<BR><BR>What did you do about the 50p on the profit shares for Kim and Ted? If you round both up your £1 over the profit available and if you round both down then you've £1 leftover from the profit share.<BR>I rounded one up and one down as I think I saw that in a question in my tutorial book.

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