APOLOGIES (CAPITAL POST) - FRA

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Did you all remember to add the interest on Capital?? 5%?? [PLEASE IGNORE THIS POST - IT'S COMPLETE NONSENSE - APOLOGIES TO THOS WHO HAVE ALREADY READ IT]

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    INTEREST ON CAPITAL - FRA 01/12/04

    I CANT REMEMBER ANYTHING ABOUT INTEREST ON CAPITAL, OH MY GOD, HOPE I HAVE NOT FAILED!!!!!<BR><BR>FINGERS CROSSED
  • System
    System Posts: 100,534 🤖 Admin 🤖
    INTEREST ON CAPITAL - FRA 01/12/04

    It sure won't make you fail. Even though there were no instructions to award the partners interest on Capital in the exam ... it's a general rule that if no mention of interest is listed - that all partners should be given a 5% interest on the Capital Balance.<BR><BR>In this case - the interest gained (£2500 each) should be credited to the partner's current account.<BR><BR>Perhaps this might explain why some people's balance sheets never balanced!!<BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    INTEREST ON CAPITAL - FRA 01/12/04

    could you please tell us where can we find this information or general rule? <BR><BR>I had no problems with balancing yet did not include any interest on capital, so it will be interesting to see the source and eventually feedback on the question.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    INTEREST ON CAPITAL - FRA 01/12/04

    There should not have been interest on capital<BR><BR>---<BR><BR>The Partnership act 1890 states that if no agreement in place then:<BR><BR>The profits or losses will be shared equally<BR><BR>No Interest is to be paid on capital<BR><BR>No Interest is to be charged on Drawings<BR><BR>---<BR><BR>INTEREST IS ONLY CHARGE AT 5% if a partner <BR><BR>contributes more than the original capital then and only then is 5% to be charged on the additional amount over the original capital<BR><BR>sorry to those who have put capital on...<BR><BR>regards<BR><BR>Keiron
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Apologies

    Oh DEAR --- so sorry to those of you who have read this message and got confused - i sincerely apologise ... I HONESTLY thought that the capital interest needed to be charged --- How on earth my balance sheet balanced is another story now -- now i'm really confused and worried myself - thans Kieron for sorting this out so soon ... You're correct in stating that the interest should only be charged for loans ...<BR><BR>... again - apologies to ALL... i should have been more certain before posting it!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    INTEREST ON CAPITAL - FRA 01/12/04

    It never told us to put interest on anythin let alone capital. if your balance sheet didnt balance its to do with the journals entries coz i messed mine till i got it right! or the provision of doubtful debts ur supposed to minus of debtors but i added it coz there waz a diference of 795.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Apologies

    sorry to worry you...<BR><BR>If you show that you can prepare a current account and that you have used your knowledge to add interest, i dont think that you will fail<BR><BR>Even if you did or didn't apply interest the b/s will still balance, becasue the interest comes out of the profits which make up the final figure...so it will balance back<BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Apologies

    Hi Kieron,<BR><BR>Are you perhaps a Tutor? You sure know how to calm people down ... thanks -- i really had a rough sleep last night worrying about making that mistake (i guess it's my payment for making other people worry hey)...<BR><BR>But i really felt much better after reading your reply ... Thanks.<BR><BR>In your opinion - do you then think that i'll get no marks for my current account and for transferring the incorrect amount to my balance sheet? i.e.) will the damage be great?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Apologies

    no need to worry on this anyone<BR><BR>any interest on capital would be subtracted from the net profit in the appropriation account, and then the residual profit would be shared out. <BR><BR>as both partners have an equal capital amount and an equal 50/50 split - there would be no difference to the calculated figures in their current accounts - it might be an unwritten rule but it makes no difference to the answer!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Apologies

    Brent1975 - stop worrying!!!!! The paper is done and you wont know until the result until February. Even if you didnt have anything balancing, and guessed half the answers, if your workings are correct, and show on the paper, you will still get marks for correct method of calculation.<BR><BR>Your only going to make yourself ill with all this worrying!!! Go out to the movies tonight or a meal with friends or down the pub!!! IT'S FRIDAY!!! THE WEEKEND IS HERE!!! Go celebrate that youdid your exam rather than commiserating that you dont know how you did!<BR><BR>I'm a sure re-take in June next year, but I've put it behind me now and I'm concentrating on the simulation paper. It's one small step at a time......<BR><BR>Katherine
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Apologies

    hey Katherine,<BR><BR>I think i'm just frustrated - that's all ... especially if you think you've done it all right and then after discussion - it turns out it's not all right ... worry is part of it all -- otherwise you're immune to it all ... and i'm not -- so let me be curious and frustrated ok - thanks.<BR><BR>If that's a sin -- sorry - but it's natural! If someone out there can ease the frustration (which Kieron has done) by helping me understand the marking process -- then i'm all ears...<BR><BR>Party i will -- but still at the back of my head i'm thinking of the exam -- perhaps now -- maybe next week it'll all be forgotten - but while it's on my mind -- i'm finding out all i can!!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Apologies

    Brent, Im not having a dig at your curiosity - that is very healthy and natural to feel like that; perhaps cause i did foundation in june and felt confident after the exam i didnt worry about it - even when others had different answers to me. I felt confident I had done my best and was happy regardless of the result (or course i wanted to pass - and did) but at the end of the day its how YOU felt after the exam - you sound confident that you answered the questions correctly, and you were happier with your work before everyone said they had something different - did it occur to you that they are all wrong and you are right??!!<BR><BR>All I was merely saying - probably not very clearly - is that you have done well! You took the exam to the best of your abilities and you will pass - is there really any doubt? I dont think so, as you seem so confident on this forum and on the MSN group message board, it really was just a passing comment that you can relax now - even for one night! Enjoy the fact that its all over with for the moment - the time to really start panicing is in february - when you forget valentines cause your sick with worry about the results two days later!!!<BR><BR>Katherine<BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Apologies

    erm...just read all these threads and it sounds a bit like chinese whispers!<BR><BR>I didnt include interest on capital and I was also concerned that there wasnt any drawings/interest on drawings within the partners current accounts...seemed a bit too easy in all honesty and i did come home and think...OMG have I missed drawings out..interest on drawings etc etc<BR>I think the more you dwell on it the worse it seems to be..then everyone else jumps on the bandwagon and starts panicking.....<BR><BR>Even if interest on capital was/was not included, its no biggie coz you wont fail on that one thing...you may lose a mark if that....<BR><BR>so relax..!

Categories

Privacy Policy