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I think this issue can be answered by a quote from Business Accounts by David Cox:
'To avoid having to prepare final accounts at the date of a change of partnership, it is usual to continue the accounts until the normal year-end. Then, when profit for the year has been calculated, it is necessary to apportion the profit between the two parts of the financial year, i.e. to split the year into the period before the change, and the period after the change. This is often done by assuming that the profit for the year has been earned at an equal rate throughout the year. The apportionment is done by dividing the appropriation account between the two time periods.'
To illustrate it, here is my appropriation account:
Net profit for year 120,000
Less appropriation of profits:
Salary - Brazil Jul-Dec 30,000
90,000
Share of remaining profits:
Jan-Jun Jul-Dec
Wilcox (2/3) 30,000 30,000
Brazil (1/3) 15,000 (1/2) 22,500 37,500
Lilley (1/2) 22,500 22,500
90,000
Hope this helps
Annette
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