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Desperately needing help :-(

  • 16 posts
  • # 102050

Desperately needing help with an appropriation on one of the mock exams.  I have done everything correctly up to TB and P&L but cannot get the current accounts to match the answer given

Opening capital 

K - 10000

R - 15000

Closing capital

K - 11800

R - 16800

G - 2400

G introduced as a partner halfway through the year.

No drawings taken by any partner

Current Accpunts

K - 1800 Dr

R - 2500 Cr

Profit is 19496.  Interest on capital is 5%.  Profit sharing is 1:1 for first 6 months then 2:2:1 for last 6 months

For first 6 months i get intereston capital of K - 250, R - 375 which leaves profit of 19496/2 = 9748 - 250 - 375 = 9123/2  = 4561.50 each

For last six months i get interest on capital K - 295, R - 420, G - 60.  Salary for G is 916 per month (x6) = 5496 so 9748 - 295 - 420 - 60 - 5496 = 3477.  So split 1390.80, 1390.80, 695.40.  

So current accounts K - 4697.30 Dr, R - 9247.30 Dr, G - 6251.40 but answer says 4415, 8965, 6816 respectively. Where am I going wrong? :-(

 

Email is marianne-mclevy@sky.com

Thanks for any help/advice

 
Christopher
  • 107 posts
  • # 102054

Hi Marianne,

 

86 views and no responses! Have you mananged to resolve your problem?

 

If you want to scan the question over and I will have a look along with the information for you and see if we can crack it for you.

 

Kind regards,

 

Christopher

 

accounts@cwalesaccountancy.co.uk

 
  • 16 posts
  • # 102055

Hi Christopher

 

Thanks for your reply!  I can't believe no-one else has responded either!  I've emailed you.

 

Thanks so much.

 

Marianne
lainy
  • Member PM.Dip
  • Practice Licence
  • 746 posts
  • # 102058

Hi Marianne.

 

No one has replied because most people are at the summit. I did have a quick look but couldnt get the correct answer either. I havnt yet passed stage 3 but if i can come up with the correct answer i will let you know.

 

Best of luck

 

kind regards and very best wishes

 

Lainy 
  • 16 posts
  • # 102060

Thanks Lainy.  :-)
  • 17 posts
  • # 102066

Hi Marianne - I am just finishing off this question - so don't know the outcome yet!

sue62
  • 16 posts
  • # 102067

I just can't believe that I'm being so thick!Smile
kjmcculloch
  • 1159 posts
  • # 102068

Hi Marianne,

Is there any more information about G's capital contribution when he joined the partnership?

If you have the question scanned, can you send it to me at kris@ayrshireaccountancy.co.uk and I'll have a look right now.

Kris
  • 16 posts
  • # 102072

Thanks to everyone who has replied.  I have found a solution to the appropriation account which is spot on with mine but still can't figure out why my current accounts are out.  I'm sure I'm going to be very embarrassed when I get the solution.
  • 17 posts
  • # 102074

Hi Marianne - I have just finished this question and get the same answers as you on the current accounts!!!  Help definately required- everything else is fine approporiation account and the balance sheet  Hope somebody can help us!

Sue
kjmcculloch
  • 1159 posts
  • # 102076

Hi Marianne,

You'll need to let me know when someone explains where you're going wrong, because I'm getting the same answer as you.  I've poured over it and can't see where they are getting their current account figures.  G especially should be pretty simple as there's only the interest, salary and 6 month profit share.

Sorry I couldn't be of more help.

Kris
  • 16 posts
  • # 102077

Hi Sue.  Thanks for doing that and getting back to me.  

 

Good to know we're both going doolally! I've had a couple of emails so I'll let you know if someone has a solution.  I won't be best pleased if it's an error in the mock as I have spent hours and hours on this!
  • 16 posts
  • # 102079

Thanks Kris.  I think the ICB may have to look at their answers on this one....Surprised
  • 17 posts
  • # 102080

Thanks Marianne
  • 17 posts
  • # 102082

Thanks Marianne
  • 2 posts
  • # 102083

Hi Marianne

 

I think I’ve got it...?  As you haven’t got split year profits you need to make the adjustments first:

 

Profit £19,496

Less G’s salary £5,496

Less interest on capital of £1400 made up of

  • K first 6 months £250

  • R first 6 months £375

  • K second 6 months £295

  • R second 6 months £420

  • G second 6 months £60

Leaves a profit for share of £12,600

Then split 50:50 into profit for first 6 months of £6,300 (split 1:1 gives K £3,150 and R £3,150)

And profit for second 6 months of £6,300 (split 2:2:1 gives K £2,520, R £2,520 and G £1,260)

 

Current accounts become

K = -1800 + 250 + 295 + 3150 + 2520 = 4415

R = 2500 + 375 + 420 + 3150 + 2520 = 8965

G = 5496 + 60 + 1260 = 6816

 

Hope this makes sense

 

Kind regards

Claire

 



Edited at 16 Oct 2014 09:32 PM GMT
kjmcculloch
  • 1159 posts
  • # 102085

Claire, You're probably right, but this then calls into question the model answer for the first part of the calculation.  It can't be done both ways.

In the model answer K and R get £4561.50 each for the first 6 months, they can't then get £3150 for the current account calculation.  It needs to be calculated consistently. 

Kris
  • 16 posts
  • # 102089

Thank you to everyone that has posted on this forum or emailed me directly.  I apologise if I have not replied to you directly but I am very grateful to you all for your input.  I have emailed the ICB this morning as there does seem to be an inconsistency in their answer and as soon as i have a reply I will let you know.

 

It's been good to see the alternative answer which is not reflected in their model answer but is definitely the amounts in the TB however their model answer does give different current account balances!

 

To be honest this has totally wrecked my confidence and I'm now very very anxious about doing the exam.

 

Thanks again

 

Marianne
Christopher
  • 107 posts
  • # 102090

I appreciate that yesterday a few may have attended the Summit, but with so many views and no repsonse, this is a great example of how the forum has helped share experience and knowledge and a team spirit, and it is great it has been solved.

We have enjoyed great sucess with the Manchester ICB Branch and this type of question is an example of what we would run through and work through together during branch meetings, and this is more of what we need on the forum for members.

 
  • 17 posts
  • # 102092

Thanks for contacting ICB Marianne, would be grateful to know the reponse - its worrying for the real thing!    

Sue

 
  • 16 posts
  • # 102147

Hi everyone


ICB have confirmed that they have an incorrect answer sheet and the way I've worked out the appropriation is correct.  So it's the current accounts that are out.

 

Thanks again to everyone that contributed.

 

SmileSmile 
  • 17 posts
  • # 102159

Thanks Marianne - and thank goodness we are not going totally mad! Smile
  • 16 posts
  • # 102298

Just to let everyone know I got my result today - 94%!  Thanks again for all the help! Smile
kjmcculloch
  • 1159 posts
  • # 102301

Fantastic! Laughing
lainy
  • Member PM.Dip
  • Practice Licence
  • 746 posts
  • # 102302

very well done

 

very best wishes

 

Lainy 
  • 17 posts
  • # 102307

Congratulations Marianne - I plan to do my exam next week!!!! 

 
  • 17 posts
  • # 102308

Hi Marianne - How long did it take for your to get your grading after submission?  Thanks Sue

 

 
  • 16 posts
  • # 102309

Hi Sue

 

It was 7 days.  

 

Marianne
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