Principles of Accounting: Appropriation Account Example

• You can find the introduction to Appropriation Accounts here
• Having introduced them we will now look at an example

Example Question Appropriation Account

Gandanga, Waeni and Banda are partners. They share profits and losses in the respctive ratios

\tfrac{3}{8} : \tfrac{3}{8}: \tfrac{1}{4}
For the year ended 31 December 20X8 their capital accounts remained fixed at the following amounts:

Additional information

• They have agreed to give each other 5 per cent interest per annum on their capital accounts.
• In addition to the above partnership salaries of $32 000 for Waeni and $14 000 for Banda are to be charged.
• The net profit of the partnership before taking any of the above into account was $84 800.

Required:

1. Draw up the appropriation account of the partnership for the year ended 31 December 20X3.

• The solution to this question can be found here

To access more topics go to the Principles of Accounts Notes.