For a number of years you have been employed in a senior position by a firm of

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For a number of years you have been employed in a senior position by a firm of certified accountants. The two partners, Checke and Tikk, have now offered to take you into the firm as a junior partner with effect from 1 April 2012. Hitherto Checke and Tikk have contributed £50,000 and £30,000, respectively, as their capital. They receive interest on capital at 5% per annum and share profits in the ratio 3:2, respectively.

After admission to the partnership you will be expected to continue managing the practice for which you will receive exactly half your present annual salary of £14,000 as partnership salary. You will also be expected to contribute £20,000 as capital for which you will receive interest at 5% per annum. The profit-sharing ratio will then be altered to give you one-sixth share of profits and losses, without disturbing the relative shares of the other two partners.

For the year ended 31 March 2012 the total amount appropriated by the two partners was £34,000.


Required: 

Prepare a statement showing the details of the amounts appropriated to Checke and Tikk during the year ended 31 March 2012 together with details of amounts which would have been appropriated if you had been taken into partnership on 1 April 2011.

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Related Book For  answer-question

Financial Accounting An Introduction

ISBN: 9780273737650

2nd Edition

Authors: Mr Barry Elliott, Mr Augustine Benedict

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