PoA Jan 2016 P2 Q2 - Solution | Partnerships | Appropriation accounts | Current accounts

[@seraphiaspence2905]

Hi how do you deal with bonus to partners if it it a % of net profit

[@adapttuition]

Hi, that's a pretty interesting question. Bonuses to partners aren't on the syllabus I teach but I would imagine that they would be appropriations of profits and appear in the appropriation account prior to the share of the profit after appropriation. As for the calculation, I would simply multiply the %'s given by the net profit. If however, the bonus is an expense and has to be deducted before net income, then the calculation gets a bit trickier (and fun :D)

[@seraphiaspence2905]

@@adapttuition Thank you for your quick response it just simply says the partner gets a % of net profit as a performance bonus.

[@seraphiaspence2905]

and i am doing the appropriation

[@adapttuition]

You’re welcome. 😊 It sounds like a straight case of the item being an appropriation then.

[@gabbie7397]

when you're doing a partnership account, is it a must to do current accounts after even if the instructions didn't specifically say that?

[@adapttuition]

So when you say "a partnership account" what exactly are you talking about? But generally if the question doesn't ask for something you don't have to prepare/provide/do it.

[@gabbie7397]

@@adapttuition i meant profit and loss appropriations accounts** sorry but okay, thank you!

[@adapttuition]

That’s more like it 😁

[@brittneyburrell8871]

how did u calculate the residual profits?

[@adapttuition]

Have a look at this video and see if it helps kzbin.info/www/bejne/gKnMZ2dsbNGmfs0

[@joshuaphillips8424]

Thank you this helped so much!!

[@adapttuition]

Hey, Joshua! Happy to help 😊 Glad you found the content helpful. Keep up the good work!

[@shekirahlewis1970]

your a life saver!

[@adapttuition]

Happy to know you found the content helpful!

[@ethancolaco14]

Very helpful!

[@adapttuition]

Happy to help