How do you work out an appropriation account?

To work out an appropriation account, start by determining the net profit of the business, which is derived from the profit and loss account. Next, allocate the net profit according to the partnership agreement or company policy, distributing it among partners or shareholders in the specified ratiOS. Include items like retained earnings, dividends, and reserves in the account. Finally, summarize the appropriations to show how the net profit has been distributed or retained.