Ratio Allocation Example 2 Version

Example 2: ratio allocation

From Account Code:

Ratio Account Codes:

To Account Codes:

Calculate the Total Allocation Amount

The Allocation Basis is Account Balance and the Allocation Percent is 30%.
Therefore the Total Allocation Amount is equal to the sum of the account balances for the "from" accounts:

Total Allocation Amount: $150,000.00 X .30 = $45,000.00

Calculate the Ratio

The Allocation Ratio Basis is Account Balance.
Therefore the Ratio Total is the sum of the account balance amounts for all the "ratio" accounts for the selected processing period and year.

Ratio Total = $10,000.00

1. For each "ratio" account, determine the Organization / Department.
   The location of the Organization and Department segments within the account code for our example are Segment1 and Segment4 respectively.

2. For each "ratio" account, divide the Ratio Total by the account's Account Balance.
   The defined account structure for this example is:

3. For each "to" account, determine the Organization/Department.

4. For each "to" account, calculate the Individual Allocation Amount by multiplying the Total Allocation Amount by the "to" accounts Ratio based upon their Organization/Department.

Resulting Journal Voucher amounts

Copyright © 2023 by Premier Inc. All rights reserved.