From the information given below, you are required to prepare a profit and loss appropriation accounts for
Question:
From the information given below, you are required to prepare a profit and loss appropriation accounts for the first three years for Dambo Limited, a company based in Lusaka.
Ordinary share capital of 40 000 ordinary shares of K1.00 each and 20 000 5% preference shares of K1.00 each.
Corporation Tax based on the net profits of each year, is:
K4 100
K5 250
K 6 300
Transfers to reserves are made as follows: 2004 nil, 2005 general reserve K1 000, and 2006, fixed asset replacement reserve, K2 250.
Dividends were proposed for each year on the preference shares at 5 % and on the ordinary shares at: 2004, 10%; 2005, 12.5%; and 2006, 15%.
The net profits for the first three years of business ended 31 December are: K10 967, K14 864 and K15 822, respectively.
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill