Suppose that the results of the income statement in 2020.12.31 for one of the joint-stock companies showed a net profit of 900,000 dinars after deducted the tax, and the company's general assembly approved the distribution of these profits in accordance with the applicable laws and the company's statute and based on the proposal of the company's board of directors. If you know that the Income Tax Law provides for a deduction of 20% of the net profit before tax. Further, the Companies Law and the Articles of Association provide for a deduction of 10% and 20% as a Mandatory reserve and an Voluntary reserve, respectively. As well as deducting 5% of the expansion reserve and a 5% return on the capital of seven million dinars, noting that the board of directors ’remuneration percentage is 10% of the net profit after deducting taxes and deductions.
Required.
Preparing the draft distribution account provided by the Board of Directors?
Record the entries in the books of the company?
Organizing the profit and loss distribution account?

Answer rating: 100% (QA)

Particulars Amount dinars Net Profit after tax 900000 Less Mandatory R... View the full answer