Question 7(Marks: 10)Plane CC was registered on 1 August 2015. The founding statement of the Close Corporation (CC)sets out the following:The nature of the business - a spare parts retailerNames of the members and their interests and contributions made on 1 August 2015:Members'% InterestContributionsBarry Behr50%R500 000 (cash and equipment)Doris Daniels40%R400 000 (cash)Mo Mgotso10%R100 000 (cash)The following balances, amongst others, appeared in the CC's books at the end of the currentfinancial year, 31 July 2020:Members contributionsR1 000 000Retained Earnings (1 August 2019)R236 000With regards to the financial year ending 31 July 2020, the following information was available:1.On 31 July 2020, the CC recorded a profit of R940 000. This profit was after taking intoaccount transactions with members like remuneration.2.The income tax for the year is calculated at R260 000.3.The members are entitled to a distribution of profit of R45 000 each, irrespective of howlong they have been a member.Required:Open, post to and balance the Appropriation Account for the year ended(10)31 July 2020.

According to the accounting standards, it is the process of classifying, analysing, recording,…

Answered: Open, post to and balance the…

Business

Accounting

Open, post to and balance the Appropriation Account for the year ended 31 July 2020.

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter12: S Corporations

Section: Chapter Questions

Problem 1TRP

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Plane CC was registered on 1 August 2015. The founding statement of the Close Corporation (CC)sets out the following:The nature of the business – a spare parts retailerNames of the members and their interests and contributions made on 1 August 2015:Members’ % Interest ContributionsBarry Behr 50% R500 000 (cash and equipment)Doris Daniels 40% R400 000 (cash)Mo Mgotso 10% R100 000 (cash)The following balances, amongst others, appeared in the CC’s books at the end of the currentfinancial year, 31 July 2020:Members contributions R1 000 000Retained Earnings (1 August 2019) R236 000With regards to the financial year ending 31 July 2020, the following information was available:1. On 31 July 2020, the CC recorded a profit of R940 000. This profit was after taking intoaccount transactions with members like remuneration.2. The income tax for the year is calculated at R260 000. 3. The members are entitled to a distribution of profit of R45 000 each, irrespective of howlong they have been a…
Plane CC was registered on 1 August 2015. The founding statement of the Close Corporation (CC) sets out the following: The nature of the business – a spare parts retailerNames of the members and their interests and contributions made on 1 August 2015: (see attatched 6.JPG The following balances, amongst others, appeared in the CC’s books at the end of the current financial year, 31 July 2020: Members contributions R1 000 000 Retained Earnings (1 August 2019) R236 000 With regards to the financial year ending 31 July 2020, the following information was available: On 31 July 2020, the CC recorded a profit of R940 000. This profit was after taking into account transactions with members like remuneration. The income tax for the year is calculated at R260 000. The members are entitled to a distribution of profit of R45 000 each, irrespective of how long they have been a member. Required: Open, post to and balance the Appropriation Account for…
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