Accounting Test Question No Ltd 2 On Limited Companies

Below is a straight forward question on Profit & Loss Appropriation Account.

Question:

Jim Ltd made a net profit of $900,000 for the financial year ended 31 December 2007. Retained brought forward is $50,000.

(a) The company issued out 100,000 10% preference shares of $1 each and 200,000 ordinary shares of $2 each

(b) Interim dividend paid to preference shareholders are $5,000 and to ordinary shareholders are $100,000

(c) The directors recommend a final dividend of $0.50 per unit to the ordinary shareholders and the remaining preference share dividends.

(d) Transfer $60,000 to fixed assets replacement reserve

Required:

Profit & Loss Appropriation for the year ended 31 December 2007