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

A partnership appropriation account is an account that is prepared before the partner's capital…

Answered: Open, post to and balance the…

Business

Accounting

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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

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

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 retailer
Names of the members and their interests and contributions made on 1 August 2015:
Members'
% Interest
Contributions
Barry 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 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:
1.
On 31 July 2020, the CC recorded a profit of R940 000. This profit was after taking into
account 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 how
long they have been a member.

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