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uestion One From the information given below, you are required to prepare a profit and...

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Accounting

uestion One 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. a) Ordinary share capital of 40 000 ordinary shares of K1.00 each and 20 000 5% preference shares of K1.00 each. b) Corporation Tax based on the net profits of each year, is: 2004 K4 100 2005 K5 250 2006 K 6 300 c) Transfers to reserves are made as follows: 2004 nil, 2005 general reserve K1 000, and 2006, fixed asset replacement reserve, K2 250. d) 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%. e) The net profits for the first three years of business ended 31 December are: K10 967, K14 864 and K15 822, respectively.

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