7. Liontown Co-operative was formed to produce souvenirs for the booming tourist market. The co-operative started with share capital of $55 000 in $1 shares. The co-operative is now two years old and records the following information for the first two years of operation. 31 December 2010 38 000 70 000 21 000 2 300 Cost of sales Sales Expenses Creditors Loans to members Interest due from members Loan from Cooperative Union Bank Equipment Portable stalls Inventory Bank 31 December 2011 $ 81 000 290 000 46 000 4 600 120 300 2 100 100 000 40 000 4 500 29 300 126 400 5 100 60 500 The co-operative paid out dividends of 10 per share in its first year of operation and transferred the remainder to a Members' Education Fund. (a) Prepare the Income Statement and the Appropriation Account for Liontown Co-operative for the first year ended 31 December 2010. (6 marks) (b) During the second year of operation, Liontown Co-operative began lending money to members who wished to start their own small business. (1) Identify the type of co-operative under which Liontown was classified in the operation of its a) first year b) second year. (ii) Name ONE committee that Liontown is LIKELY to use to carry out its business. (iii) State ONE purpose of the Members' Education Fund. (4 marks) For the year ended 31 December 2011, the Board of Directors records a surplus of $157 500. The board plans to transfer $32 600 to the Members' Education Fund pay out $27 500 in dividends leave the remainder as undistributed profits. Prepare a classified Balance Sheet for Liontown Co-operative for the year ended 31 December 2011 (second year of operation) taking the appropriation of the surplus into consideration. (10 marks) Total 20 marks 7. Liontown Co-operative was formed to produce souvenirs for the booming tourist market. The co-operative started with share capital of $55 000 in $1 shares. The co-operative is now two years old and records the following information for the first two years of operation. 31 December 2010 38 000 70 000 21 000 2 300 Cost of sales Sales Expenses Creditors Loans to members Interest due from members Loan from Cooperative Union Bank Equipment Portable stalls Inventory Bank 31 December 2011 $ 81 000 290 000 46 000 4 600 120 300 2 100 100 000 40 000 4 500 29 300 126 400 5 100 60 500 The co-operative paid out dividends of 10 per share in its first year of operation and transferred the remainder to a Members' Education Fund. (a) Prepare the Income Statement and the Appropriation Account for Liontown Co-operative for the first year ended 31 December 2010. (6 marks) (b) During the second year of operation, Liontown Co-operative began lending money to members who wished to start their own small business. (1) Identify the type of co-operative under which Liontown was classified in the operation of its a) first year b) second year. (ii) Name ONE committee that Liontown is LIKELY to use to carry out its business. (iii) State ONE purpose of the Members' Education Fund. (4 marks) For the year ended 31 December 2011, the Board of Directors records a surplus of $157 500. The board plans to transfer $32 600 to the Members' Education Fund pay out $27 500 in dividends leave the remainder as undistributed profits. Prepare a classified Balance Sheet for Liontown Co-operative for the year ended 31 December 2011 (second year of operation) taking the appropriation of the surplus into consideration. (10 marks) Total 20 marks