Question
Omega Corp has a trading profit for the year ended 31 December 2023, before dealing with the following items, of $95,000. You are to complete
Omega Corp has a trading profit for the year ended 31 December 2023, before dealing with the following items, of $95,000. You are to complete the profit and loss account and appropriation account.
Item | Details |
a | The standard rate of income tax is 24%. |
b | Omega Corp had $75,000 of 11% debentures. It sent cheques for debenture interest for the year less income tax, on 31 December 2023. |
c | Omega Corp had bought $18,000 of 10% debentures in another company. It received a year's interest, less income tax, on 30 December 2023. |
d | No cheque has been paid to the Inland Revenue for income tax. |
e | Omega Corp had bought 35,000 ordinary shares of $1 each in Alpha Ltd. Alpha Ltd paid a dividend to Omega Corp of 25% on 30 November 2023. Alpha Ltd is a 'related company'. |
f | Omega Corp had a liability for corporation tax, based on profits for 2023, of $45,000. |
g | Omega Corp proposed a dividend of 32% on its 120,000 ordinary shares of $1 each, out of the profits for 2023. |
h | Transfer $9,000 to general reserve. |
i | Unappropriated profits brought forward from last year amounted to $15,000. |
Requirement: Complete the profit and loss account and appropriation account for Omega Corp and prepare an analysis of dividends received and paid.
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