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ZetaTech Ltd has a trading profit for the year ended 31 December 2023, before dealing with the following items, of $65,000. You are to complete

ZetaTech Ltd has a trading profit for the year ended 31 December 2023, before dealing with the following items, of $65,000. You are to complete the profit and loss account and appropriation account.

Item

Details

a

The standard rate of income tax is 26%.

b

ZetaTech Ltd had $45,000 of 7% debentures. It sent cheques for debenture interest for the year less income tax, on 31 December 2023.

c

ZetaTech Ltd had bought $15,000 of 9% 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

ZetaTech Ltd had bought 20,000 ordinary shares of $1 each in AlphaTech Ltd. AlphaTech Ltd paid a dividend to ZetaTech Ltd of 16% on 30 November 2023. AlphaTech Ltd is a 'related company'.

f

ZetaTech Ltd had a liability for corporation tax, based on profits for 2023, of $32,000.

g

ZetaTech Ltd proposed a dividend of 27% on its 85,000 ordinary shares of $1 each, out of the profits for 2023.

h

Transfer $5,500 to general reserve.

i

Unappropriated profits brought forward from last year amounted to $9,500.

Requirement: Complete the profit and loss account and appropriation account for ZetaTech Ltd and prepare a summary of cash dividends declared.

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