CSEC Principles of Accounts · January 2018 · Paper 2 · Question 4(b)

At the end of the first half of the company's business year (30 June 2017), balances: Retained profits 150 000; Ordinary shares @ 1 each 300 000; 5% preference shares 50 000; General reserve 30 000; 2% debentures 100 000; Share premium 125 000; Net income 140 000. Debenture interest had not been included in calculating net income. Recommended appropriations: (i) 20 000 transferred to general reserve; (ii) 50 000 transferred to fixed assets replacement reserve; (iii) Ordinary dividend of $0.05 per share; (iv) Payment of the preference dividend.

Prepare a statement to show the appropriation of profits for the six months ending 30 June 2017.