Csec: May 2012, Question #7

No. 7(a): Preparation of the Income Statement of Liontown Co-operative for the year ended 31st December, 2010:

No. 7(a): Preparation of the Appropriation Account of Liontown Co-operative for the year ended 31st December, 2010:
Workings:

1. Calculation of dividends paid = 10¢ x 55,000 shares = $5,500.

Below is the Appropriation Account of Liontown Co-operative for the year ended 31st December, 2010:

No. 7(b) (i): Identifying the type of co-operative Liontown will be classified under in year one and year two:

1.  In the first year the Liontown Cooperative will be classified as a producer co-operative.
2. In the second year the Liontown Cooperative will be classified as a credit union.

 
No. 7(b) (ii): One committee the Liontown Co-operative is likely to use to carry out its business:

• One committee the Liontown Cooperative is likely to carry out is business is a loan approval committee.

 
No. 7(b) (iii): One purpose of the Member’s Education Fund:

• To provide financial education to members of the cooperative and to the community at large. This is in keeping with one of the fundamental principles of cooperatives: a commitment to continuous education and training.

No. 7(c): Accounting for the appropriation of the surplus of $157,500 for the year ended 31st December, 2011:

 No. 7(c): Below is the classified Balance Sheet of Liontown Cooperative as at 31st December, 2011:

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