Principles of Accounts
Accounting for Co-operative Societies
Questions and Answers
Question 1
The Sharkie Fishermen’s Cooperative Society has a share capital of $150 000. The
Income and Expenditure for the year ending March 31, 2006 shows a surplus of $36 200.
Undistributed surplus brought forward from the previous year is $6 000. The management
committee decided that the surplus should be shared in the following manner:
(i) 18% is to be transferred to a statutory reserve account.
(ii) 5% is to be placed in a scholarship fund for fishermen’s children.
(iii) 10% is to be placed in the members welfare fund
(iv) Dividends should be paid to members at the rate of ten cents to a dollar.
Prepare the Appropriation Account of the Sharkie Fishermen’s Cooperative Society.
Answer:
Sharkie Fishermen`s Cooperative Society
Appropriation account for the year ended March 31, 2006
Details $ $
Surplus before adjustments 36,200
Add: Undistributed Surplus 6,600
42,800
Less:
Statutory Reserve 6,516
Scholarship Fund 1,810
Welfare Fund 3,620
Dividends 15,000
26,946
Undistributed Profit 15,854
Calculations:
Statutory Reserve: 18/100 x $36,200 = $ 6,516
Scholarship Fund: 5/100 x $36,200 = $1,810
Welfare Fund : 10/ 100 x $36,200 = $3,620
Dividends: $0.1 x $150, 000 = $15, 000
Question 2
Prepare the appropriation account for BMX Cooperative for the year ended 31 December 2016
from the information below:
Accounting for Co-operative Societies
Questions and Answers
Question 1
The Sharkie Fishermen’s Cooperative Society has a share capital of $150 000. The
Income and Expenditure for the year ending March 31, 2006 shows a surplus of $36 200.
Undistributed surplus brought forward from the previous year is $6 000. The management
committee decided that the surplus should be shared in the following manner:
(i) 18% is to be transferred to a statutory reserve account.
(ii) 5% is to be placed in a scholarship fund for fishermen’s children.
(iii) 10% is to be placed in the members welfare fund
(iv) Dividends should be paid to members at the rate of ten cents to a dollar.
Prepare the Appropriation Account of the Sharkie Fishermen’s Cooperative Society.
Answer:
Sharkie Fishermen`s Cooperative Society
Appropriation account for the year ended March 31, 2006
Details $ $
Surplus before adjustments 36,200
Add: Undistributed Surplus 6,600
42,800
Less:
Statutory Reserve 6,516
Scholarship Fund 1,810
Welfare Fund 3,620
Dividends 15,000
26,946
Undistributed Profit 15,854
Calculations:
Statutory Reserve: 18/100 x $36,200 = $ 6,516
Scholarship Fund: 5/100 x $36,200 = $1,810
Welfare Fund : 10/ 100 x $36,200 = $3,620
Dividends: $0.1 x $150, 000 = $15, 000
Question 2
Prepare the appropriation account for BMX Cooperative for the year ended 31 December 2016
from the information below:
