Results 1 to 4 of 4

Thread: CCs prior to new act in 2008

  1. #1
    New Member
    Join Date
    Oct 2012
    Location
    Pieternaritzburg
    Posts
    8
    Thanks
    4
    Thanked 0 Times in 0 Posts

    CCs prior to new act in 2008

    Please could I get some help on the following for CCs

    1 Scenario

    A member (40%) has requested for contribution R20000 to be paid out to her at the end of the financial year 31 December 2007. This was granted by the members(25% and 35%) resp provided she reduced her loan to the company by R25000. With effect from 31 Dec their interest % in the cc changed to 25% 38% and 35%.


    Question: Do I reverse the contribution and undrawn profits from the previous year and apportion them to the change interest% in the current year?

    2. Scenario

    X Y and Z hold 30%(112500) 40%(150000) and 30%(112500) in a CC. X retires and sell his shares at a premium of 6,67% -R120 000 to Y and Z shared equally. A new member Q joins the CC in 2006 with a cash contribuition of R10000 and a loan of R50000 to the CC.

    What % of interest should Y and Z offer Q that would be fair to themselves.

  2. #2
    Silver Member
    Join Date
    Feb 2016
    Location
    Johannesburg
    Posts
    203
    Thanks
    17
    Thanked 42 Times in 36 Posts
    The 1st question cannot readily be solved because the final shareholding does not add up to 100%.
    The question you pose is not correct in any scenario. What does the question actually ask of you?

    The 2nd question:
    After X's retirement, Y and Z will have paid a total of R495,000 for 100% of the shares (Y is R226250 and Z is R228750). Work it out from there.

  3. #3
    New Member
    Join Date
    Oct 2012
    Location
    Pieternaritzburg
    Posts
    8
    Thanks
    4
    Thanked 0 Times in 0 Posts
    Thank you for your response.

    Q1 I need to do the Members A B and Cs net investment statement. With effect from 31 December 2007 -year end the members interest to change to 27% 38% and 35% respectively. On the same day there was a revaluation surplus on Land and Building of R50000. The opening balance on the members accounts are as follows:
    A B C TOTAL

    Investment account 125000 175000 20000 320000
    Undrawn Income 1355 1897 2168 5420

    My question is when i do the members net inv statement

    1. Do I reverse the opening balance of the undrawn income and apportion it according to the new members interest.
    2. Will the new members interest % be effective in the current year?
    3. Does the revaluation surplus have the new interest %.

    Hope this info makes this scenario clearer

  4. #4
    Silver Member
    Join Date
    Feb 2016
    Location
    Johannesburg
    Posts
    203
    Thanks
    17
    Thanked 42 Times in 36 Posts
    Quote Originally Posted by miskaccounting View Post
    Thank you for your response.

    Q1 I need to do the Members A B and Cs net investment statement. With effect from 31 December 2007 -year end the members interest to change to 27% 38% and 35% respectively. On the same day there was a revaluation surplus on Land and Building of R50000. The opening balance on the members accounts are as follows:
    A B C TOTAL

    Investment account 125000 175000 20000 320000
    Undrawn Income 1355 1897 2168 5420

    My question is when i do the members net inv statement

    1. Do I reverse the opening balance of the undrawn income and apportion it according to the new members interest.
    No, the balance at 1 Jan 2007 is unaffected. Remember though that you will reflect the members contributions change in the current year and that sets the new ratio, so to speak.
    2. Will the new members interest % be effective in the current year?
    3. Does the revaluation surplus have the new interest %.
    In 2 above, yes at 31/12/2007
    In 3 above yes.

Similar Threads

  1. TAx 2008
    By kimmy99 in forum Tax Forum
    Replies: 3
    Last Post: 02-Dec-08, 04:19 PM
  2. What to look forward to in 2008
    By Dave A in forum General Chat Forum
    Replies: 7
    Last Post: 22-Jan-08, 02:13 PM
  3. 2008 Olympics
    By Graeme in forum General Chat Forum
    Replies: 6
    Last Post: 14-Aug-07, 12:18 AM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •