Aug 10 Final dividend declared on 5 July was paid Sept Sept 2017 Jan March June

Aug 10 final dividend declared on 5 july was paid

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Aug. 10 Final dividend declared on 5 July was paid
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Sept. Sept. 2017 Jan. March June 2 30 30 10 30 First and final call made on the 500 000 partly paid shares. All call money received. Interim dividend of 10c per share declared and paid out of retained earnings. The directors made a 1-for-8 bonus issue of shares from the general reserve. Shares are issued at $2.20 each. Profit before tax for the year was $760 000 out of which the following appropriations were made: (a) Income tax expense $220 000 (b) Transfers to reserves from retained earnings General reserve 100 000 Plant replacement reserve 30 000 July 2 The final dividend of 10c per share on all issued shares was declared. Required A. Prepare the journal entries (in general journal format) required in the year ending 30 June 2017. B. Prepare the statement of changes in equity up to 30 June 2017. A. 2016 July 5 Retained Earnings/Final Div Declared Dr 81 000 Dividend Payable Cr 81 000 (Final dividend declared) Aug 10 Dividend Payable Dr 81 000 Cash Cr 81 000 (Final dividend paid) Sept 2 Final Call Dr 200 000 Share Capital Cr 200 000 (Final call on 500 000 shares at 40c) Sept 30 Cash Dr 200 000
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Final Call Cr 200 000 (Cash received on call) 2017 Jan 30 Retained Earnings/Interim Div Paid Dr 90 000 Cash Cr 90 000 (Interim dividend paid; 900 000*10c) Mar 10 General Reserve Dr 247 500 Share Capital Cr 247 500 (Bonus share issue; 900 000/8*$2.20) Jun 30 Income Tax Expense Dr 220 000 Current Tax Liability Cr 220 000 (Income tax expense for the year) Retained Earnings/T’fers to Reserves Dr 130 000 General Reserve Cr 100 000 Plant Replacement Reserve Cr 30 000 (Transfers to reserves) Revenues Dr x Expenses (excl. tax) Cr x Profit or Loss Summary Cr 760 000 (Closing entry) Profit or Loss Summary Dr 220 000 Income Tax Expense Cr 220 000 (Tax expense closing entry)
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Profit or Loss Summary Dr 540 000 Retained Earnings Cr 540 000 (Closing entry to transfer profit) The entry for the final dividend declared on the 2 July is not included as only required to prepare entries for the year ending 30 June 2017.
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B. SANTIAGO LTD Statement of Changes in Equity for the year ended 30 June 2017 Total comprehensive income for the period* $540 000 Retained earnings: Balance at 1 July 2016 $980 000 Profit for the period 540 000 Dividend declared – final 2016 (81 000) Interim dividend paid (90 000) Transfer to plant replacement reserve (30 000) Transfer to general reserve (100 000) Balance at 30 June 2017 $1 219 000 Share capital: Balance at 1 July 2016 $1 764 000 Call on shares 200 000 Issue of bonus shares 247 500 Balance at 30 June 2017 $2 211 500 Other reserves: General reserve Balance at 1 July 2016 $600 000 Transfer from retained earnings 100 000 Issue of bonus shares (247 500) Balance at 30 June 2017 $452 500
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Plant replacement reserve Balance at 1 July 2016 $550 000 Transfer from retained earnings 30 000 Balance at 30 June 2017 $580 000 * Comprehensive income = Profit $540 000 (there are no items of other comprehensive income) Q u e s t ion 3 . 1 4 S h a r e isu s , op t ion s ,d i v id e n d an r se rv The equity of Cairo Ltd at 30 June 2016 consisted of: 400 000 ordinary ‘A’ shares, issued at $2, fully paid 300 000 ordinary ‘B’ shares, issued at $2, called to $1.20 50 000 6% redeemable preference shares, issued at $1.50, fully paid Share issue costs Calls in advance (at 80c)
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