Finestein Corporation showed the following balances on 1 January 20X1.

On 4 January 20X1, the company issued 1000 shares for \(\$ 40000\). For the year ended 31 December 20X1, the company had sales revenues of \(\$ 102000\), cost of goods sold of \(\$ 48000\), operating expenses of \(\$ 17000\) and other revenues of \(\$ 3000\). In addition, the company declared and paid dividends of \(\$ 6000\) on 31 December. Finestein Corporation is subject to a 30 per cent income tax rate and uses a perpetual inventory system.
Required:
a Prepare journal entries to record the issue of common shares on 4 January 20X1, and the declaration and payment of the cash dividends on 31 December 20X1. (Assume that the company appropriately recorded the journal entries for the other transactions during the year.)
b Prepare the journal entry on 31 December 20X1 to record the 20X1 income taxes of Finestein Corporation.
c Prepare an income statement for the year ended 31 December 20X1.
d Prepare the shareholders' equity section of the 31 December 20X1 balance sheet.
e Prepare the 31 December 20X1 closing entries.

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Paid-Up Capital (14 500 shares, $10 par) Retained earnings $145 000 64 000