Didsbury Digital Ltd. has a September 30 fiscal year end and a 15% income tax rate. The

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Didsbury Digital Ltd. has a September 30 fiscal year end and a 15% income tax rate. The following information is available for its 2024 year end: 

1. Earned $529,000 of service revenue and incurred $442,000 of operating expenses. Interest expense was $2,500. 

2. On October 5, 2023, paid $50,000 of dividends that had been declared on September 25, 2023. 

3. On September 28, 2024, declared $40,000 of dividends payable on October 8, 2024. 

4. Retained earnings on September 30, 2023, were $237,500. 

5. Issued common shares for $25,000 cash on July 2, 2024. 


Instructions 

a. Prepare an income statement. 

b. Journalize the adjustment for income tax assuming no income tax instalments were made during the year. 

c. Prepare a statement of retained earnings.

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Related Book For  book-img-for-question

Accounting Principles Volume 2

ISBN: 9781119786634

9th Canadian Edition

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak

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