On 1 July 2018, the equity of Terravista Ltd was as follows: 600 000 ordinary shares issued

Question:

On 1 July 2018, the equity of Terravista Ltd was as follows:

600 000 ordinary shares issued at $2.20

General reserve

Retained earnings

1 320 000

50 000

500 000

During the year ended 30 June 2019, the following events affecting the company’s equity occurred:

20188

Aug. 1

Oct. 1

2019

Jan. 3

June 30

Declared and paid a cash dividend of 20c per share.

Announced a share split of 4 shares for every 1 share held. This was eventually carried out on 5 October.

Declared and paid an interim cash dividend of 5c per share.

Declared a final dividend of 8c per share. Profit (after tax) was determined to be $300 000. Transferred $10 000 to the general reserve.

Required

A. Prepare journal entries (in general journal format) for the listed transactions and events for Terravista Ltd for the year ended 30 June 2019.

B. Prepare a statement of changes in equity for the year ended 30 June 2019 to comply with IAS 1/AASB 101.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...

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