0 Case Study 2 You have now obtained a new position as an accountant for Sammy, Davis and Junior (SDJ), a public accounting practice based in St Georges Terrace Perth. The practice specialises in preparing financial reports for corporate entities located in Western Australia. The accounting practice of SDJ has many organisational policies for the preparation of financial statements and these are in accordance with taxation rules, and relevant accounting standards. Th principal of the practice, Sammy has asked you to complete part of the retained earnings account for a client company Steele Limited, which will be used in the preparation of the financial statement. The extract from the balance sheet for Steele Ltd as at 1 July 20X8 was as follows: Current Liabilities 5 | Final Dividend Payable Ordinary 75,000 Issued Capital [ 1,500,000 Ordinary shares issue price $1 paid to 5 cents per share| 750,000 1,000,000 7% Preference shares issue price $1 fully paid 1,000,000 1,750,000 -1 - T During the financial year ending 30 June 20X9 the following transactions occurred: (a) On 31 July 20X8 the provision for final dividend on ordinary shares of $75,000 was paid; (b) On 1 January 20X9 an interim dividend of 3% on preference shares was declared and paid; (c) At 30 June 20X9 the following adjustments were made: - General reserve increased by $ 120,000; - A final dividend on preference shares was declared; and - The directors declared and made a provision for final dividend of 8 cents per ordinary share. Note: The companies before tax profit for the year ending 30 June 20X9 was $450,000. Income Tax to be provided $50,000. Required: In accordance with appropriate accounting standards and organisational polices of the accounting practice, prepare a Retained Earnings ledger account for the year ended 30 June 20X9. (Show your workings where possible)