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 $20$X$8$ was as follows:

Current Liabilities $

Final Dividend Payable $$ Ordinary $75,000$

Issued Capital

$1,500,000$ Ordinary shares issue price $$1$ paid to $5$ cents per share $750,000$

$1,000,0007\%$ Preference shares issue price $$1$ fully paid $1,000,000$

$1,750,000$

General Reserve $300,000$

Retained Earnings $150,000$

$450,000$

Net Equity $2,200,000$

During the financial year ending $30$ June $20$X$9$ the following transactions occurred:

$($a$)$ On $31$ July $20$X$8$ the provision for final dividend on ordinary shares of $$75,000$ was paid;

$($b$)$ On $1$ January $20$X$9$ an interim dividend of $3\%$ on preference shares was declared and paid;

$($c$)$ At $30$ June $20$X$9$ 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 $20$X$9$ 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 $20$X$9.($Show your workings where possible$).$ Casestudy$2$:$$Retained Earnings Account

Retained Earnings Account

Date Particulars $ Date Particulars $

$01/07/20$X$8$ Opening Balance $150,000$

$31/07/20$X$8$ Final Dividend paid $75,000$

$01/01/20$X$9$ Interim Dividend Paid $30,000$

$30/06/20$X$9$ Net Profit Before Tax $450,000$

$30/06/20$X$9$ Increase in General Reserve $120,000$

$30/06/20$X$9$ Provision for Final Dividend $120,000$

$255,000210,000$ ive answered it but it still doesnt balance are u able to show me where each one goes in that exact table