On 30 June 2018, Parkinson Ltd had 1,000,000 shares on issue. Parkinson Ltd's reporting period ends on
Question:
On 30 June 2018, Parkinson Ltd had 1,000,000 shares on issue. Parkinson Ltd's reporting period ends on 30 June. The equity accounts at 30 June 2018 had the following balances:
Share capital: $5,000,000
Revaluation surplus 300,000
Retained earnings 1,800,000
Transactions during 2019 financial year and other information related to equity accounts are as follows:
1 Oct 18 Parkinson Ltd issued a prospectus inviting the public to subscribe to the issue of 100,000 shares for $7 per share: $3 due on application and $4 due on allotment.
15 Nov 18 Received applications for 100,000 shares.
18 Nov 18 Allotted 100,000 ordinary shares.
30 Nov 18 All allotment money received.
30 Apr 19 Declared 6% share dividend per share to shareholders, distributable on 31 May. According to the current market price of shares it was determined the dividend shares would be issued at $6 per share.
31 May 19 Issued the shares for the share dividend.
30 Jun 19 The profit for the year ended 30 June 2019 was $240,000.
Required:
- Prepare the journal entries to record the above transactions including closing entry of profit or loss summary account.
- Prepare an extract from the Statement of financial position as at 30 June 2019 providing the figures of the equity accounts and total equity.
- Narrations are not required.
Financial Accounting Tools for Business Decision Making
ISBN: 978-0470239803
5th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso