Modern Technology Company was established during August, 2018 with the following authorized capital:- -Common Stock of...

 

Transcribed Image Text:

Modern Technology Company was established during August, 2018 with the following authorized capital:- -Common Stock of Rs. 10 each 10% Preferred Stock of Rs. 50 each 500,000 shares 200,000 shares The Company issued shares as under:- 10-09-2018 50,000 Common Stock at Rs. 10 each 20-12-2018 40,000 Common Stock at Rs. 12 each 15-09-2019 20,000 Common Stock at Rs. 9 each 10-10-2019 40,000 10% Preferred Stock at Rs. 60 each 12-10-2019 100,000 10% Preferred Stock for Plant and Equipment valuing Rs. 6,000,000 30-06-2020 Earned a profit of Rs. 900,000 during the year 2019-2020 The closing balance of Accounts Receivable amounted to Rs. 600,000 and Inventories amounted to Rs. 400,000 30-06-2020 Declared 10% dividend on Preferred and 8% dividend on Common Stock. The Accounts Payable at year end amounted to Rs. 100,000 25-07-2020 Paid dividend to 10% Preferred and Common Stockholders Required: A) Pass necessary journal entries until 30 June 2020. B) Prepare balance sheet as at 30 June 2020 C) Pass necessary accounting entries for payment of Dividends on 10% Preferred and Common Stocks on 25 July 2020. Modern Technology Company was established during August, 2018 with the following authorized capital:- -Common Stock of Rs. 10 each 10% Preferred Stock of Rs. 50 each 500,000 shares 200,000 shares The Company issued shares as under:- 10-09-2018 50,000 Common Stock at Rs. 10 each 20-12-2018 40,000 Common Stock at Rs. 12 each 15-09-2019 20,000 Common Stock at Rs. 9 each 10-10-2019 40,000 10% Preferred Stock at Rs. 60 each 12-10-2019 100,000 10% Preferred Stock for Plant and Equipment valuing Rs. 6,000,000 30-06-2020 Earned a profit of Rs. 900,000 during the year 2019-2020 The closing balance of Accounts Receivable amounted to Rs. 600,000 and Inventories amounted to Rs. 400,000 30-06-2020 Declared 10% dividend on Preferred and 8% dividend on Common Stock. The Accounts Payable at year end amounted to Rs. 100,000 25-07-2020 Paid dividend to 10% Preferred and Common Stockholders Required: A) Pass necessary journal entries until 30 June 2020. B) Prepare balance sheet as at 30 June 2020 C) Pass necessary accounting entries for payment of Dividends on 10% Preferred and Common Stocks on 25 July 2020.

Answer rating: 100% (QA)

A 10092018 50000 Common Stock at Rs 10 each 20122018 40000 Common Stock at Rs 12 each 15092019 20000 ... View the full answer