Question
Carla Vista Ltd. has a September 30 fiscal year end and a 15% income tax rate. The following information is available for its 2021 year
Carla Vista Ltd. has a September 30 fiscal year end and a 15% income tax rate. The following information is available for its 2021 year end:
1. | Earned $497,500 of service revenue and incurred $408,000 of operating expenses. Interest expense was $2,000. | |
2. | On October 5, 2020, paid $48,400 of dividends that had been declared on September 25, 2020. | |
3. | On September 28, 2021, declared $38,700 of dividends payable on October 8, 2021. | |
4. | Retained earnings on September 30, 2020, were $232,000. | |
5. | Issued common shares for $28,800 cash on July 2, 2021. |
Prepare an income statement.
CARLA VISTA LTD. Income Statement September 30, 2021Year Ended September 30, 2021Quarter Ended September 30, 2021 | ||
$ | ||
InvestmentsGross ProfitRetained Earnings, October 1, 2020Other ExpensesProfit Before Income TaxProfit / (Loss)Cash Dividends DeclaredProfit From OperationsRetained Earnings, September 30, 2021 | ||
Profit From OperationsProfit Before Income TaxInvestmentsGross ProfitOther ExpensesRetained Earnings, September 30, 2021Retained Earnings, October 1, 2020Profit / (Loss)Cash Dividends Declared | ||
Profit / (Loss)Profit From OperationsProfit Before Income TaxRetained Earnings, September 30, 2021Retained Earnings, October 1, 2020Other ExpensesCash Dividends DeclaredGross ProfitInvestments | $ |
Journalize the adjustment for income tax assuming no income tax instalments were made during the year. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Date | Account Titles and Explanation | Debit | Credit |
Sep. 30 | |||
(To record income tax expense.) |
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Prepare a statement of retained earnings. (List items that increase retained earnings first.)
CARLA VISTA LTD. Statement of Retained Earnings September 30, 2021Year Ended September 30, 2021Quarter Ended September 30, 2021 | ||
Retained Earnings, October 1, 2020Other ExpensesGross ProfitProfit From OperationsProfit Before Income TaxInvestmentsRetained Earnings, September 30Profit / (Loss)Cash Dividends Declared | $ | |
AddLess: Profit From OperationsProfit Before Income TaxRetained Earnings, September 30InvestmentsOther ExpensesRetained Earnings, October 1, 2020Gross ProfitCash Dividends DeclaredProfit / (Loss) | ||
AddLess: Profit / (Loss)InvestmentsRetained Earnings, September 30Other ExpensesRetained Earnings, October 1, 2020Gross ProfitProfit From OperationsCash Dividends DeclaredProfit Before Income Tax | ||
Retained Earnings, October 1, 2020Profit / (Loss)InvestmentsGross ProfitCash Dividends DeclaredOther ExpensesRetained Earnings, September 30Profit Before Income TaxProfit From Operations | $ |
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