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Case Study 2 You are employed as the assistant accountant of the Finance team ( General Ledger GL section ) of Leica Inc., a company
Case Study
You are employed as the assistant accountant of the Finance team General Ledger GL section of Leica Inc., a company listed in the Australian Stock Exchange ASX The responsibility of the GL section is to manage the chart of accounts and ensure all journal postings to the GL is effectively processed in the accounting mainframe system in accordance with organisational policies and procedures as attached
You have been provided with the following information and your manager, has requested that you, complete journal entries and the retained earnings account ledger for the period ending June of the current year.
The shareholders equity of Leica Inc. as at July, consisted of:
$
Share capital fully paid preference shares, issue price $
Share capital fully paid ordinary shares, issue price $
General reserve
Asset revaluation reserve
Retained earnings
The following events occurred during the year ended June:
$
September Dividends paid for the prior year
Preference shares
Ordinary shares Final Dividend
January Interim dividend of cents per ordinary share declared and paid
February Land held by the company was revalued upwards by $
The balance in the asset revaluation reserve was used for a for bonus issue of fully paid ordinary shares, issue price $
June Net profit before tax
Income tax expense charged to profit and loss
The declaration of the preference dividend and an ordinary final dividend of cents per share recommended by the directors
Required:
a Prepare general journal entries to record the above events.
b Prepare the retained earnings account for the year ended June.
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