Financial Accounting Question

Assume an income tax rate of 28% and a dividends tax rate of 20% Simbani Chips Ltd is a company that manufactures and distributes potato chips. They have a December financial year-end. The equity of Simbani Chips Ltd at 1 January 2018 comprised the following: Class A shares (1 000 000 shares) R1 250 000 15% Class B shares of R2 each R200 000 _ _ Retained earnings _ Revaluation surplus R100 000 The authorised share capital of the company is 2 000 000 Class A shares and 500 000 15% Class B shares of R2 each. The following transactions occurred during the year ended 31 December 2018: 1. 300 000 Class A shares were issued at R3 per share on 30 April 2018. 2. 100 000 15% Class B shares were issued at R2 each on 1 January 2018. 3. Share issue expenses to the value of R50 000 were written off to the Class A Share Capital account. An interim Class A dividend of R030 per share was declared on 31 March 2018. A final Class A dividend of R020 per share was declared on 31 December 2018. 30% of the shareholders are South African resident companies. The total comprehensive income for the year was equal to R600 000. The company had a tax charge of R160 000 that should be accrued for the current 90.\"??? financial year. REQUIRED: 1.1 Prepare the journal entries for transaction (1), (2), (3), (4) and (5). 1.2 Prepare the statement of changes in equity for the year ended 31 December 2018. Show all workings. 1.3 Prepare journal entries as would have been prepared by Simbani Chips Ltd to recognisethe tax chargefor the current financial year. 1.4 Identify the difference between a private company and a public company in terms of raising funds and shares transferability