Question
On the 15 March X6 Company X decides to make effective the following profit distribution corresponding to the X5 profit which was 860,000. Compensation for
On the 15 March X6 Company X decides to make effective the following profit distribution corresponding to the X5 profit which was 860,000.
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Compensation for losses from previous years of 320,000.
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Legal reserve to comply with the Spanish legal requirement.
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Statutory reserves of 72,000.
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Dividend of 0.3 per share that will be made effective (paid) on the 15 April.
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The rest will be classified as voluntary reserves.
The equity of Company X at that date includes: share capital of 1,200,000 (120,000 shares of 10 par value each), legal reserve of 200,000, and a voluntary reserve of 80,000.
We also know that on the 15 November X5 and due to the promising performance of the company during the year, a dividend was distributed and paid of 0.2 per share.
Dividend withholding tax is 21%.
Required:
Can you record the entry corresponding to the profit distribution on the 15 March and the entry corresponding to the dividend payment on the 15 April? Please urgent
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