PRACTICAL QUESTION (18 marks) Information on Death Star Ltd's share capital for the financial year ended 30 June 2016 is presented below: Fully paid ordinary shares issued O $2.00 per share $20000,000 Preference Shares issued ID $2.25 per share $11,250,000 Total share capital $31250,000 The following events occurred during the financial year An obligatory 5% preference share dividend was announced on 1/9/2016. The preference dividend was paid on 16/9/2016. On 20/10/2016 three of the company's key directors were provided with a total of 600000 share options valued at $0.50 each as part of their compensation package. The options contracts allowed the three directors to acquire one ordinary share per granted option in the company for $12.50 each. These options could be exercised up until the 30 June 2017, after which they would lapse. On 10/11/2016 the directors declared an issue of 200,000 bonus ordinary shares to existing ordinary shareholders at book value (ie. $2.00). After the company's ordinary share price increased to $15.50 per share on 3/2/2017 the three directors decided to exercise their option contracts to purchase additional shares in Death Star on that date. On 30/5/2017 the directors of Death Star declared a final ordinary dividend of 5 cents per share. The dividend was paid 2/7/2017. After announcing a profit of $2,500,000 for the financial year on 30 June 2017, the directors decided that 4 of the remaining profit (after considering all dividend payments made throughout the year) was to be transferred into a General Reserve. Required: Prepare the journal entries up to 30 June 2017 to record: (i) The preference dividend transactions; (i) The granting of the share options; (ii) The bonus share issue; (iv) The exercise of the share options; (v) The final ordinary dividend declared; and (vi) The closing entry for the dividend transactions. (vii) The transfer of profit to the General Reserve. (4 marks) (2 marks) (2 marks) (3 marks) (2 marks) (3 marks) (2 marks Narrations are not required. Use the pro forma schedule below