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Tamarisk Inc., a private company, is authorized to issue an unlimited number of common shares and 100,000 noncumulative $4 preferred shares. It began operations on
Tamarisk Inc., a private company, is authorized to issue an unlimited number of common shares and 100,000 noncumulative $4 preferred shares. It began operations on January 1, 2021, and the following are selected transactions during 2021. Jan. 1 Issued 480,000 common shares for $240,000 cash. 2 Issued 48,000 preferred shares for $50 cash per share. Dec. 1 Declared a total of $208,000 in dividends, payable on January 5, to shareholders of record on December 13. 31 Determined that it had total revenues of $915,000 and operating expenses of $630,000. Tamarisk elected to report under ASPE. It has a 15% income tax rate and paid income tax instalments during the year of $36,500. Record the share issue and dividend transactions. (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 for the amounts.) Date Debit Credit Account Titles and Explanation Cash Jan. 1 240,000 240,000 Common Shares (To record issuance of shares.) Jan. 2 Cash 2400000 Preferred Shares 2400000 (To record issuance of shares.) Dec. 1 Cash Dividends - Preferred 160000 48000 Cash Dividends - Common Dividends Payable (To record declaration of dividend.) 208000 Prepare a partial income statement starting with profit before income tax and record an adjusting entry for income tax. (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 for the amounts.) TAMARISK INC. Income Statement (Partial) Year Ended December 31, 2021 Operating Expenses tax Profit/(Loss) $ Debit Credit Date Account Titles and Explanation Dec. 31 Income Tax Expense Income Tax Payable (To record income tax expense.) Prepare a statement of retained earnings. (List items that increase retained earnings first.) TAMARISK INC. Statement of Retained Earnings $ V $ Prepare the shareholders' equity section of the balance sheet. TAMARISK INC. Balance Sheet (Partial) $
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