In: Finance
Sugar Ltd was involved in the following transactions during 1 July 2019 to 30 June 2020 financial period.
Required:
Provide journal entries to record the above transactions for 2019/2020 financial year. (Narrations are required)
Solution:-
Journal entries in the books of Sugar Ltd.
Date | Particulars | Amount (Dr.) | Amount (Cr.) | |
05-11-2020 | Bank A/c (total application amount) | Dr. | $4,800,000 | |
To Share Application A/c | $4,800,000 | |||
(Being application money received for 2.4 million shares@ $2 each) | ||||
30-12-2020 | Share Application A/c | Dr. | $4,800,000 | |
To Share Capital A/c (application amount) | $4,000,000 | |||
To Bank A/c (refund) | $800,000 | |||
(Being share application money on 2,000,000 shares @ $2 each, transferred to share capital, money on 400,000shares @ $2 each, refunded) | ||||
07-02-2020 | Retained earnings A/c | Dr | $300,000 | |
To Dividends payable A/c | $300,000 | |||
(Being Declared of cash dividend to be ) | ||||
07-02-2020 | Dividends payable A/c | Dr | $300,000 | |
To Bank A/c | $300,000 | |||
(Being payment of cash dividend to be ) | ||||
30-06-2020 | General Reserve A/c (280000shares x $2) | Dr. | $560,000 | |
To Share Capital A/c | $560,000 | |||
(Being 280,000 bonus shares of $2 issues out of general reserve) | ||||
30-06-2020 | Profit/ Loss A/c | Dr. | $700,000 | |
To Reserves | $700,000 | |||
(Being profit at year end transferred to reserves of the company) |
Note- The transfer of Amount from companies bank account is just a transfer and thus not reflected in journal.