Answer to Question #288589 in Accounting for Sho

Question

ft ltd is registered with an authorized share capital of 250000 ordinary shares. all shares were issued and the issue price was 20R each the company began business on the 13 September 20.1

On 28 February 20.2(end of the first accounting period) the profit an loss account reflected net profit of 302000. Income tax is calculated at 30% of net profit.no dividends were declared

1: prepare journal entries for the adjustment and closing transfers

2:post to the ledger

Answer 1

1)Debit settlements with founders credit authorized capital - 500 000 (25000*20)

2)Debit account profit and loss credit retained earnings - 302 000

3)Debit account retained earnings Credit account taxes - 90 600