Reference no: EM131896154

Question - Retained earnings

At 1 July 2013, the balance in the Retained Earnings account of Daisy Ltd was $2000000. During the year ended 30 June 2014, the following events occurred:

1. Directors paid an interim ordinary dividend of $400000 during the period, and declared a final ordinary dividend of $460 000. A dividend was declared on the preference shares. The company's share capital comprises 600 000 8% preference shares issued for $1.50 per share and 350 000 ordinary shares fully paid at $2 per share.

2. Profit for the year was $1 750 000.

3. All buildings were to be revalued on 30 June 2014 from a carrying amount of $2800000 (original cost of $5000000) to $6500000. Depreciation has already been charged up to 30 June 2014.

4. Directors resolved to transfer $720 000 to a general reserve, and to transfer $1 800 000 from a previously created plant maintenance reserve back to retained earnings.

Required - Prepare journal entries for the above transactions, and the Retained Earnings account at 30 June 2014.