Reference no: EM132464910
Problem - The integrity corporation was incorporated on January 1, 2019 with authorized capital of 100,000 shares of 100 par value 10% preference share capital and 200,000 shares of 100 par value ordinary share capital. The shares were issued during the year 2019 as follows:
January 15. Issued for cash 50,000 preference shares at 120.
January 20. Subscribed ordinary shares at par value and paid 1,250,000.00 balance was paid on February 20.
During 2019, the following are the corporate affairs of the company:
Revenues - 2,325,000
Direct Cost - 500,000
Gross Profit - 1,825,000
Admin Expenses - 130,000
Selling Expenses - 120,000
Tax Expense-- 75,000
Net Income -1,500,000
On year 2020 the Integrity corporation was blessed. The company decided to declare and paid a cash dividend to its stockholders. Income earned is 150,000 more than the last year's income.
On year 2021 the integrity corporation sustained a loss due to economic recession. Net Ioss is 500,000 for the year.
On year 2022, there was an economic turnover that reverses the loss sustained by the company from last year. This year, the company earned a 2,000,000 of net income. The Company decided to declare and pay cash dividend to its stockholders.
Required - Prepare journal entry method.