Reference no: EM132463657

On 1 January 2019, Rake Ltd had equity accounts as follows.

Share capital (60 000 shares issued for $30 each)           $1 800 000
General reserve                                                             250 000
Retained earnings                                                           900 000

During the year, the following transactions occurred.

Point 1: Feb. 1 Declared a $0.60 cash dividend per share to shareholders, payable on 1 March.

Point 2: Mar. 1 Paid the dividend declared in February.

Point 3: July 1 Declared a 10% share dividend to shareholders, distributable on 31 July. On 1 July the market price of the shares was $40 per share and this was determined to be the amount at which the dividend shares would be issued.

Point 4: July 31 Issued the shares for the share dividend.

Point 5: Dec. 1 Declared a cash dividend of $0.50 per share on 15 December, payable on 5 January 2020.

Required

Question a. Journalise the transactions.

Question b. Enter the beginning balances and post the entries to the equity T accounts.

Question c. Prepare the equity section of Rake Ltd's statement of financial position as at 31 December.