Chapter 19 Limited Company equity

Amount contributed by shareholders to the company

• Issued share capital

• Retained earnings

• Dividends

• Share

Unit of ownership for a limited company

• Issued share capital

• Retained earnings

• Dividends

• Share

Profits the company made in previous years, to be distributed to the shareholders

• Issued share capital

• Retained earnings

• Dividends

• Share

Profits the company made in previous years, not distributed to the shareholders

• Issued share capital

• Retained earnings

• Dividends

• Share

Journal entry to record an issuance of shares

• Dr Issued share capital, Cr Cash at bank

• Dr Cash at bank, Cr Issued share capital

• Dr Dividends, Cr Cash at bank

• Dr Cash at bank, Cr Retained earnings

Journal entry to record a declaration of dividends, to be paid in future

• Dr Dividends, Cr Cash at bank

• Dr Dividends payable, Cr Cash at bank

• Dr Dividends, Cr Retained earnings

• Dr Dividends, Cr Dividends payable

Journal entry to record a declaration of dividends, to be paid in future

• Dr Dividends, Cr Cash at bank

• Dr Dividends payable, Cr Cash at bank

• Dr Dividends, Cr Retained earnings

• Dr Dividends, Cr Dividends payable

Journal entry to record a payment of dividends immediately when the company declared the dividends.

• Dr Dividends, Cr Cash at bank

• Dr Dividends payable, Cr Cash at bank

• Dr Dividends, Cr Retained earnings

• Dr Dividends, Cr Dividends payable

Journal entry to record a transfer of dividends at the end of an accounting year.

• Dr Dividends payable, Cr Retained earnings

• Dr Issued share capital, Cr Dividends

• Dr Dividends, Cr Retained earnings

• Dr Retained earnings, Cr Dividends

Which of the particulars cannot appear in the Retained earnings ledger account?

• Dividends

• Dividends payable

• Profit and loss

• Balance b/d