ACCT2201 Chapter 2 (1) - Tutorial Questions part a b Question 2.9 Oversubscription and payment by instalments The equity balances for Acacia Ltd at the

ACCT2201 Chapter 2 (1) - Tutorial Questions part a b...

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Tutorial Questions part a, b Question 2.9Oversubscription and payment by instalmentsThe equity balances for Acacia Ltd at the 1 July 2018 comprised the following:Share capital$2 988 000(All ordinary shares, issued and paid to $5, less issue costs of $12 000)Retained earnings$7 600 400$10588400On 1 October 2018, Acacia Ltd issued a prospectus for applications for 200 000 ordinary shares to thepublic at an issue price of $7, payable $2.50 on application, $1.50 on allotment and the remaining $3in future call(s) as determined by the directors.By 1 December applications had been received for 240 000 ordinary shares with $2.50 attached.At a directors’ meeting on 5 December, it was decided to reject applications for 40 000 shares andissue shares to the remaining applicants.Share issue costs of $4000 were paid on 5 December. All outstanding allotment money wasreceived by the 1 January 2019.The first call for $2 was made on 1 February 2019 with all money received by 20 February. Thefinal call for $1 was made on 20 June 2019. At 30 June 2019 this call money had not been received inrelation to 25 000 shares.RequiredA.Prepare the journal entries to record the transactions of Acacia Ltd as outlined above. (Show allworkings.)B.Calculate the amount of share capital in the statement of financial position of Acacia Ltd as at 30June 2019 (Show all workings.)C.How would your answers to requirements A and B change if:By 1 December applications had been received for 240 000 ordinary shares of which applicants for80 000 shares forwarded $4 per share, and the remainder paying only the application money.At a directors’ meeting on 5 December, it was decided to allot shares applicants who had paid $4,and to reject applications for 40 000 shares where applicants had only forwarded $2.50 onapplication. According to the company’s constitution, all surplus money from application can betransferred to Allotment and/or Call accounts. ACACIA LTD (i) 2018 To 1 Dec Cash Trust Dr 600 000 Application Cr 600 000 (being receipt of applications) 5 Dec Application Dr 500 000 Allotment Dr 300 000 Share Capital Cr 800 000 (being issue of shares) Application Dr 100 000 Cash Trust Cr 100 000 (being refund to unsuccessful applicants)
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Share Capital/Share Issue Costs Dr 4 000 Cash/Payables Cr 4 000 (being payment of share issue costs) Cash Dr 500 000 Cash Trust Cr 500 000 (transfer of application money) 2019 To 1 Jan Cash Dr 300 000 Allotment Cr 300 000 (being receipt of allotment money due) 1 Feb Call Dr 400 000 Share Capital Cr 400 000 (being first call for $2) To 20 Feb
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