Second Call 3117 Share Capital 125 000 117 Cash 106 250 10317 Share Capital 18

Second call 3117 share capital 125 000 117 cash 106

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Second Call 3/1/17 Share Capital 125 000 --/1/17 Cash 106 250 10/3/17 Share Capital 18 750 125 000 125 000 Forfeited Shares Reserve
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25/3/17 Share Capital 15 000 10/3/17 Share Capital 118 750 25/3/17 Cash (costs) 250 25/3/17 Balance c/d 103 500 118 750 118 750 25/3/17 Balance b/d 103 500 B. MAGNOLIA LTD Equity (as at 25 March 2017) Contributed equity: (100 000 shares paid to $10) $1 000 000 Less Share issue costs 800 $999 200 Reserves 103 500 [Forfeited shares] Retained earnings [formation costs] (1 300) Total Equity $1 101 400
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Question 2.11 Oversubscription, with excess money received on application On 1 August 2018, Prunus Ltd issued a prospectus inviting applications for 800 000 ordinary shares to the public at an issue price of $12, payable as follows: $4 on application (due by closing date of 1 November) $5 on allotment (due 1 December) $3 on future call/calls to be determined by the directors By 1 November, applications had been received for 860 000 ordinary shares of which applicants for 100 000 shares forwarded the full $12 per share, applicants for 300 000 shares forwarded $9 per share and the remainder forwarded only the application money. At a directors’ meeting on 7 November, it was decided to allot shares in full to applicants who had paid the either $12 or $9 on application, to reject applications for 20 000 shares and to proportionally allocate shares to all remaining applicants. According to the company’s constitution, all surplus money from application can be transferred to Allotment and/or Call accounts. Share issue costs of $11 000 were also paid on 7 November. All outstanding allotment money was received by the due date. A first call for $1.60 was made on 1 February 2019 with money due by 1 March. All money was received by the due date. A second and final call for $1.40 was made on 1 June with money due by 18 June. All money was received by the due date. Required Prepare the journal entries to record these transactions of Prunus Ltd. (Show all workings.) PRUNUS LTD General Journal 2018 To 1 November 15 Cash Trust Dr 5 740 000 Application Cr 5 740 000 (Cash received on application)
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November 7 Application Dr 80 000 Cash Trust Cr 80 000 (Refund to 20 000 applicants) Application Dr 3 200 000 Allotment Dr 4 000 000 Share Capital Cr 7 200 000 (Allotment of 800 000 shares) Cash Dr 5 660 000 Cash Trust Cr 5 660 000 (Transfer of trust funds) Application * Dr 2 460 000 Allotment Cr 2 160 000 Calls in Advance Cr 300 000 (Allocation of application across allotment and calls in advance) * refer to workings table at end of solution Share Issue Costs/Share Capital Dr 11 000 Cash Cr 11 000 (Payment of share issue costs $11 000) December 1 Cash Dr 1 840 000 Allotment Cr 1 840 000 (Cash received on allotment) 2019 February 1 Call 1 Dr 1 280 000 Share Capital Cr 1 280 000
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(Call of $1.60 per share) Calls in Advance Dr 160 000 Call 1 Cr 160 000 (Transfer of calls received in advance) March 1 Cash Dr 1 120 000 Call 1 Cr 1 120 000 (Cash received on 700 000 shares) June 1 Call 2 Dr 1 120 000 Share Capital Cr 1 120 000 (Call of $1.40 per share) Calls in Advance Dr 140 000 Call 2 Cr 140 000 (Transfer of calls received in advance) June 28 Cash Dr 980 000 Call 2 Cr 980 000 (Cash received on 700 000 shares) Workings Allocation of money received on application No. of Shares applied for No. of Shares
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