Share capital 2 988 000 All ordinary shares issued and paid to 5 less issue

Share capital 2 988 000 all ordinary shares issued

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Share capital $2 988 000 (All ordinary shares, issued and paid to $5, less issue costs of $12 000) Retained earnings $7 600 400 $10 588 400 On 1 October 2018, Acacia Ltd issued a prospectus for applications for 200 000 ordinary shares to the public at an issue price of $7, payable $2.50 on application, $1.50 on allotment and the remaining $3 in 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 and issue shares to the remaining applicants. Share issue costs of $4000 were paid on 5 December. All outstanding allotment money was received by the 1 January 2019. The first call for $2 was made on 1 February 2019 with all money received by 20 February. The final call for $1 was made on 20 June 2019. At 30 June 2019 this call money had not been received in relation to 25 000 shares. Required A. Prepare the journal entries to record the transactions of Acacia Ltd as outlined above. (Show all workings.) B. Calculate the amount of share capital in the statement of financial position of Acacia Ltd as at 30 June 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 for 80 000 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 on application. According to the company’s constitution, all surplus money from application can be transferred to Allotment and/or Call accounts. ACACIA LTD (i) 201 8 To 1 Dec Cash Trust Dr 600 000 Application Cr 600 000 (being receipt of applications) 5 Dec Application Dr 500 000
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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) 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 Cash Dr 400 000 Call Cr 400 000 (being receipt of call money) 20 June Second (or Final) Call Dr 200 000 Share Capital Cr 200 000 (being final call for $1) To 30 June Cash Dr 175 000
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Second (or Final) Call Cr 175 000 (being receipt of call money) (ii) The amount of share capital in the statement of financial position of Acacia Ltd as at 30 June 2019 is $4,659,000. Beg balance $2,988,000 + new share issue 1,400,000 (200,000 * $7) -less costs (4,000) -less calls in arrears (25,000) Total $4,359,000 (iii) Entries changed as below. (Note: the entries for calls would not change; nor would the total amount of share capital at 30 June 2019).
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