ohanson Limited is company incorporated on 1 January 2018. A prospectus was issued inviting application for 200,000 shares, at an issue price of $20, payable $10 on application, $5 on allotment and $2.50 each on two calls to be made at intervals of 2 months after the date of allotment.
This research question consists of a case study: You are a graduate accountant who has completed your Bachelor of Business Studies at Business School .
You are now working in the accounting team for Johanson Limited. The address of the firm is 12 Eagle Street, Brisbane Qld 4000.
Directors have approached the accounting team managed by Ms. Renee Johanson to assist and record the general journal entries on the raising of company funds by the issue of shares by instalments. Associated with the share issue.
The following transactions occurred in relation to the issue of shares by instalment, oversubscription, forfeiture and reissue of shares
1 January 2018
Johanson Limited incorporated. Prospectus issued inviting application for 200,000 shares. Issue Price of $20. Payable $10 on application; Payable $5 on allotment; and $2.50 each of two calls
1 March 2018
Applications were received for 240,000 shares
4 April 2018
Directors allotted 200,000 to the applicants in proportion to the number of shares for which applications had been made. The surplus application money was offset against the amount payable on allotment.
10 April 2018
The balance of the allotment money was received.
11 April 2018
Legal costs of forming the company of $3,000 was paid as well as share issue costs of $1,000.
2018 First call was made on 200,000 shares but the holders of 20,000 shares did not pay call monies.
4 July 2018
Second call was made on 200,000 shares but the holders of 30,000 shares did not pay call monies on the second call.
4 October 2018
As provided for in the company's constitution, the directors forfeited the 50,000 shares on which calls were unpaid.
19 October 2018
The forfeited shares were reissued as fully paid for a consideration of $18 per share. Costs of the forfeited shares were reissue amounted to $500. The company's constitution does not provide for refund of any balance in the forfeited shares account after reissue to former shareholders.
A. Provide general journal entries for the above transactions.
B. Prepare the equity section of Johanson Limited in the Balance Sheet on completion of all transaction. The equity section to be prepared as at the 19 October 2018. (Ledger accounts are not required but may be helpful in preparing journal entries)
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