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The following is an extract of the statement of financial position of a company as at 1st January 2014:
CURRENT ASSETS:
Bank $240,000
EQUITY& LIABILITIES:
ordinary share capital $ 1,000 per share $300,000
share premium $ 60,000During the year to 31st December, 2014 the company issued an additional 75,000 ordinary shares at $ 1,300 per share payable as follows:
On application $400
On allotment (including premium) $ 600
On 1st call $ 200
on final call $ 100Applications were received for 200,000 shares. the company rejected 50,000 applications and repaid the money to the applicants. The remaining shares were allotted on the basis of 1 for every 2 applied for.
The calls were duly made and the monies received.Required:
prepare the relevant ledger accounts to record the above transactionsFirstly, question could not be asked in Paper F3 (and you certainly cannot be asked to prepare ledger accounts at all in the exam!).
Secondly, I am sorry, but the purpose of this forum is not to expect full answers to test questions. You must have the answer in whichever book you found the question (if not, then you should be using books from one of the ACCA approved publishers).
You should use this forum to ask about problems you have having watched our free lectures, or problems you have understanding the printed answers in your books.Our free lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.
ok thanks mr john. i was going through some questions for company accounts mainly the calculations related to shares only that the way how that question was examined is different from the others that i have tried out.
Help sir, I will be glad if you could explain this question.
I learnt that bonus issue increases share capital why is the entry now show
Debit reserve and credit share capital. When credit share capital will reduce the share capital. For example, supposing $2500 was gotten after considering the bonus issue,
The double entry is debit reserve or share premium $2500
Credit share capital $2500.Share capital is a credit balance.
Therefore if there is a bonus issue we credit share capital (and the share capital increases).
Because no cash was received – the shares are given free – we debit reserves. We will usually debit share premium account (because this is a capital reserve and therefore it does not affect the amount that can be paid out as dividend). If there is not enough in the share premium account, we have no choice but to debit revenue reserves (retained earnings) but this will limit the amount of dividends that the company is allowed to pay.
For a full explanation with examples, you need to watch our free lectures on company accounts.
(Our lectures are a complete course for Paper F3 and cover everything needed to be able to pass the exam well).
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