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Sir I m still confused in this , please answer me these 3 parts separately
a)If private company receive goods or services with a fair value of $600 but valued for the purposes at $500 and issue 350 $1 shares , Sir here between company and member who is receiving adequate consideration and who is receiving inadequate consideration? And here company is accepting goods at undervaluation na?
b) If private company receive goods or services with a fair value of $300 but valued for the purposes at $500 and issue 350 $1 shares , Sir here between company and member who is receiving adequate consideration and who is receiving inadequate consideration? And here company is accepting goods at overvaluation na?
c) When we say that private company can issue shares for inadequate consideration by acceptance of goods or services at overvaluation/undervaluation, so here whether private company accept goods at overvaluation or accept goods at undervaluation, in both cases consideration received by private company wold be inadequate?
a) not relevant to F4 – what a private company chooses to do and with whom they choose to do it is of absolutely no relevance nor interest to me, nor the F4 examiner, nor the thousands of other F4 students around the World.
Time to drop the subject I think 🙂
OK?
I have already illustrated the problem for you – if I transfer ownership of a $3 waste paper basket to a private company and, in exchange, they issue 300 shares each with a nominal value of $1, then that’s a valid transaction
Their double entry would be Dr Fixtures and Fittings $300, Cr Share Capital $300
BUT IT WON’T HAPPEN IN F4, SO MOVE ON!
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