Question

Problem 5 (18 marks) Bunny's International is a public company. The following information relates to Bunny's International's equity at 30 June 2018. Issued capital: 500 000 ordinary shares issued at $1.00, fully paid Retained earnings General reserve $ 500 000 350 000 100 000 The following events took place after 30 June 2018. 2018 1 September Final dividends of 8c per share out of retained earnings were declared for the year ended 30 June 2019. 15 October 11 December Paid for dividends declared on 1 September in cash. A prospectus was issued inviting subscriptions for 100 000 ordinary shares at an issue price of $1.00, payable 60c on application and 40c on allotment. 2019 18 January 20 January Applications closed. Applications for a total of 100 000 shares were received. Applicants for 10 000 shares had paid in full on application. Shares applied for were allotted, with excess application money being applied to allotment. The balance of allotment money due was received. A bonus issue of one ordinary share (valued at $1.20) for every 10 ordinary shares held was made from the general reserve. 15 February 30 June Required (a) Prepare the general journal entries to record the above events. Indicate the transaction dates; no narration required. (18 marks)

Answer 1

			Bunny's International
			Journal Entries
S.No	Date	Particulars					Amount
1	01-Sep-18	Equity Final Dividend A/C Dr					40000 $
			To Equity Dividend Payable A/C				40000 $
2	01-Sep-18	Profit & Loss A/C Dr					40000 $
			To Equity Final Dividend A/C				40000 $
3	15-Oct-18	Equity Dividend Payable A/C Dr					40000 $
			To Cash/Bank A/C				40000 $
4	18-Jan-19	Cash/Bank A/C Dr					64000 $
			To Equity Share Application A/C				60000 $
			To Call in Advance A/C				4000 $
5	18-Jan-19	Equity Share Application A/C Dr					60000 $
			To Equity Share Capital A/C				60000 $
6	20-Jan-19	Equity Share Allotment A/C Dr					40000 $
			To Equity Share Capital A/C				40000 $
7	20-Jan-19	Call in Advance A/C Dr					4000 $
			To Equity Share Allotment A/C				4000 $
8	15-Feb-19	Cash/Bank A/C Dr					36000 $
			To Equity Share Allotment A/C				36000 $
9	30-Jun-19	General Reserve A/C Dr					72000 $
			To Bonus To Shareholders A/c				72000 $
9	30-Jun-19	Bonus to Shareholders A/C Dr					72000 $
			To Equity Share Capital A/C				72000 $