Question

QUESTION 4 La Sfera Co was formed on July 1, 2014. The company reported the following summarized statement of financial position at July 1, 2017: RM Assets Cash 472.000 Other assets 1.680.000 Total assets 2.152.000 Liabilities and Equity Liabilities Other liabilities 546,000 Ordinary dividend payable 35,000 Shareholders' equity 7% preference shares, 300,000 authorised, 50,000 issued 250,000 Ordinary share, 500,000 authorised, 250,000 issued 750,000 Retained earnings 571,000 Total liabilities and equity 2.152,000 The following transactions occurred during the financial year but have not been recorded: July 1, 2016 Paid dividends payable to shareholders. Aug 15, 2016 Issued 50,000 ordinary shares to the public for RMS per share. The company incurred RM4,000 on the costs of issuance of shares Nov 23, 2016 Offered right issue to existing shareholders, with the right to purchase one shares for every 80 shares held Market price on the date was RMS. All offers were taken up Feb 1, 2017 Obtained a 6-month loan amounting RM 25,000 from June Bank at 4% per year to expand the business Mar 7, 2017 Declared and distributed one-for-fifty share dividend to shareholders on record. Market value per share was RM6. The company used its retained carnings for the purpose of giving bonus share. May 18, 2017 Declared cash dividend to ordinary shareholders of RM0.20 per share, subject to approval at the forthcoming annual general meeting June 1, 2017 Issued 10% three-year bonds pavable with a RMISO,000 par value at the price of RM133, 540. The current market interest rate is 12% June 30, 2017 Payment of cash dividend to ordinary shareholders has been approved. The money will be credited to ordinary shareholders in July 15, 2017 Paid preference dividend

1) Journalise the above transactions

2) Prepare the updated statement of financial position as at 31 December 2017

Answer 1

solution Given that toansactions Credit (RM) 1 Journalise the above Date pasticulars Dividend payable cash (dividend payable Debit (RM) 35000 1-Jul 35.000 paid) 15-Aug cash 250000 share capital LS0000 Premium on share capital 100.000 (share capital issued at Premium with $3 per shage Par value shape Issue Expenses 15-Aug 4000 cash 4000 (share issue expenses) 23-NOU cash 18750 share capital 11250 7500 Premium on share capital Goight share issued as 000 feb Cash

25000 Loan 7-mar Croan deceived recorded) Retained Earning 36450 common stock Dividend payable Premium on shape capital 18225 (stock dividend issued with shage value deemed to be RM3) 18225 60750 18-may 60750 Retained taonings pividenda payable (dividend de clased pecorded) 133540 1-Jun 13350 cash 0 % Bonds pagable (bonds payable issue seconded) Dividend payable 60750 15-Jul cash 60750

2) poepage the updated statement of tinarčíal Pesition as at 31 December Paoti clllaos Amount RM 7aa5uo Assets Cash other assets Total assets 1680.000 2479540 Liability and equity Liabilities Otheo liabilities . 571000 104. Bonds pagable 133540 Shareholder's equity 74 Poeference shares, 3,00,000 authorised, 50.000 issued 250.000 Oodina ng Shaol, 500000 authorised 2.50,000 issued 929475 shaol Premium 125725 Detained earnings 469,800 Total liabilities 2479540 and equity. Total assets as otheo asserst Cash - 799540+1680000 - 2479540 Total liabilities and equity> 57000+ 1335407 2500007929475 125795 +469800 - 2479540