(ii) Concept of ‘share forfeiture and re-issue’ :
Forfeiture of shares refers to the cancellation of shares due to non payment of money due on allotment or calls on the due date. On forfeiture, the company extinguishes the title of such shareholder. The company re-issue the forfeited shares and disposes them off at any price but the total amount received on these shares should not be less than the amount in arrears on these shares.
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Case No.1 Oman Oil Limited issued 80,000 shares of OMR 10 each, at par payable as...
Cumnor Hill Ltd issues 1 million redeemable preference shares of $2.00 each on 1st July 2019. The shares offer a rate of return of 7 per cent per annum. The shares are redeemed at the option of the shareholders on 30th June 2021 Required: a) Would you classify these preference shares as debt or as equity? Why? (1 mark) b) Provide the journal entries to account for the issue and subsequent redemption of the shares, assuming that the issue was...
Jenny Ltd’s equity at 30 June 2019 was as follows: 200 000 ordinary shares, issued at $3.20, fully paid 250 000 ordinary shares, issued at $4, called to $2.40 180 000 redeemable preference shares, issued at $1, fully paid Calls in advance (5 000 ordinary shares) Share issue costs General reserve Retained earnings $640 000 600 000 180 000 8 000 (7 000) 60 000 310 000 The following events occurred during the year ended 30 June 2019: 2018 July...
QUESTION 2 (25 MARKS) The following items were disclosed in the Statement of Financial Position of Adanees Berhad as at 31 October 2015 Adaness Berhad Statement of Financial Position as at 31 October 2015 RM 200,000 Authorised Capital 200,000 5% Redeemable preference shares of RM 1 00 each 300,000 Ordinary shares of RM2.00 each 600,000 800,000 Issued Shares Capital 200,000 300,000 000 5% Redeemable preference shares of RM 1 .00 each 200, 150,000 Ordinary shares of RM2.00 each Reserves 116,000...
QUESTION ONE Masaba Company Ltd. is a retail provider with an authorised share capital of 800,000 Sh.20 ordinary shares and 250,000 8% Sh.20 redeemable preference shares. The following financial information reflects the position of the company as at 31 December 2018 after preparing the Trading, profit and loss account: Sh. `000' Provision for depreciation Fittings 1,500, Motor vehicles 3,740 Goodwill 1,200 Issued share capital: 600,000 Sh.20 Ordinary shares 12,000 250,000 Sh.20 Redeemable preference shares 5,000 Share premium account 400...
• Prepare the general journal entries to record the above independent scenarios. • Narrations to general journal entries must be provided. • Complete and detailed workings/calculations must be shown. • Absence of workings/calculations may lead to zero marks allocated to the particular general journal entry, despite the fact that the entry might be correct! PLEASE answer scenario5 to 7 thank you very much The directors issued a prospectus offering 40,000 ordinary shares at an issue price of $2.80, payable $2...
Part a Donahue Ltd purchased a plant on 1 July 2018 for N$300 000. The entity incurred transfer fees of N$90 000. The expected dismantling cost at the end of the useful life of the plant is N$200 000. The applicable discount rate after tax (tax rate 25.75%) 6.3% Useful life 12 years The plant is erected on rented premises and the rental agreement requires dismantling of the plant at the end of its useful life. Assume that Inland Revenue...
Question 2 [15 marks] Topic 4: Accounting for equity Victoria Ltd was incorporated on 1 September 2018 and its constitution states that the company can issue the following shares: ▪ 3,000,000 ordinary shares; and ▪ 1,000,000 preference shares (non-voting) The following events took place during the financial year ended 30 June 2019. 13 September Issued a prospectus inviting the public to subscribe for 1,500,000 ordinary shares at an issue price of $3.50 each, with $2 due on application, $1 due...
Abdul LLC has been into hotel Business for nearly 14 years. Their hotels include luxury and boutique hotels incorporating one of the finest services in Oman attracting customers not only from Oman but also from all over the world visiting the country. Apart from accommodation, they offer services which include restaurants, spas and beauty therapy treatments, swimming pools, tennis and badminton courts. In 2018, they are ranked one of the top 10 best hotels in Oman Huge customer base and...
NewCat Ltd, a manufacturer and retailer for pet products, commenced operations on 1 July, 2018 by issuing 100 000 $2.00 shares, payable in full on application. There were no share issue costs For the year ending 30 June 2019, the company recorded the following aggregate transactions S'000 4 265 1 800 723 285 130 95 212 210 120 Accounts les Cost of sales Other income Administration charges Selling and distribution expenses Employee entitlement expenses - (selling) Wages and salaries -...
a) Kunal plc issued £6 million 6% convertible bonds on 1 January 2017 at par. The bonds are redeemable at par on 31 December 2020 or convertible at that date on the basis of 120 £1 ordinary shares for every nominal £100 of bonds. At the date of issue the prevailing market rate for similar debt without conversion rights was 8%. The interest due was paid on 31 December 2017 and recorded within finance costs during the year. Required: Explain...