You are employed as an accountant by a new company called Refresh Ltd. The company was...
You are employed as an accountant by a new company called Refresh Ltd. The company was incorporated on 1 July 2018 and is now trying to raise some new equity.
By 31 July 2018, applications had been received for 6,000,000 shares. On 10 August 2019, 5,000,000 shares were allotted in proportion to the number of shares for which applications had been made. The excess application money was retained and offset against the amount payable on allotment.
As the accountant of Refresh Ltd, prepare the journal entries necessary to account for the above transaction and event.
Homework Answers
| ASSUED SHARE VALUE | 10.00 | |
| APPLICATIO MONEY | 3.00 | |
| ALLOTMENT | 7.00 | |
| CASH | 1,50,00,000.00 | |
| TO SHARE APPLICATION MONEY | 1,50,00,000.00 | |
| (BEING OUT OF TOTAL COLLECTION ONLY UPTO 15000000 IS FOR SHARE APPLICATION) | ||
| CASH | 30,00,000.00 | |
| TO SHARE ALLOTMEN MONEY | 30,00,000.00 | |
| (BEING AMOUNT EXCESS COLLECTED TREATED AS SHARE ALLOTMENT MONEYT) | ||
| SHARE APPLICATION MONEY | 1,50,00,000.00 | |
| SHARE ALLOTMENT MONEY | 30,00,000.00 | |
| TO SHARE CAPITAL | 1,80,00,000.00 | |
| ( BEING AMOUNT IS TRASFER TO SHARE CAPITAL) | ||
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