On 30 September 2016, Jacaranda Ltd issued a prospectus calling for applications
ID: 2474586 • Letter: O
Question
On 30 September 2016, Jacaranda Ltd issued a prospectus calling for applications for 600 000 ordinary shares at an issue price of $3, payable $1.50 on application and $1.50 on allotment. By the closing date of 31 October 2016, the company had received the following application money:
From applicants for 500 000 shares
From applicants for 120 000 shares
$
750 000
360 000
On 15 November, it was decided to allot to applicants who paid more than the application money the number of shares applied for, and to applicants who paid only the application money 480 000 shares. Application money was refunded to 20 000 unsuccessful applicants.
The constitution gives the directors the power to apply excess application money to allotment. All other allotment money was received by 31 December 2016.
Required
Prepare the necessary ledger accounts to record the above transactions.
From applicants for 500 000 shares
From applicants for 120 000 shares
$
750 000
360 000
Explanation / Answer
31-Oct-16 Bank A/c 1,110,000 Share Application & Allotment A/c 1,110,000 (Being share application money received 500,000*1.5 and 120,000*3) 15-Nov-16 Share Application & Allotment A/c 1,080,000 To Share capital A/c 1,080,000 (Being allotment of share application money received 600,000*3) 15-Nov-16 Share Application & Allotment A/c 30,000 To Bank A/c 30,000 (refund of application money to unsuccessful applicants)
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