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Question 1 AKONFEM Ltd. is issuing 10,000 shares on the following terms: On Application Allotment First...
Question 1
AKONFEM Ltd. is issuing 10,000 shares on the following
terms:
On Application Allotment
First Call
GHC400 GHC300 GHC200 GHC100
Final Call
Applications have been received for 18,000 shares, which they
decided to deal with them as follows:
On 5th March 2014 they decided to reject applications for
3,000 shares and the monies so received are refunded
Applications for 6,000 shares were accepted in full and
Applications for 9,000 shares were accepted pro-rata. Any
excess application monies so received were transferred to allotment
and call accounts. Any excess application money still remaining is
to be repaid.
The allotment monies were due on March 30th 2014. The first
call was made on 5th May 2014. The final call was made on 1st June
2014, and on that date an applicant to whom 500 shares have been
allotted defaulted. The shares were subsequently forfeited and
re-issued to Opele at GHC 600 each payable on application.
Prepare the necessary ledger accounts and show the extract of
the Statement of Financial Position.
Solutions
Expert Solution
Number of Share Issued AKONFEM Ltd = 10,000 Shares
Number of Share Application Received = 18,000 Shares
Excess Share Application Received = 8000 Shares
18000 Share Applicant has been issed 10,000 Shares as follows :
| Category | Share Application | Share Issued | Share Application Vs Share Issued Ratio (Pro Rata) |
| Category -1 | 6000 Share Applicant | 6000 Share Issued | 1:1 |
| Category -2 | 9000 Share Applicant | 4000 Share Issued | 9:4 |
| Category -3 | 3000 Share Applicant | 0 Share Issued | Not Applicable |
Amount Payable as Follows :
| 05-Mar-2014 | Application | GHC 400 |
| 30-Mar-2014 | Allotment | GHC 300 |
| 05-May-2014 | First Call | GHC 200 |
| 01-Jun-2014 | Final Call | GHC 100 |
Journal Entry in the books of AKONFEM Ltd
| Date | Particlars | LF. | DR (GHC) | CR (GHC) | Calculation | |
| 5-Mar-2014 | Bank A/C Dr. | 7,200,000 | (400*18000) | |||
|
to Share Application Money (Being the Share Application money Received for 18000 Share Application @ GHC 400) |
7,200,000 | (400*18000) | ||||
| 5-Mar-2014 | Share Application A/C Dr. | 1,200,000 | (3000*400) | |||
|
to Bank A/C (Being Share Application money Rejected for 3000 Share @ GHC 400) |
1,200,000 | (3000*400) | ||||
| 5-Mar-2014 | Share Application A/C Dr. | 2,400,000 | (6000*400) | |||
|
to Share Capital A/C (Being Share Issued in full to 6000 Share Applicants) |
2,400,000 | (6000*400) | ||||
| 5-Mar-2014 | Share Application A/C Dr. | 3,600,000 | (9000*400) | |||
| to Share Capital A/c | 1,600,000 | (4000*400) | ||||
| to Share Allotment A/c | 1,200,000 | (4000*300) | ||||
|
to Share First Call A/c (Being 4000 Share Issued against the 9000 Share Applications & excess amount paid along with Share Application money adjusted in the Allotment & First Call) |
800,000 | (4000*200) | ||||
| 30-Mar-2014 | Share Allotment A/C Dr. | 3,000,000 | (10000*300) | |||
|
to Share Capital A/C (Being Share Allotment amount due on 10,000 Shares @ GHC 300 ) |
3,000,000 | (10000*300) | ||||
| 30-Mar-2014 | Bank A/c Dr. | 1,800,000 | (6000*300) | |||
|
to Share Allotment A/C (Being Share Allotment amount received, except from 4000 applicants whose excess application money adjusted in Allotment money ) |
1,800,000 | (6000*300) | ||||
| 5-May-2014 | Share First Call A/C Dr. | 2,000,000 | (10000*200) | |||
|
to Share Capital A/C (Being Share First Call amount due on 10,000 Shares @ GHC 200 ) |
2,000,000 | (10000*200) | ||||
| 5-May-2014 | Bank A/c Dr. | 1,200,000 | (6000*200) | |||
|
to First Call A/C (Being Share First Call amount received, except from 4000 applicants whose excess application money adjusted in First Call) |
1,200,000 | (6000*200) | ||||
| 1-Jun-2014 | Share Final Call A/C Dr. | 1,000,000 | (10000*100) | |||
|
to Share Capital A/C (Being Share Final Call amount due on 10,000 Shares @ GHC 100 ) |
1,000,000 | (10000*100) | ||||
| 1-Jun-2014 | Bank A/c Dr. | 950,000 | (9500*100) | |||
| Calls in Arrear A/c ** Dr. | 50,000 | (500*100) | ||||
|
to Final Call A/C (Being Share Final Call amount received, except from shareholder holding 500 shares) |
1,000,000 | (10000*100) | ||||
| 1-Jun-2014 | Share Capital A/C Dr. | 500,000 | (500*1000) | |||
| to Forfeited Share A/c | 450,000 | (500*900) (Paid Amount = Application+Allotment+First Call) | ||||
|
to Calls in Arrear A/c (Being Share 500 share forfeited of shareholder defaulted in payment of Final Call ) |
50,000 | (500*100) (Unpaid Amount = Final Call) | ||||
| 1-Jun-2014 | Bank A/C Dr. | 300,000 | (500*600) | |||
| Forfeited Share A/c Dr | 200,000 | (500*400) | ||||
|
to Share Capital A/c (Being 500 forfeited share reissued @ GHC 600 ) |
500,000 | (500*1000) | ||||
| 1-Jun-2014 | Forfeited Share A/c Dr | 250,000 | (500*500) | |||
|
to Capital Reserve
A/c (Being profit on 500 forfeited share transferred to Capital Reserve A/c ) |
250,000 | (500*500) | ||||
|
** Note 1 : Assumtion has been taken that shareholder who have
not paid Final call money belong to the category -1 & therefore
Share applied & share allotment will be same for him  ekkarill92 answered 2 years agoRelated SolutionsQuestion 1 AKONFEM Ltd. is issuing 10,000 shares on the following terms: On Application Allotment First...
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On Application Allotment
First Call
GHC400 GHC300 GHC200 GHC100
Final Call
Applications have been received for 18,000 shares, which they
decided to deal with them as follows:
On 5th March 2014 they decided to reject applications for
3,000 shares and the monies so received are refunded
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