Question

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.

Answer 1

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 ** Note 2 : In case if we take assumption that defaulting shareholder belongs to category 2 in that case share applied & share alloted will not be the same , applying category 2 pro rata ratio i.e. 9:4, share that would have been alloted to him comes to 222 Share {(5 ekkarill92 Next > < Previous Related Solutions Question 1 AKONFEM Ltd. is issuing 10,000 shares on the following terms: On Application Allotment First... 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