Provide journal entries for the following transactions: 1. The Cheung Company issues 10 000 ordinary shares...

Provide journal entries for the following transactions:

1. The Cheung Company issues 10 000 ordinary shares for $30 per share. The investors are required to pay $12 on application, $10 on allotment and an $8 call. Applications are received by 1st January. Allotments are made on 14th January with all allotment money received by 30th January. The call was made on 1st May and payment was due by 14th May. On 14th May it was discovered that a holder of 500 shares did not pay the call. The shares were forfeited and subsequently reissued at $24 per share on 30th May. On June 1st any remaining cash in the forfeited share reserve is refunded.

2. Cheung Company declared a cash dividend of $1 per share on 30th July, recorded shareholders details on 15th August, and paid the dividend on 1st September.

3. Cheung engaged in a share buyback on 1st December buying 500 shares at $30 each.

Solutions

Expert Solution

Jan-01	Cash	$ 1,20,000.00
	Share Application		$ 1,20,000.00

Jan-14	Share Allotement	$ 1,00,000.00
	Share Capital		$ 1,00,000.00

Jan-30	Cash	$ 1,00,000.00
	Share Allotement		$ 1,00,000.00

May-01	Share First Call A/c	$ 80,000.00
	Share Capital		$ 80,000.00

May-14	Cash	$ 76,000.00
	Share First Call A/c		$ 76,000.00

May-14	Share Capital	$ 15,000.00
	Share Forfieted A/c		$ 11,000.00
	Share First Call A/c		$ 4,000.00

May-30	Bank	$ 12,000.00
	Share Forfieted A/c	$ 3,000.00
	Share Capital		$ 15,000.00

May-30	Share Forfieted A/c	$ 8,000.00
	Capital Reserve		$ 8,000.00

Jun-01	Capital Reserve	$ 8,000.00
	Bank		$ 8,000.00

Jul-30	Retained Earnings	$ 10,000.00
	Dividend Payable		$ 10,000.00

Aug-15	Dividend Payable	$ 10,000.00
	Cash		$ 10,000.00

Dec-01	Treasury Stock	$ 15,000.00
	Cash		$ 15,000.00

ekkarill92 answered 1 year ago

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