Question

Adelaide Briton Ltd was registered on the first of July 2020. The company’s directors issue a disclosure document inviting applicants for 2 000 000 ordinary shares for an issue price of $1. The share is payable 60c on application and 20c on allotment. Adelaide Briton Ltd reserves the right to allot to individual applicants on a pro rata base, a lesser number of shares than the number applied for, and may apply excess application monies to the allotment and to calls in advance. The company’s director must allot exactly 2 000 000 shares. First Scenario: Applications for 2 200 000 shares are received with the correct application money. Second Scenario: Applications for 2 750 000 shares are received with the correct application money. Required: For each of the above scenarios: Calculate the amount of application money that would be applied to application and calls (including allotment). Prepare journal entries.

can u do it on pc / microsoft word

Answer 1

Answer:-

Senario	Issue of Shares	Application Received	Total Application Money Received	Actual Share Alloted	Application Money Use	Excess	Use on Allotment	Refund
I	2,000,000.00	2,200,000.00	132,000,000.00	2,000,000.00	120,000,000.00	12,000,000.00	12,000,000.00	-
II	2,000,000.00	2,750,000.00	165,000,000.00	2,000,000.00	120,000,000.00	45,000,000.00	40,000,000.00	5,000,000.00

Journal Entries

Senario I :-

Journal Entries	Amount Dr.	Amount Cr.
Bank A/c                                                        Dr	132,000,000.00
To Share Application A/c		132,000,000.00
(Being Share Application money Received)
Share Application A/c                                   Dr	132,000,000.00
To Share Capital A/c		120,000,000.00
To Share Allotment A/c		12,000,000.00
(Being Application money transfer to capital and excess amount hold for allotment)
Share Allotment A/c                                        Dr	40,000,000.00
To Share Capital A/c		40000000
(Being Share Allotment money due)
Bank A/c                                                         Dr	28,000,000.00
To Share Allotment A/c		28000000
(Being allotment money received and adjusted)

Senario II :-

Journal Entries	Amount Dr.	Amount Cr.
Bank A/c                                                        Dr	165,000,000.00
To Share Application A/c		165,000,000.00
(Being Share Application money Received)
Share Application A/c                                   Dr	165,000,000.00
To Share Capital A/c		120,000,000.00
To Share Allotment A/c		40,000,000.00
To Bank A/c		5,000,000.00
(Being Application money transfer to capital and excess amount hold for allotment and refunded)
Share Allotment A/c                                        Dr	40,000,000.00
To Share Capital A/c		40000000
(Being Share Allotment money due)