Question

Study Hard Ltd has share capital of $2.7 million (1,200,000 shares) on 30 June 2012. At that date it also had a general reserve of $300,000 and retained profit of $640,000. On 1 September 2012, the directors authorised a public share issue on the basis of 200 000 shares. The shares were offered for subscription at $2 per share on application and $0.5 per share on call. The offer closed on 1 October 2012 with applications for 220 000 shares. Excess application monies were refunded on a pro rata basis. A call was made on the 4 November 2012.The call money was received on 28 November 2012 on all shares. On 4 February 2013 an interim dividend of 5 cents per share was paid on all shares (paid out of the retained earnings). Profit after tax for the year ended 30 June 2013 was $750,000. A final dividend was declared on all shares 30 June 2013 of 7.5 cents per share from retained earnings and $100,000 was transferred from the general reserve.

REQUIRED: Record general journal entries for above transactions for the year ended 30 June 2013.

Answer 1

Date	Particulars	Debit ($)	Credit ($)
Oct 1,2012	Cash trust	440,000
	Share application (220,000*2)		440,000
	(To record share application in escrow account)
4/10	Cash at bank	400,000
	Cash trust		400,000
	(To record application receipt)
	Share application	40,000
	Cash Trust		40,000
	(To refund the application money)
4/11	Calls- ordinary	100,000
	Share capital		100,000
28/11	Cash at bank	100,000
	Calls-ordinary		100,000
	(To record calls ordinary)
04/02	Retained profit	70,000
	Interim dividend payable		70,000
	(To record dividend payable)
	Interim dividend payable	70,000
	Cash at bank (1400,000* 0.05)		70,000
	(To record dividend payment)
30/06	P/L summary	750,000
	Retained earnings		750,000
	Retained earnings	105,000
	Final dividend Payable		105,000
	General reserve	100,000
	Retained earnings		100,000
	(To record closing entries)