Prepare general journal entries, Financial Accounting

Assessment Criteria:

Student work will generally be assessed in terms of the following criteria:

1. Preparation of correct journal entries.

2. Accumulation of journal entries into an extract of the balance sheet.

3. Demonstration of understanding of the share and debt issue process.

XYZ Limited had the following Balance Sheet as at 29 June 20x1.

XYZ Ltd

Balance Sheet as at 29 June 20x1

 

$

$

Assets

   Cash

   Land

   Machinery

Less Accumulated depreciation

 

 

 

 

400,000

100,000

 

140,000

250,000

 

300,000

Intangibles

   Patents

   Goodwill

 

 

50,000

20,000

 

 

70,000

Total assets

 

 

760,000

Equity

   Share capital

      400,000 ordinary shares, 60c uncalled (issue price $1)

      Paid-up capital - forfeited shares

 

 

 

160,000

50,000

 

 

 

210,000

   Reserves

      Asset revaluation reserve

   Retained profits

 

 

 

300,000

250,000

Owners' equity

 

 

760,000

PART A:  20x1 year

The directors do the following as at 30 June 20x1, the annual reporting date:

Revalue land to fair value of $300,000; and Use the asset revaluation reserve to increase the paid-up amount of ordinary shares by 20c (shareholder authorisation not required).

The directors wish to do the following:

  • Pay a cash dividend of $100,000 from retained profits on the 400,000 existing ordinary shares;
  • Apply the remainder of the asset revaluation reserve to make a bonus issue of 220,000 fully paid ordinary shares issued at $1; and
  • Transfer the remaining amounts in retained profits to a general reserve.

Under the company's constitution, the issue of bonus shares must be approved by a general meeting.  Approval was given on 1 August and the changes were put into effect and journalised on 15 August.

PART B: 20x2 year

The following takes place during the financial year:

  • 1 July - A disclosure document invites application for 60,000 preference shares with an issue price of $1.20 payable 70c on application and 50c on allotment.
  • 31 July - Applications are received for 95,000 preference shares, together with correct application monies.
  • 1 August - The directors resolve to reject the last received applications for 5,000 shares, and for the remainder to allot shares on the basis of two shares for every three applied for, surplus application monies being taken to the allotment.
  • 15 August - All outstanding allotment monies are received.

PART C: 20x3 year

The following takes place during the financial year:

  • 1 January - A call of 20c per shares is made on ordinary shares which are not fully called.
  • 31 January - All call monies are received except in respect of a parcel of 2,000 ordinary shares
  • 19 February -The directors resolve to forfeit shares on which there are calls in arrears.

REQUIRED:

a) Prepare general journal entries to record the above data for XYZ Ltd for 20x1, 20x2 and 20x3 only.

b) Prepare an extract from the Balance Sheet showing owners' equity as at 3 April 20x3.

Posted Date: 2/21/2013 5:28:47 AM | Location : United States







Related Discussions:- Prepare general journal entries, Assignment Help, Ask Question on Prepare general journal entries, Get Answer, Expert's Help, Prepare general journal entries Discussions

Write discussion on Prepare general journal entries
Your posts are moderated
Related Questions
Suppose the interest rate for a one-period bond is 4%. (a) What is the price of an asset paying (1,1,1) which means 1 after 1 period, 1 after 2 periods, and 1 after 3 periods.

Will you please summarize this mission statement of AICPA'S "The AICPA's mission is to provide members with resources, information and leadership that enable them to provide val

Calculate the claim under insurance policy: 1) What do policy limits of 200/300/100 on an automobile insurance policy mean?Your automobile insurance policy contains policy lim

The existing company WACC replicates the company's current gearing level and its existing Ke and Kd and the Ke in turn reflects the shareholders' risk perception of the company's e

The City of Miami must replace a number of its concrete mixer trucks with new trucks. It has received two bids and has evaluated closely the performance characteristics of the seve

1. Briarcrest Condiments is a spice-making firm. Recently, it developed a new process for producing spices. The process requires new machinery that would cost $2,218,246. have a

Illustrations of Dissolutions X, Y and Z have been trading as partners sharing profits and losses in the ratio of 2:2:1 on the 1st July 2005, they decided to dissolve the partn

Jaedan Industries has the following account balances as of December 31, 2010.  The firm's dividend payout ratio is 25% and the tax rate is 34%.  The firm's stock price on December

A company declared a $.50per share cash dividend on December 1,2013. The Company has 20,000 shares authorized, 9,000 shares issued, and 8,000 shares of common stock outstanding. Pr

Wright Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $243,339, $313,087, and $415,174, respectively