Share capital of a company, Cost Accounting

A company has an authorized share capital of 250 million divided into 1,500,000 ordinary shares of sh.100 each and 1,000,000 preference shares of sh.100 each. 1,000,000 ordinary shares were offered for subscription at sh.150 each payable as follows: on application sh.40, on allotment sh.70 (including premium), on first call sh.30, on final call sh.10.

 Applications were received for 1,500,000 shares. The management rejected application for 100,000 shares for which they returned the money.

The successful applicants were issued with 5 shares for every 7 applied for and the balance of the application money was transferred to allotment.

The first call was made in November and the amounts received except for 50,000 shares.

The amount due to final call was also received except for 100,000 shares.

It was resolved that the shares be forfeited and be re-issued to Mr. Rich for sh. 60.

Required: Journal entries to record the above

Posted Date: 4/1/2013 2:47:38 AM | Location : United States

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