Braeden Manufacturing Ltd undertook a public share issue in 20X1. The general jo
ID: 2342195 • Letter: B
Question
Braeden Manufacturing Ltd undertook a public share issue in 20X1. The general journal entries for the share issue are presented below. The following additional information is also provided:
The entry on April 25th 20X3 is for the cost of the share re-issue.
All re-issued shares (April 15th 20X3) were fully paid to $22.00.
The general journal entries provided are the only ones dealing with share issues
The applicants for the share issue were a mixture of some who paid for their
shares in full and others who paid only the required application amount.
The applicants who paid only the required application amount were of two
groups. One group had their applications refused and their money refunded. The other group applied for more shares than available and they were issued shares in proportion to their applications.
REQUIRED
Using the general journal entries and the additional information provided and complete the questions which follow in the template provided as advised.
Using the general journal entries and the additional information provided and complete the questions which follow in the template provided as advised.
20X1
DR
CR
31 Oct
Bank Trust
284,000
Application
284,000
4 Nov
Application
120,000
Allotment
60,000
Share Capital
180,000
Application
164,000
Bank Trust
24,000
Allotment
60,000
Calls in Advance
80,000
Cash at Bank
260,000
Bank Trust
260,000
20X2
1st Call
160,000
1 Feb
Share Capital
160,000
Calls in Advance
70,000
1st Call
70,000
15 March
Cash at Bank
90,000
1st Call
90,000
1 July
2nd Call
40,000
Share Capital
40,000
Calls in Advance
4,000
2nd and Final Call
4,000
31 Aug
Cash at Bank
36,000
2nd Call
36,000
20X3
3rd and Final Call
60,000
31 Jan
Share Capital
60,000
Calls in Advance
6,000
3rd and Final Call
6,000
28 Feb
Cash at Bank
36,000
3rd and Final Call
36,000
15 April
Share Capital
66,000
3rd and Final Call
9,000
Forfeited Shares Liability
57,000
Cash at Bank
60,000
Forfeited Shares Liability
6,000
Share Capital
66,000
25 April
Forfeited Shares Liability
3,500
Cash at Bank
3,500
13 May
Forfeited Shares Liability
47,500
Cash at Bank
47,500
QUESTIONS
The following are questions which will need to be answered using the template.
1. How many shares were forfeited and then re-issued?
2. How much per share was required to be paid in the 3rd and Final Call?
3. How many shares were originally issued?
4. How much per share was required to be paid in the 2nd Call?
5. How much per share was required to be paid in the 1st Call?
6. How much per share was required to be paid on Application?
7. How much per share was required to be paid on Allotment?
8. What is the balance of the Forfeited Shares Liability at 30th June 20X3?
9. How many share applications were refused and refunded?
10. How many shares were originally applied for?
20X1
DR
CR
31 Oct
Bank Trust
284,000
Application
284,000
4 Nov
Application
120,000
Allotment
60,000
Share Capital
180,000
Application
164,000
Bank Trust
24,000
Allotment
60,000
Calls in Advance
80,000
Explanation / Answer
THE TEMPLATE IS MISSING. HOWEVER, I HAVE ANSWERED ALL THE REQUIREMENTS UPTO MARK.
1. Shares forfeited and re-issued= Share Capital increased on 15th April / $22
=$66,000 / $22 =3,000 Shares
2. 3rd & Final Call = $9,000/ 3,000 = $3 per share
3. Shares originally issued = (180,000+160,000+40,000+60,000-66,000) / $ 22 = 17,000 Shares
4. 2nd Call = $40,000 / (17,000+3,000) = $2 per share
5. 1st Call = $160,000/ (17,000+3,000)= $8 per share
6. Application = $120,000 / (17,000+3,000) = $6 per share
7. Allottment = $60,000 / 20,000 = $3 per share
8. Balance of Forfeited Shares Liability as at 30th June, 20X3 is 0.
9. Share Applications refused and refunded = $24,000 / $6 = 4,000 shares
10. Shares originally applied for = ($284,000-80,000) / $6 = 34,000 shares
9.
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