- 15 Marks
FA – May 2013 – L1 – SB – Q5 – Accounting Concepts
This question asks for journal entries to record share transactions in Xeloz Limited's books following an issue of 1,000,000 shares.
Question
Xeloz Limited offered to the public 1,000,000 ordinary shares of ₦1 each at ₦1.30 payable as follows:
- On Application: 30k
- On Allotment: 50k (premium inclusive)
- First call on shares: 30k
- Second call on shares: 20k
Applications were received for 1,420,000 shares, and the directors decided to deal with the applications on the following basis:
i. Applications for the first 600,000 shares were accepted in full.
ii. The next 800,000 applications were scaled down, so that for each two shares applied for, only one was allotted.
iii. Applications for 20,000 shares were rejected.
You are required to:
Prepare journal entries to record the above transactions in the books of Xeloz Limited. (15 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: Application and Allotment, Premium, Share Issue
- Level: Level 1
- Topic: Accounting Concepts
- Series: MAY 2013
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