The authorised and issued share capital of Cosy Fires Ltd was £75,000 divided into 75,000 ordinary shares of £1 each, fully paid. On 2 January 2007, the authorised capital was increased by a further 85,000 ordinary shares of £1 each to £160,000. On the same date 40,000 ordinary shares of

£1 each were offered to the public at £1.25 per share payable as to £0.60 on application (including the premium), £0.35 on allotment and £0.30 on 6 April 2007.

The lists were closed on 10 January 2007. By that date, applications for 65,000 shares had been received. Applications for 5,000 shares received no allotment and the cash paid in respect of such shares was returned. All shares were then allocated to the remaining applicants pro rata to their original applications, the balance of the monies received on applications were applied to the amounts due on allotment.

The balances due on allotment were received on 31 January 2007, with the exception of one allottee of 500 shares and these were declared forfeited on 4 April 2007. These shares were reissued as fully paid on 2 May 2007, at £1.10 per share. The call due on 6 April 2007 was duly paid by the other shareholders.

You are required:

(a) to record the above-mentioned transactions in the appropriate ledger accounts; and

(b) to show how the balances on such accounts should appear in the company’s balance sheet as at 31 May 2007.