Novinta plc issued 1,000,000 equity shares of £1 each at a premium of 30p. The cash payments are due as follows:
On application – 45p (including 30p premium). One of the terms of the issue was that amounts overpaid would be retained and used to reduce the future sums due on allotment and on call. Any surplus funds over and above this would be returned on the allotment date.
On allotment – 60p
On call two months after – 25p
The response to the advertisement of the issue and the prospectus was as follows:

Veronica subscribed £8,000 on an application for 20,000 shares. She was unable to meet the balance due on the allotment of 10,000 shares. These shares were forfeited after the final call date. All the other shareholders met the claims on the shares on the relevant dates (on allotment and on call). One month after the final call date, the company reissued the 10,000 shares as fully paid to Henrik and received a cheque for £13,000 in full settlement on the day of allotment.

Required
a. Prepare the journals recording how the above transactions would be recorded in Novinta plc’s financial statements.
b. Show the resultant ledger entries for the above transactions.
c. Prepare a statement on the date of allotment showing the overpayments or underpayments in respect of each category of applicant.

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Number of shares applied for by applicants 20,000 200,000 800,000 Number of applicants applying 40 20 1 Percentage allotted to each applicant 50% 10% 25%