Issue of shares

JB Milks Ltd invited applications for 300,000 5% Preference shares of $1 each at $1.40, payable:

40% on application,

80% on allotment (including premium)

20% on first and final call

All the allotment money was received but a holder of 10,000 shares failed to meet the call and forfeited his shares in accordance with the articles of the company. All forfeited shares were subsequently re-issued as fully paid shares at 80 cents each.

Required:

A. i. Prepare the following Accounts:

ii. Application & Allotment Account

iii. Preference Share Capital Account

iv. Share Premium Account

v. Bank Account

vi. First & Final Call Account (

vii. Investment: Own Share Account

B. Explain the following terms:

1. Forfeiture

ii. Redemption of shares

iii. Earnings per Share