Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Jamaica Lid was incorporated on 1 July 2015 and on the same day, the company purchased the net assets of Smart Corporation by issuing 120

image text in transcribed
image text in transcribed
Jamaica Lid was incorporated on 1 July 2015 and on the same day, the company purchased the net assets of Smart Corporation by issuing 120 000 ordinary shares at a price of $8 per share. The shares were fully paid On 5 August 2015, the company issued a prospectus to the public, offering; 150,000 10% preference shares for $12 payable $8 on application and the remaining on allotment; as well as 250,000 ordinary shares at an issue price of $10, payable on the following terms; $3 on application . $3 on allotment $2 on call one $2 on call two. Call one was made one month after the date of allotment, and call two was made three months after the date of allotment. The issue was underwritten for a commission of $4,000. When applications closed on 30 August 2015, applications had been received for 120,000 preference shares and 300,000 ordinary shares, including one applicant for 25,000 ordinary shares who had paid in full. On 12 September 2015, the directors allotted the shares as follows; 1. Preference shares: the successful applicants were allotted the preference shares. 2. Ordinary shares: a. 25,000 ordinary shares were allotted to the applicant who paid for the shares in full. b. Applicants for 35,000 ordinary shares were refunded their application money in full. c. The remaining applicants were allotted the remaining ordinary shares. The excess application money on these shares was to be offset against the amount payable on allotment. The share issue costs were $3,200 and were paid on 20 September 2015. All allotment money was received by 25 September 2015 including the amount due from the underwriter. The underwriting commission was paid on this date. The two calls were made on the dates stated in the prospectus, and a month after, each call monies were received, except that the holders of 15,000 ordinary shares did not pay either call. In addition, a holder of another 10,000 ordinary shares did not pay the second call

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials Of Accounting For Governmental And Not-for-Profit Organizations

Authors: Paul Copley

14th Edition

1260570177, 978-1260570175

More Books

Students also viewed these Accounting questions

Question

Do not go, wait until I come

Answered: 1 week ago

Question

Pay him, do not wait until I sign

Answered: 1 week ago