P$18-2$

Tabby Limited was incorporated on $15$ February $20$X$6$ with an authorised capital of

C$1500000$ consisting of $1000000$ ordinary shares and $5000008\%$ non$-$redeemable

preference shares

In March $20$X$6$ the directors issued:

$100000$ ordinary shares to the incorporators for C$1$ each

$600000$ ordinary shares to the public for $C1,20$ each

$200000$ preference shares for C$1$ each

The closing date for all applications was $25$ April $20$X$6.$

The entire issue was underwritten by Felix Bank Limited for a commission of $2\%$ of the

issue price. The incorporators paid for their shares on $8$ April $20$X$6.$ Applications were

received from the public as follows:

Ordinary shares $-1500000$ shares

Preference shares $-150000$ shares

All the required application amounts were received by $25$ April $20$X$6.$

On $30$ April $20$X$6$ the directors decided:

To allot the preference shares in accordance with the applications.

In the case of ordinary shares:

To allot all applications in the ratio of two shares for every five shares applied for

To refund all excess application amounts on $1$ May $20$X$6.$

Settlement with the underwriters took place on $3$ May $20$X$6.$

The company's accounting policy is to set off share transaction costs against share capital.

Profits for the period ended $30$ September $20$X$6$ amounted to C$150000.$ Total dividends of

C$20000$ were declared on $30$ September $20$X$6.$ None of the shareholders were exempt

from the $20\%$ dividends tax.

You are required to:

a$.$ Record all the above transactions in the journal of Tabby Limited.

b$.$ Prepare the equity section of the statement of financial position of Tabby Limited at

$30$ September $20$X$6.$