Question 1 10 Marks Westmead Ltd was registered as a public company in July 2014. On 1 August 2014, Westmead Ltd issued a prospectus inviting applications from the public for 50,000 ordinary shares at an issue price of $5 per share, payable as follows: $2 on application (due 1 November 2014) $2 on allotment (due 1 December 2014) $1 on future calls By 1 November 2014, applications had been received for 90,000 ordinary shares. At a directors' meeting on 1 November 2014, it was decided to reject applications for 10,000 shares and allot 80,000 shares to the other applicants in proportion to the number of shares for which application had been made. According to the company's constitution, all surplus money from application can be transferred to Allotment and/or Call accounts. On 1 November 2014, the application money was refunded to unsuccessful applicants. On 5 November 2014, share issue costs of $2,000 were paid. All outstanding allotment money was received by the due date. The final call of $1 per share was made on 1 January 2015 with payment due to Westmead Ltd by 1 February 2015. All money was received on the due date except for the holder of 5,000 shares who failed to meet the call. On 7 February 2015, as provided for in the constitution, the directors decided to forfeit these shares. The shares were reissued, on 15 February 2015, as paid to $5 for $4.50 cash. The balance of the Forfeited Shares account was refunded to the former shareholder on 20 February 2015. Required Prepare the journal entries to record these transactions of Westmead Ltd. Question 3 10 Marks Orange Ltd is an Australian company that uses the Australian dollar (AUD) as its functional currency and has a 30 June reporting date. The following events and transactions occurred between April and July 2016: 1 April 2016: Orange Ltd received an order to supply items of inventory to a customer located in Malaysia. The transaction is denominated in Malaysian Ringgit (MYR) and the selling price of the inventory is MYR 216,000. 20 April 2016: Orange Ltd paid MYR 780,000 to acquire some land in Malaysia. Orange Ltd uses the fair value model to measure land in accordance with AASB 116 Property, Plant and Equipment. 21 May 2016: the inventory was shipped, FOB shipping point, by Orange Ltd. 30 June 2016: Orange Ltd determines that the fair value of the land in Malaysia is MYR 810,000. 31 July 2016: the Malaysian customer pays the amount owing to Orange Ltd. The following spot exchange rates are available: Date 1 April 2016 20 April 2016 21 May 2016 30 June 2016 31 July 2016 Rate AUD 1 = MYR 2.80 AUD 1 = MYR 2.60 AUD 1 = MYR 2.50 AUD 1 = MYR 2.40 AUD 1 = MYR 2.70 Required Provide the journal entries to account for the above events and transactions for Orange Ltd
