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Question 1 Accounting for Equity Sugar Ltd was involved in the following transactions during 1 July 2019 to 30 June 2020 financial period. On 5
Question 1 Accounting for Equity
Sugar Ltd was involved in the following transactions during 1 July 2019 to 30 June 2020 financial period.
- On 5 November 2019 the directors of the company decided to raise extra capital by issuing 2 million ordinary shares publicly at a price of $2 each share. The company received application monies of $4,800,000 for 2.4 million shares on 30 November.
- The company decided to allot shares to applicants on the basis of 10 shares for every 12 shares applied for on 30 December.
- On 30 December, the excess amounts paid on application were refunded to applicants after the allotment.
- The funds raised were transferred to the companys business account.
- The company paid $300,000 interim dividends from prior retained earnings to ordinary shareholders on 7 February 2020.
- The company issued 280,000 bonus shares at a price of $2 per share from general reserve on 30 June 2020.
- The company earned $700,000 profit during the financial year ended 30 June 2020.
Required:
Provide journal entries to record the above transactions for 2019/2020 financial year. (Narrations are required)
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