Question 1

Add tid was formed on 1* January 2019 with 200,000 equity shares of no par value. The directors

offered 100,000 shares for sale to the public under the following terms:

February

GHe1.50 payable on application

March

GHe0.75 payable on allotment

Apnl

GHe0.25 payable on call

Applications were received for 180,000 shares and the directors made the issues as follows:

Applications for the first 40,000 shares were allotted in full;

Next applicants for the 60,000 shares received two-thirds of application;

Next 20,000 shares applicants had 60% of application;

Next 20,000 shares applicants were allotted 40% of application;

The remaining applications were rejected All monies were duly received.

Overpayments and payments by unsuccessful applications were duly dealt with (i.e. excess

application monies were refunded to unsuccessful applicants or set off against allotment for

partially successful applicants.

Required:

a) Prepare a statement showing over/under payment;

b) Prepare ledger entries to give effect to the above transaction; and

c) Prepare relevant statement of financial position extract.