Question 1

Oovenya Ltd was incorporated on 01 September 2019 with authorized share capital consisting of 400 000 10% preference shares of N$ 1 each and 2 000 000 ordinary shares of 50c each.

On 05 September 2019, the subscribers to the memorandum took and paid for 100 000 ordinary shares at par.

During the year of 2019, the remaining shares were offered to the public as follows:

The full public offer is underwritten by Virtual Underwritters Ltd for a 2% underwritters commission. The offer for the subscription of shares opened on 01 November 2019 and closed on 25 November 2019. The ordinary shares were offered at a premium of 20c per share and the preference shares were offered at par. The public subscribed for 600 000 preference shares and 1 500 000 ordinary shares and the full amounts payable were received on the closing date of 25 November 2019. All shares were allotted on 15 December 2019, the necessary refunds were made and all transactions with the underwriter were also concluded on this date. All expenses regarding the issue of shares and incorporation must be written off against the share premium account.

The balance of the share premium account as at 15 December 2019 will be as follows:

Select one:

a. N$ 276 000

b. N$ 404 000

c. N$ 380 000

Question 2

Oovenya Ltd was incorporated on 01 September 2019 with authorized share capital consisting of 400 000 10% preference shares of N$ 1 each and 2 000 000 ordinary shares of 50c each.

On 05 September 2019, the subscribers to the memorandum took and paid for 100 000 ordinary shares at par.

During the year of 2019, the remaining shares were offered to the public as follows:

The full public offer is underwritten by Virtual Underwritters Ltd for a 2% underwritters commission. The offer for the subscription of shares opened on 01 November 2019 and closed on 25 November 2019. The ordinary shares were offered at a premium of 20c per share and the preference shares were offered at par. The public subscribed for 600 000 preference shares and 1 500 000 ordinary shares and the full amounts payable were received on the closing date of 25 November 2019. All shares were allotted on 15 December 2019, the necessary refunds were made and all transactions with the underwriter were also concluded on this date. All expenses regarding the issue of shares and incorporation must be written off against the share premium account.

The underwritters commission payable is recorded as follows:

Select one:

a. Dr Underwriting commission 39 000 and Cr Virtual Underwritters Ltd N$ 39 000

b. Dr Bank N$ 92 000 and Cr Underwritters expense N$ 92 000

c. None of the above

d. Dr Virtual Underwritters Ltd N$ 39 000 and Cr Bank N$ 39 000

Question 3

Oovenya Ltd was incorporated on 01 September 2019 with authorized share capital consisting of 400 000 10% preference shares of N$ 1 each and 2 000 000 ordinary shares of 50c each.

On 05 September 2019, the subscribers to the memorandum took and paid for 100 000 ordinary shares at par.

During the year of 2019, the remaining shares were offered to the public as follows:

The full public offer is underwritten by Virtual Underwritters Ltd for a 2% underwritters commission. The offer for the subscription of shares opened on 01 November 2019 and closed on 25 November 2019. The ordinary shares were offered at a premium of 20c per share and the preference shares were offered at par. The public subscribed for 600 000 preference shares and 1 500 000 ordinary shares and the full amounts payable were received on the closing date of 25 November 2019. All shares were allotted on 15 December 2019, the necessary refunds were made and all transactions with the underwriter were also concluded on this date. All expenses regarding the issue of shares and incorporation must be written off against the share premium account.

The refund of the unsuccessful preference shares applicants will be recorded as follows:

Select one:

a. Dr Bank 100 000 Cr Preference share capital N$ 100 000

b. Dr Preference share capital N$ 100 000 and Cr Bank N$ 100 000

c. Dr Preference share capital N$ 100 000 and Cr Application and allotment: preference shares N$ 100 000

d. Dr Application and allotment: preference shares and Cr Bank N$ 100 000

Question 4

Oovenya Ltd was incorporated on 01 September 2019 with authorized share capital consisting of 400 000 10% preference shares of N$ 1 each and 2 000 000 ordinary shares of 50c each.

On 05 September 2019, the subscribers to the memorandum took and paid for 100 000 ordinary shares at par.

During the year of 2019, the remaining shares were offered to the public as follows:

The full public offer is underwritten by Virtual Underwritters Ltd for a 2% underwritters commission. The offer for the subscription of shares opened on 01 November 2019 and closed on 25 November 2019. The ordinary shares were offered at a premium of 20c per share and the preference shares were offered at par. The public subscribed for 600 000 preference shares and 1 500 000 ordinary shares and the full amounts payable were received on the closing date of 25 November 2019. All shares were allotted on 15 December 2019, the necessary refunds were made and all transactions with the underwriter were also concluded on this date. All expenses regarding the issue of shares and incorporation must be written off against the share premium account.

The subscription of the ordinary shares will be recorded as follows:

Select one:

a. Dr Bank N$ 1 650 000 and Cr Application and allotment: ordinary shares N$ 1 650 000

b. Dr Bank N$ 1 050 000 and Cr Ordinary share capital N$ 1 50 000

c. Dr Bank N$ 1 050 000 and Cr Application and allotment: ordinary shares N$ 1 050 000

d. Dr Bank N$ 1 650 000 and Cr Ordinary share capital N$ 1 650 000

Question 5

At the end of an accounting period a business has valued its work in progress closing stock by including the following items:

	N$000
Raw material cost in WIP	150
Carriage costs of the above goods	10
Production wages associated with this inventory	20
Production overheads associated with this inventory	30
Administration costs	5

Which is the correct figure for the valuation of closing inventory?

Select one:

a. N$215 000

b. N$180 000

c. N$210 000

d. N$150 000

Question 6

Oovenya Ltd was incorporated on 01 September 2019 with authorized share capital consisting of 400 000 10% preference shares of N$ 1 each and 2 000 000 ordinary shares of 50c each.

On 05 September 2019, the subscribers to the memorandum took and paid for 100 000 ordinary shares at par.

During the year of 2019, the remaining shares were offered to the public as follows:

The full public offer is underwritten by Virtual Underwritters Ltd for a 2% underwritters commission. The offer for the subscription of shares opened on 01 November 2019 and closed on 25 November 2019. The ordinary shares were offered at a premium of 20c per share and the preference shares were offered at par. The public subscribed for 600 000 preference shares and 1 500 000 ordinary shares and the full amounts payable were received on the closing date of 25 November 2019. All shares were allotted on 15 December 2019, the necessary refunds were made and all transactions with the underwriter were also concluded on this date. All expenses regarding the issue of shares and incorporation must be written off against the share premium account.

The payment by the underwriter to fulfil the term of the underwriting agreement will be recorded as follows:

Select one:

a. None of the above

b. Dr Bank N$ 251 000 and Cr Vitual Undrwritters N$ 251 000

c. Dr Vitual Underwritters N$ 280 000 and Cr Bank N$ 280 000

d. Dr Vitual Underwriters N$ 251 000 and Cr Ordinary share capital N$ 251 000