Question 5 The following CR account balances appeared in the Balance Sheet of Richie's Ltd as at 30 June 2018: $ Paid-up capital (1 000 000 ordinary shares) 4 000 000 Retained prots 1 750 000 Asset revaluation surplus 1 100 000 General reserve 350 000 It is noted that the company was registered with the right to offer up to TWO million ordinary shares at a nominal value of $4.00 each. The following selected transactions took place during the nancial year ended 30June 2018. 29 July . A 1:4 bonus share issue, valued at $4.00 per share, is declared (using funds from the asset revaluation surplus) and the shares are issued immediately. 22 October . Ritchie's Ltd issues a prospectus offering 500 000 shares at $4.00 per share, all payable at the time of application. 12 November - Applications and money are received for 600 000 shares. 9 December - Shares were issued to successful applicants immediately. The company has a policy of refunding any excess funds on application to unsuccessful applicants immediately. 30June - A nal dividend of 25 cents per share is declared. This nal dividend is to be paid to all shareholders in the next nancial year. - After adjusting and closing entries, the debit balance in the prot and loss summary account is $450 000. Required a Prepare general journal entries to record these events and any further closing entries that are required for the year ended 30 June 2018. b. Then recalculate the total shareholders' equity of Richie's Ltd on 30 June 2018. c. Explain which account funds received on application are held in until the shares are issued, and why