showing full working out for questions 12-18

Question 12 Cartoon Led is listed on the Australian Stock Exchange. It has 3 million shares issued at a price of $5.50 per share. The investors were required to pay $2.00 on application and $1.00 on allotment. Both these amounts were paid in full. A first and final call of $2.50 was made and was due on 30 August 2013. At the end of November the directors of the company elect to forfeit 50 000 shares on which the holders have failed to pay the call. Cartoon Lid reissues the shares fully paid up for a price of $4.75. What are the entries required to forfeit the shares? Question 13 Fraser Lid issued 10 million shares at a price of $3 on 1 July 2012. The subscribers are required to pay $1 on application, $1 on allotment and the balance on call to be announced at a later date. The share issue was oversubscribed by 2 million shares. On 1 August 2012 the shares were allotted to all subscribers on a pro rata basis. What is the balance of the 'allotment account' and 'share capital' for this share issue on 1 August 2012, respectively? Question 14 Manly Lid makes an offer to the general public of 10 000 shares at an issue price of $3.00. Manly Lid requires a $2.10 per share payment on application then, on allotment, another $0.60 is to be paid, and a further $0.30 final amount is payable as a call at future date to be determined by the board of directors. On application money was received on 12 July for 11 500 shares. On 28 July, 10 000 shares were allotted (i.e. issued) and the surplus application money refunded. Which of the following would be the journal entry to record the refund? Question 15 Raging Dragons Ltd has a depreciable asset that is estimated for accounting purposes to have a useful life of 15 years. For taxation purposes the useful life is 10 years. The asset was purchased at the beginning of year 1, there is no residual value, and the straight-line method of depreciation is used for both tax and accounting purposes. The tax rate is 30% and the cost of the asset is $150 000. What adjustment will be required to the deferred tax liability account in years 10 and 11? Question 16 P Corporation paid $100 000 cash for the net assets of S Corporation which consisted of the following: Book Value Fair Value Current Assets $40 000 $56 000 Plant and equipment 160 000 150 000 Liabilities assumed (40 000) (36 000) 160 000 240 000 Assume S Corporation is dissolved. The plant and equipment in this business combination should be recorded at: A. $150 000 B. $200 000 C. $183 332 D. $180 000 Question 17 On March 10, P Ltd issued 1 000 000 of its own ordinary shares to acquire T Ltd. The fair value of P Lid's shares at the time was $40 per share. P Ltd incurred the cost of registering and issuing the securities for $200 000, cost of printing the shares for $50 000, cost of accountants for the business combination for $100 000, cost of delivering the securities for $20 000 and cost of transferring assets of T Ltd for $30 000. Registering and issuing costs is regarded as a capital reduction. All other costs are expensed. What amount of share capital should be recorded by P Ltd? Question 18 Pan Company issued 480 000 ordinary shares with a fair value of $10 200 000 for all the ordinary shares of Set Company. In addition, Pan incurred the following costs Legal fees $100 000 Registration fee $48 000 Printing and issuing share certificates $12 000 Other indirect costs $80 000 Immediately before the acquisition, Set Company was dissolved. Set's assets and equities were as follows: Book Value Fair Value Current assets $4 000 000 $4 000 000 Plant assets $6 000 000 $8 800 000 Liabilities $1 200 000 $1 200 000 Share capital $8 000 000 Retained earnings $800 000 What is the fair value of Set Company