1. SMART bank LTD has recently been incorporated in Uganda with an authorised capital of shs 40,000,000 divided into 10,000 ordinary shares. On 1^st January 2021, the directors of the company approved the issue of 50% of the authorised capital and that this be paid in installments as shown below;

On application (7^th January 2021) 1,000/= per share

On allotment (20^th January 2022). 2,000/= per share

On 1^st Call (24^th February 2021). 500/= per share

On 2^nd and Final call (28^th February 201) 1,000/= per share

The following information relates to the above share issue;

1. The shares were issued at a premium of shs 500 each and this was to be recognised at allotment stage but to be paid on 24^th February 2021 together with the payment of 1^st call money.
2. On 7^th January, 6,200 applications were received and management advised that 1,200 applications be refunded their monies immediately.
3. Allotment and the two calls were successfully made and all monies received on their due dates,

Required:

1. Prepare the necessary ledger accounts to reflect all the above transactions (17 marks)
2. Prepare a balance sheet extract after the whole process (4 marks)