solve Q2

Due to massive development in the Western Sydney en Traders Ltd commences its operation in Parramatta by making a public offer of its shares. I uirectors are from India and the its prospectus notes the following 1. The shares are to be issued at $2.00 per share. 2. The shares are to be paid in three instalments. a. The first payment to be made on application is $0.80. b. A second amount of $0.80 will be due within one month of allotment, and I c. The third amount of $0.40 will be due within one month of the first and final call Green Traders will seek to issue 5 million shares. The closing date for applications is 31 August 2019. By the closing date, applications have been received for 7 million shares. To deal with the oversubscription, Green Traders has decided to issue shares to all subscribers on a pro rata basis. All amounts due on allotment are paid by the due date. The first and final call for $0.40 is made on 30 November 2018, with the amounts being due by 31 December 2018. Holders of one million shares fail to pay the amount due on the call by the due date, and on 15 January 2019 these holders have their shares forfeited. The forfeited shares are auctioned on 15 February 2019. An amount of $1.40 per share is received. The cost of holding the auction is $3,500. The shares are sold as fully paid. REQUIRED of preferential treatment can the holders of preference shares receive over and holders of ordinary shares? (3 Marks) massary to account for the transactions and events fail to pay the amour their shares forfeited. The forfeit per share is received. The cost of holding the REQUIRED: 1. What forms of preferential treatment can the holders of preference shares receive over and above the rights of holders of ordinary shares? (3 Marks) 2. Provide the accounting journal entries necessary to account for the transactions and events in question 3 above. (22 Marks) ook Pro