Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The equity of Seventh Ltd at 30 June 2019 consisted of. 407,500 ordinary 'A' shares issued at $2.00, fully paid 301,400 ordinary 'B' shares issued

image text in transcribed
The equity of Seventh Ltd at 30 June 2019 consisted of. 407,500 ordinary 'A' shares issued at $2.00, fully paid 301,400 ordinary 'B' shares issued at $2.00, called to $1.20 52,500 6% preference shares issued at $1.60, fully paid Share options issued at 60c, fully paid Retained earnings $815,000 361,680 84,000 22,380 288,600 The options were exercisable before 28 February 2020. Each option entitled the holder to acquire two ordinary 'C' shares at $1.80 per share, the amount payable on notification to exercise the option The following transactions occurred during the year ended 30 June 2020. 2019 Sept. 15 The preference dividend and the final ordinary dividend of 15c per fully paid share, both declared on 30 June 2019, were paid. The directors do not need any other party to authorize the payment of dividends. Nov. 1 A one-for-five renounceable rights offer was made to ordinary Ashareholders at an issue price of $1.90 per share. The expiry date on the offer was 30 November 2019. The issue was underwritten at a commission of $3,210. 30 Holders of 326,000 shares accepted the rights offer, paying the required price per share, with the renounced rights being taken up by the underwriter. Ordinary A shares were duly issued. Dec. 10 Money due from the underwriter was received 2020 Jan. 10 The directors transferred $36,800 from retained earnings to a general reserve. Feb. 28 As a result of options being exercised, 71,200 ordinary C shares were issued. Unexercised options lapsed. Apr 30 The directors made a call on the ordinary 'B' shares for 80c per share. Call money was payable by 31 May. May 31 All call monies was received except for that due on 15,780 shares. June 18 Shares on which the final call was unpaid were forfeited. 26 Forfeited shares were reissued, credited as paid to $2.00, for S1.80 per share, the balance of the forfeited shares account being refundable to the former shareholders. 27 Refund paid to former holders of forfeited shares. 30 The directors declared a 2lc per share final dividend to be paid on 15 September 2020. Required: 1. Prepare general journal entries to record the above transactions. 2. Prepare the equity section of the statement of financial position as at 30 June 2020

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Swanson On Internal Auditing Raising The Bar

Authors: IT Governance Publishing

1st Edition

1849280673, 978-1849280679

More Books

Students also viewed these Accounting questions