The equity section of the balance sheet of the company at the 30th June 20X3 is provided below: OWNERS' EQUITY Issued Capital Reserves Retained profits TOTAL OWNERS' EQUITY $ 42,500,000 12,245,000 3,276,500 58,021,500 The company's financial year ends on 30th June. Additional Information: 1. Issued capital is comprised of: 3,125,000 ordinary shares all issued at $8.00 each $17,500,000 of 2.5%pa preference shares. Dividends on these shares are paid six monthly on the first day of October and April each year. 2. Reserves is comprised of: General Reserve of $7,630,000 . Asset Revaluation Reserve of $4,615,000 A list of ordinary shareholders and their holdings as at 30th June 20x3 is provided on the next page. Note: DRP = "Y" elected to be in the dividend reinvestment plan The amounts under 1/7/20x3 = number of shares held at that date . (Ensure that you have fully read and understood the information previously provided under the Basic Details for the assignment.) DRP First Name Darin Lee Y X Y Jeffrey Jean Y Israel Karl Isaac Gordon Y Y Alfonso Abel William Y May Harriet Y Y Family name/Corporate name Adkins Andrews Ball Superannuation Fund Ballard Barnett Castro Investment Pty Ltd Crawford Erickson Foster Francis French Enterprise Ltd Gonzalez International Ltd Grant Gray Griffin Hale & Doug Pty Itd Holmes Holt Jensen Oriental Ltd Jordan Mann Mason Meyer Montgomery Morrison Neal Norton Ossie Trading Ltd Perry Potter Practice investments Ltd Reid Salazar Trust Silva Stephens Superannuation Fund Stevenson Stone Sutton Thompson Todd Underwood Pty Ltd 1/7/20X3 78,500 34,000 78,900 25,600 97,500 100,000 23,400 55,500 12,500 98,700 280,700 65,000 32,900 11,200 22,000 65,500 121,100 54,000 58,000 87,200 22,500 8,000 43,600 58,200 69,100 71,800 85,300 325,000 36,400 143,600 59,000 248,000 65,400 190,000 28,000 45,200 62,500 11,900 22,200 127,100 Dianne Sherman Leonard Minnie Cornelius Candace Faith Archie Y Y Y Ernestine Lana Y Y Alexandra Y Jake Glenda Willie Andrew Sara Y Shareholders who elected to participate in the dividend reinvestment plan introduced by FML receive ordinary shares in lieu of cash for dividends. Shareholders must agree that their entire holding is subject to the DRP plan. Shares are issued at 96% of the closing ASX share price on the day in which the dividend is declared. It is likely that a calculation of the number of shares under the DRP plan will result in a part share (ie not a whole number). In that event the number of shares will be rounded down to the next whole number. For example, a calculation which results in 12,345.78 shares will be rounded down to 12,345. That is, that part of the share is lost. Whenever the rounding occurs that rounded down number will become the new shareholding as the basis for future transactions and calculations. Other rounding conditions are: The principle of rounding down the number of shares (as in the DRP above) applies to any share issue. Also note that care needs to be taken with some calculations. When calculating dollar amounts for dividends etc you need to do these on individual shareholders and then aggregate those numbers for the journal entry. Calculations which involve share prices, should be rounded to the nearest cent (ie 2 decimal places of a dollar). Journal entries should be rounded to the nearest whole dollar. . . . The following are five events that relate to the 20/3/X4 financial year for Fairweather Manufacturing Ltd (FML). 1. On the 22nd June 20x3 the company determined a final dividend of 4.0 cents per ordinary share. This was declared on the 14th July 20x3 and paid three (3) days after the annual general meeting which was held on the 28th September 20X3. 2. On the 12th November 20X3 FML announced a bonus ordinary share issue of 1:15 at an issue price of $12.00/share. The bonus issue is to be paid out of the General Reserve and was made on the 30th November 20X3. 3. On the 2nd January 20X4 FML declared and paid an interim dividend of 2.5 cents per ordinary share. 3 4. The FML Board of Directors had been working on the acquisition of a rival business and on the 16th January 20X4 received advice of acceptance of a purchase price. To help fund the acquisition FML decided to raise some capital through a rights issue of ordinary shares. They formalised the rights issue at their meeting on the 28th January 20X4 where they decided to offer ordinary shareholders the rights issue on a 1:12 basis. Shareholders who accept the offer pay 85% of the share price on the day of the Board decision. Acceptance and payment by shareholders needs to be made on the 18th February 20X4. The amount paid is based on the rounded down number of shares issued. The following shareholders took up the offer and paid the appropriate amounts on the required date: porror propre First Name Darin Lee Jean Family name/Corporate name Adkins Andrews Ball Superannuation Fund Barnett Castro Investment Pty Ltd Crawford Erickson Foster Francis French Enterprise Ltd Grant Israel Karl Isaac Gordon Gray Alfonso Abel William Sherman Leonard Minnie Archie Ernestine Griffin Hale & Doug Pty Itd Mann Mason Meyer Norton Ossie Trading Ltd Perry Potter Practice investments Ltd Reid Salazar Trust Silva Stephens Superannuation Fund Sutton Todd Underwood Pty Ltd Lana Alexandra Willie Sara 4 5. The 20/3/X4 financial year was exceptional for FML and it decided to reward its ordinary shareholders. At the Directors meeting on the 13th June 20x4 it decided to provide a twofold benefit. First, is a bonus share issue on a 1:25 basis issued at $12.50 per share and funded from excess amounts in the Asset Revaluation Reserve. Second, is that the meeting determined a final dividend of 5.0 cents per ordinary share which is hoped to be declared sometime in July 20X4. The following are a selection of ASX closing daily share prices for FML Date Closing Share Price $ Date Closing Share Price $ 6/6/X3 $12.46 14/12/X3 $12.14 15/6/X3 $12.55 2/1/X4 $12.12 22/6/X3 $12.54 18/1/X4 $12.26 5/7/X3 $12.39 28/1/X4 $12.45 14/7/X3 $12.50 12/2/X4 $12.51 12/8/X3 $12.46 18/2/X4 $12.60 31/8/X3 $12.51 30/3/X4 $12.63 12/9/X3 $12.60 12/4/X4 $12.59 28/9/X3 $12.62 29/4/X4 $12.52 1/10/X3 $12.58 12/5/X4 $12.56 11/10/X3 $12.51 31/5/X4 $12.55 2/11/X $12.30 8/6/X4 $12.59 30/11/X3 $12.06 13/6/X4 $12.83 4/12/X3 $12.07 30/6/X4 $12.88 X REQUIREMENTS FOR ASSIGNMENT 1. You are presented with equity information together with five separate events for Fairweather Manufacturing Ltd (FML) that give rise to transaction/s. Prepare all the general journal entries that arise for the period 1st July 20x3 to 30th June 20X4 only. You also need to provide supporting information (ie a working paper) for each journal entry. Furthermore after each of the five events provide the following: The number of ordinary shares on issue subject to the dividend reinvestment plan. The number of ordinary shares on issue which are not subject to the dividend reinvestment plan. The total number of ordinary shares on issue. 100 marks 2. Prepare general ledger T account for Ordinary Share Capital for the period 1/7/20x3 to 1/7/20X4. Ensure it is properly balanced at 30/6/20X4. 20 marks To The equity section of the balance sheet of the company at the 30th June 20X3 is provided below: OWNERS' EQUITY Issued Capital Reserves Retained profits TOTAL OWNERS' EQUITY $ 42,500,000 12,245,000 3,276,500 58,021,500 The company's financial year ends on 30th June. Additional Information: 1. Issued capital is comprised of: 3,125,000 ordinary shares all issued at $8.00 each $17,500,000 of 2.5%pa preference shares. Dividends on these shares are paid six monthly on the first day of October and April each year. 2. Reserves is comprised of: General Reserve of $7,630,000 . Asset Revaluation Reserve of $4,615,000 A list of ordinary shareholders and their holdings as at 30th June 20x3 is provided on the next page. Note: DRP = "Y" elected to be in the dividend reinvestment plan The amounts under 1/7/20x3 = number of shares held at that date . (Ensure that you have fully read and understood the information previously provided under the Basic Details for the assignment.) DRP First Name Darin Lee Y X Y Jeffrey Jean Y Israel Karl Isaac Gordon Y Y Alfonso Abel William Y May Harriet Y Y Family name/Corporate name Adkins Andrews Ball Superannuation Fund Ballard Barnett Castro Investment Pty Ltd Crawford Erickson Foster Francis French Enterprise Ltd Gonzalez International Ltd Grant Gray Griffin Hale & Doug Pty Itd Holmes Holt Jensen Oriental Ltd Jordan Mann Mason Meyer Montgomery Morrison Neal Norton Ossie Trading Ltd Perry Potter Practice investments Ltd Reid Salazar Trust Silva Stephens Superannuation Fund Stevenson Stone Sutton Thompson Todd Underwood Pty Ltd 1/7/20X3 78,500 34,000 78,900 25,600 97,500 100,000 23,400 55,500 12,500 98,700 280,700 65,000 32,900 11,200 22,000 65,500 121,100 54,000 58,000 87,200 22,500 8,000 43,600 58,200 69,100 71,800 85,300 325,000 36,400 143,600 59,000 248,000 65,400 190,000 28,000 45,200 62,500 11,900 22,200 127,100 Dianne Sherman Leonard Minnie Cornelius Candace Faith Archie Y Y Y Ernestine Lana Y Y Alexandra Y Jake Glenda Willie Andrew Sara Y Shareholders who elected to participate in the dividend reinvestment plan introduced by FML receive ordinary shares in lieu of cash for dividends. Shareholders must agree that their entire holding is subject to the DRP plan. Shares are issued at 96% of the closing ASX share price on the day in which the dividend is declared. It is likely that a calculation of the number of shares under the DRP plan will result in a part share (ie not a whole number). In that event the number of shares will be rounded down to the next whole number. For example, a calculation which results in 12,345.78 shares will be rounded down to 12,345. That is, that part of the share is lost. Whenever the rounding occurs that rounded down number will become the new shareholding as the basis for future transactions and calculations. Other rounding conditions are: The principle of rounding down the number of shares (as in the DRP above) applies to any share issue. Also note that care needs to be taken with some calculations. When calculating dollar amounts for dividends etc you need to do these on individual shareholders and then aggregate those numbers for the journal entry. Calculations which involve share prices, should be rounded to the nearest cent (ie 2 decimal places of a dollar). Journal entries should be rounded to the nearest whole dollar. . . . The following are five events that relate to the 20/3/X4 financial year for Fairweather Manufacturing Ltd (FML). 1. On the 22nd June 20x3 the company determined a final dividend of 4.0 cents per ordinary share. This was declared on the 14th July 20x3 and paid three (3) days after the annual general meeting which was held on the 28th September 20X3. 2. On the 12th November 20X3 FML announced a bonus ordinary share issue of 1:15 at an issue price of $12.00/share. The bonus issue is to be paid out of the General Reserve and was made on the 30th November 20X3. 3. On the 2nd January 20X4 FML declared and paid an interim dividend of 2.5 cents per ordinary share. 3 4. The FML Board of Directors had been working on the acquisition of a rival business and on the 16th January 20X4 received advice of acceptance of a purchase price. To help fund the acquisition FML decided to raise some capital through a rights issue of ordinary shares. They formalised the rights issue at their meeting on the 28th January 20X4 where they decided to offer ordinary shareholders the rights issue on a 1:12 basis. Shareholders who accept the offer pay 85% of the share price on the day of the Board decision. Acceptance and payment by shareholders needs to be made on the 18th February 20X4. The amount paid is based on the rounded down number of shares issued. The following shareholders took up the offer and paid the appropriate amounts on the required date: porror propre First Name Darin Lee Jean Family name/Corporate name Adkins Andrews Ball Superannuation Fund Barnett Castro Investment Pty Ltd Crawford Erickson Foster Francis French Enterprise Ltd Grant Israel Karl Isaac Gordon Gray Alfonso Abel William Sherman Leonard Minnie Archie Ernestine Griffin Hale & Doug Pty Itd Mann Mason Meyer Norton Ossie Trading Ltd Perry Potter Practice investments Ltd Reid Salazar Trust Silva Stephens Superannuation Fund Sutton Todd Underwood Pty Ltd Lana Alexandra Willie Sara 4 5. The 20/3/X4 financial year was exceptional for FML and it decided to reward its ordinary shareholders. At the Directors meeting on the 13th June 20x4 it decided to provide a twofold benefit. First, is a bonus share issue on a 1:25 basis issued at $12.50 per share and funded from excess amounts in the Asset Revaluation Reserve. Second, is that the meeting determined a final dividend of 5.0 cents per ordinary share which is hoped to be declared sometime in July 20X4. The following are a selection of ASX closing daily share prices for FML Date Closing Share Price $ Date Closing Share Price $ 6/6/X3 $12.46 14/12/X3 $12.14 15/6/X3 $12.55 2/1/X4 $12.12 22/6/X3 $12.54 18/1/X4 $12.26 5/7/X3 $12.39 28/1/X4 $12.45 14/7/X3 $12.50 12/2/X4 $12.51 12/8/X3 $12.46 18/2/X4 $12.60 31/8/X3 $12.51 30/3/X4 $12.63 12/9/X3 $12.60 12/4/X4 $12.59 28/9/X3 $12.62 29/4/X4 $12.52 1/10/X3 $12.58 12/5/X4 $12.56 11/10/X3 $12.51 31/5/X4 $12.55 2/11/X $12.30 8/6/X4 $12.59 30/11/X3 $12.06 13/6/X4 $12.83 4/12/X3 $12.07 30/6/X4 $12.88 X REQUIREMENTS FOR ASSIGNMENT 1. You are presented with equity information together with five separate events for Fairweather Manufacturing Ltd (FML) that give rise to transaction/s. Prepare all the general journal entries that arise for the period 1st July 20x3 to 30th June 20X4 only. You also need to provide supporting information (ie a working paper) for each journal entry. Furthermore after each of the five events provide the following: The number of ordinary shares on issue subject to the dividend reinvestment plan. The number of ordinary shares on issue which are not subject to the dividend reinvestment plan. The total number of ordinary shares on issue. 100 marks 2. Prepare general ledger T account for Ordinary Share Capital for the period 1/7/20x3 to 1/7/20X4. Ensure it is properly balanced at 30/6/20X4. 20 marks To