ACW2491 Company Reporting

Tutorial Solution
Semester 1 2016
Topic 2: Financing Company Operations

PQ 2.3
2017
To 1 Sept

6 Sept

Cash Trust
Dr
Application
Cr
(being receipt of applications money)

1 550 000

Application
Allotment
Share Capital
(being issue of 600,000 shares)

1 500 000
900 000

Application
Cash Trust
(being
refund
applicants)

1 October

1 Feb 2018

To 1 March

to

Dr
Dr
Cr

Dr
Cr
unsuccessful

1 550 000

2 400 000

50 000
50 000

Share Capital/Share Issue Costs

Dr
Cash/Payables
Cr
(being payment of share issue costs)

12 400

Cash
Cash Trust
(transfer of application money)

1 500 000

Dr
Cr

12 400

1 500 000

Cash
Dr
Allotment
Cr
(being receipt of allotment money due)

900 000

Call
Share Capital
(being first and final call for $3)

Dr
Cr

1 800 000

Cash
Call
(being receipt of call money)

Dr
Cr

1 800 000

900 000

1 800 0000

1 800 000

ACW2491 Company Reporting

Tutorial Solution
Semester 1 2016
Topic 2: Financing Company Operations

PQ 2.12
General Journal
2017
August 15

August 16

Cash Trust
Application
(Cash received on application)

Dr
Cr

4 200 000

Application
Allotment
Share Capital
(Allotment of shares)

Dr
Dr
Cr

3 000 000
2 000 000

Cash
Cash Trust
(Transfer of trust funds)

Dr
Cr

4 200 000

4 200 000

5 000 000

4 200 000

Application *
Dr
1 200 000
Allotment
Cr
Calls in Advance
Cr
(Allocation of application across allotment and calls in advance)
August 28

September 15

2017
November 1

Share Issue Costs/Share Capital

Dr
14 000
Cash
Cr
(Payment of underwriting commission and other share issue costs
Cash
Allotment
(Cash received on allotment)

Dr
Cr

1 000 000

Call

Dr
Cr

1 000 000

Calls in Advance
Dr
Call
Cr
(Transfer of calls received in advance)

200 000

Cash
Call
(Cash received on call)

Dr
Cr

770 000

Call in arrears
Call
(To record call in arrears)

Dr
Cr

30 000

Share Capital

Dr

180 000

Share Capital
(Call of $1 per share)

November 30

December 7

1 000 000
200 000

14 000

1 000 000

1 000 000

200 000

770 000

30 000

ACW2491 Company Reporting

Tutorial Solution
Semester 1 2016
Topic 2: Financing Company Operations

Call in arrears
Forfeited Shares Liability
(Forfeiture of shares)

Cr
Cr

Cash
Forfeited Shares Liability
Share Capital
(Reissue of shares forfeited)

Dr
Dr
Cr

168 000
12 000

Forfeited Shares Liability

Cash
(Refund to former shareholders)

Dr
Cr

138 000

Share Capital - Preference

Retained Earnings
Shareholders Redemption
(Redemption of shares at price of $2.60)

Dr
Dr
Cr

375 000
15 000

Shareholders Redemption
Cash
(Payment on redemption)

Dr
Cr

390 000

Retained Earnings
Share Capital - Ordinary
(Transfer against retained earnings)

Dr
Cr

375 000

Cash Trust
Application - Ordinary
(Money received on application)

Dr
Cr

240 000

Application - Ordinary
Share Capital - Ordinary
(Allotment of shares)

Dr
Cr

240 000

Cash
Cash Trust
(Transfer on allotment)

Dr
Cr

240 000

Preference Share Liability

Redemption Premium Expense
Shareholders Redemption
(Redemption of shares)

Dr
Dr
Cr

225 000
15 000

December 15

December 16

30 000
150 000

180 000

138 000

PQ 2.17
1.

2.

390 000

390 000

375 000

240 000

240 000

240 000

240 000

ACW2491 Company Reporting

Tutorial Solution
Semester 1 2016
Topic 2: Financing Company Operations

3.

4.

5.

Shareholders Redemption
Cash
(Payment on redemption)

Dr
Cr

240 000

Debentures
Cash
Income on Redemption of Debentures
(Purchase of debentures on stock exchange)

Dr
Cr
Cr

1 000 000

Cash
Share Options
(Issue of share options)

Dr
Cr

37 500

Cash
Dr
Share Capital Ordinary
Cr
(Issue of ordinary shares as a result of options exercised)
Share Options
Share Capital Ordinary
Lapsed Options Reserve
(Write-off of options exercised, and lapsed)

6.

Dr
Cr
Cr

240 000

960 000
40 000

37 500

144 000
144 000

37 500
30 000
7 500

Cash Trust
Dr
4 500 000
Application - Debentures
Cr
4 500 000
(Cash received as $25 per debenture application money on 180 000 debentures)
Application - Debentures
Debentures
(Issue of debentures)

Dr
Cr

3 750 000
3 750 000

Cash
Dr
3 750 000
Application - Debentures
Dr
750 000
Cash Trust
Cr
(Transfer on allotment and refund to unsuccessful applicants)
7.

Convertible Note Liability

Convertible Noteholders
(Transfer to noteholders account)

Dr
Cr

25 000
25 000

Convertible Noteholders
Dr
Cash
Cr
Share Capital
Cr
(Conversion of convertible notes by cash payment and issue of shares)

25 000

8.

40 000

Cash
Share Capital
(Issuance of rights issue)

Dr
Cr

4 500 000

20 000
5 000

40 000