HA2032 Corporate And Financial Accounting Assignment

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Course Code : HA2032

Course Title : Corporate and Financial Accounting Assignment

University : Holmes Institute

Question 1                                                                                                                  (7 Marks)

XYZ Ltd was registered on 30 June 2020. The next day, the directors issued a prospectus inviting applicants for 200,000 ordinary shares with an issue price of $1. The shares were payable in full on application. By 31 July, the company had received 400,000 applications, together with the application monies. The directors allotted 200,000 shares on 1 August and returned the money for additional applications.

Required:

  1. Prepare general journal entries to record the above data. (3.5 marks)
 Journal Entries  
 In the Books of XYZ Ltd  
    
DateParticularsAmount Dr ($)Amount Cr ($)
31st July, 2020Cash Trust A/C              Dr$400,000.00 
        To Share Application A/C $400,000.00
 (Receipt of application money of $1 for 400000 shares)  
    
1st Auguest, 2020Share Application A/C           Dr$200,000.00 
 Share Allotment A/C              Dr$200,000.00 
         To Paid-up Capital-Ordinray Shares A/C $400,000.00
 (Allotment of shares and application os ordinary shares at issue price of $1)  
    
1st Auguest, 2020Bank A/C                      Dr$400,000.00 
          To Trust A/C $400,000.00
 (Recognition of that application money no longer held in trust)  
    
1st Auguest, 2020Share Application A/C      Dr                $200,000.00 
           To Trust A/C  $200,000.00
 (Additional money for ordinary shares have been returned to additional applicants)  

B) Enter the above data into the ledger tables below. (3.5 marks)

  Debit
$
Credit
$
Balance
$
 Trust account   
2020    
31st July, 2020   1st August, 2020   1st August, 2020Application A/C   Application A/C   Bank A/C$400,000.00    $200,000.00   $200,000.00$400,000.00       $0.00
     
     
 Application   
2020    
31st July, 2020   1st August, 2020   1stAugust, 2020   1st August, 2020Cash Trust A/C   Paid-up Capital-Ordinray Shares A/C   Share Allotment A/C   Trust A/C    $400,000.00       $200,000.00$400,000.00       $200,000.00$400,000.00   $0.00   $200,000.00   $0.00
     
     
 Paid-up capital   
2020    
1st August, 2020Share Application A/C    $200,000.00$200,000.00
     
 Bank   
2020    
1st August, 2020Trust A/C$200,000.00 $200,000.00

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