HA2032 Corporate And Financial Accounting Assignment


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.


  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)

 Trust account   
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
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   
1st August, 2020Share Application A/C    $200,000.00$200,000.00
1st August, 2020Trust A/C$200,000.00 $200,000.00

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