Assignment-3

Course Name: Financial Accounting II

Course Code: ACT 102

Submitted to:
Rubel Saha

Lecturer

School of Business

Primeasia University

Submitted By: Taiful Mawla Tausick.

ID : 181-017-045.
Answer:1

Susie Systems Ltd

Journal
POST.

DATE ACCOUNTS AND EXPLANATIONS REF. DEBIT CREDIT

May 19 Cash (2 000 x $9.50) 19 000

Ordinary Share Capital 19 000

June 3 Cash 15 000

Preference Share Capital 15 000

11 Equipment 78 000

Ordinary Share Capital 78 000

Answer: 2
Total paid-up capital generated from these transactions amounts to $112 000

($19 000 + $15 000 + $78 000 = $112 000)

E 14-4

Answer:1

Riverside Ltd

Journal
POST.

DATE ACCOUNTS AND EXPLANATIONS REF. DEBIT CREDIT

Cash (Trust
Bank Account)
May 3 5 000
(2 000 x $10 x
1/4)

Applicatio
5 000
n

Received
application
money, held in
trust

18 Application 5 000

Allotment (2
000 x $10 x 10 000
1/2)

Ordinary
Share 15 000
Capital

Issued
ordinary
shares and
recorded
amounts due
on application
and allotment
 18 Cash 15 000

Cash (Trust
Bank 5 000
Account)

Allotment 10 000

Collected
amount due
on allotment
and
transferred
application
amount from
trust bank
account

Aug 3 Call (2 000 x $10 x 1/4) 5 000

Ordinary Share Capital 5 000

Called up balance due on shares

3 Cash 5 000

Call 5 000

Collected call on shares

Req. 2 3 Ordinary Share Capital 20 000

Call (2 000 x $10 x 1/4) 5 000

Forfeited Shares Reserve

15 000
[2 000 x ($10 x 3/4)]

Forfeited 2 000 shares (assume that the company

does not need to return the money to the ex-
shareholders)
E 14-6

Answer:1
Evergreen Capital Ltd

Journal
POST.

DATE ACCOUNTS AND EXPLANATIONS REF. DEBIT CREDIT

Mar. 23 Cash (2 300 x $15) 34 500

Ordinary Share Capital 34 500

Issued ordinary shares for cash

Apr. 12 Inventory 23 000

Equipment 20 000
 Ordinary Share Capital 43 000

Issued 3 200 ordinary shares in exchange for

inventory and equipment.

17 Cash (900 x $20) 18 000

Preference Share Capital 18 000

Issued preference shares for cash.

Aanswer:2

Shareholders’ Equity
Share capital:

5 500 ordinary shares issued $ 77 500*

900 preference shares issued 18 000

Total paid-up capital 95 500

Retained earnings 79 000

Total shareholders’ equity $174 500

P 14-5

Answer: 1
First-year operations were profitable, as shown by the Retained Earnings balance of $29 000.

Answer:2
The issue price of the ordinary shares was approximately $1.67 ($102 000 / 61 000 shares).
[The company may have issued various lots of shares at different prices during the year; or may have
issued a block of shares for a fixed total amount.]

Answer:3
Lincoin Priest Ltd

Jourrnal

POST.

DATE ACCOUNTS AND EXPLANATIONS REF. DEBIT CREDIT

a. Application and Allotment (2 400 x $5 x .50) 6 000

Ordinary Share Capital 6 000

Cash 6 000

Application and Allotment 6 000

b. Cash (2 600 x $20) 52 000

Preference Share Capital 52 000

c. Call (2 400 x $2.50) 6 000

Ordinary Share Capital 6 000

Cash 6 000

Call 6 000

d. Income Summary 74 000

Retained Earnings 74 000

Answer:4

Contributed equity:
 63 400* Ordinary shares, fully paid $114 000**

2 600 Preference shares, fully paid 52 000

166 000

Retained earnings ($29 000 + $74 000) 103 000

Total shareholders’ equity $269 000

Answer:5

Lincoln-Priest will expect to pay $3 640 in annual cash dividends on its preference shares.

(2 600 shares x $1.40 per share = $3 640)