TANZANIA INSTITUTE OF ACCOUNTANCY

BARCHELOR DEGREE IN ACCOUNTING II

INTERMEDIATE FINANCIAL ACCOUNTING
COMPANY ACCOUNTING REVIEW QUESTIONS
Question 1:
Lucky Company, Ltd. invited subscription for 20,000 ordinary shares at shs. 100 par value with
the following arrangement: shs. 50 payable on application and allotment, shs. 30 on first call and
shs. 20 on final call. Shareholder who own 1000 shares failed to pay first and final call. These
shares were forfeited after the final call.
Required:
Show the journal entries in Lucky’s book of accounts

Question 2:
Tumaini owned 100 ordinary shares of shs. 500 par value of Pugu Company Ltd on 1st June, 2009.
Dividends of 80 per share were declared on 15th June for shareholders on record as at 30th June,
and payable on 31st July, 2009. On 20th June, 2009 Tumaini sold 30 shares of Pugu Company,
and on 10th July, 2009 he sold another 20 shares of Pugu Company.
Required:
Calculate the amount of dividend Tumaini will receive for his shareholding.

Question 3:
Vutakamba Co. Ltd, with an authorized capital of shs. 150,000,000 and issued capital of shs.
100,000,000 all in shs. 100 ordinary shares, issues the remaining shares for cash at a price of shs.
180. shs. 30 payable on application, shs. 100 on allotment (including the shs. 80 premium), and
shs. 50 on first and final call.
The accounting year ends on 31st December. Applications are received for 2,500,000 shares; small
applications for 1,000,000 shares are rejected, and the application money returned on 8 April,
seven days after being received. On the same day the whole issue is allotted to the remaining
applicants pro-rata. The allotment moneys are all received by 30 April. The first and final call is
made on 1 June, and the call moneys received by 30 June, except those on 800 shares. These are
forfeited on 31 December.
Required:
Show how the above events would be recorded in general ledger accounts
Question 4:
Applications were invited by the directors of Gro-small Ltd for 1,500 of its shs. 100 ordinary shares
at shs. 115 per share payable as follows:

T.Shs per share

On application 1 April 19-3 75
On allotment 30 April 19-3 (including shs. 15 premium) 20
On first and final call on 31 May 19-3 20
Applications were received for 1800 shares and it was decided to deal with these as follows:
i. To refuse allotment to applicants for 80 shares.
ii. To give full allotment to applicants for 220 shares.
iii. To allot the remainder of the available shares pro-rata among other applicants.
iv. To utilise the surplus received on applications in part payment of amounts due on
allotment.
An applicant, to whom 4 shares had been allotted failed to pay the amount due on the first and
final call and his shares were declared forfeited on 31 July 19-3.
Required:
Show how the transactions above would be recorded in the company's books.

Question 5
The Azam Co. Ltd was registered with a capital of 100,000 ordinary shares of shs. 100 each and
20,000, 6% preference shares of shs. 100 each. No preference shares had been issued but 40,000
ordinary shares had been issued at par and were fully paid.
All the remaining authorised capital was then offered for subscription on the following terms:

Ordinary Preference
T.Shs. T.Shs.
On Application 25.00 12.50
On allotment 37.50 37.50
On First Call 25.00 25.00
On Second Call 12.50 37.50
Applications were received for 73,120 ordinary shares and 18,200 preference shares. One
application for 1,000 ordinary shares was refused. With the exception of the application money on
these shares, the excess application money was retained against the allotment money due.
The first and second call money on 600 preference shares was received with the allotment money.
All sums due were received except the first and second call money on 800 ordinary shares.
Sometime later those 800 ordinary shares were forfeited for non-payment of the first and second
calls and 600 of the forfeited shares were then re-issued as fully-paid for shs. 75 each.
Required:
Ledger accounts (including bank account) recording the above.