CLASS REVIEW QUESTIONS
Question 1
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 2
Applications were invited by the directors of Gro-small Ltd for 150,000 of its shs. 100
ordinary shares at shs. 115 per share payable as follows:
[Link] 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 180,000 shares and it was decided to deal with these as
follows:
i. To refuse allotment to applicants for 8,000 shares.
ii. To give full allotment to applicants for 22,000 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 400 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 3
Applications were invited by the directors of Vodacom Plc. for 150,000 of its shs.
100 ordinary shares at shs. 120 per share payable as follows:
[Link] per share
On application 1 April 2018 40
On allotment 30 April 2018 (including shs. 20 premium) 50
On first and final call on 31 May 2018 30
Applications were received for 200,000 shares and it was decided to deal with
these as follows:
a. To refuse allotment to applicants for 20,000 shares.
b. To give full allotment to applicants for 30,000 shares.
c. To allot the remainder of the available shares pro-rata among other
applicants.
d. To utilize the surplus received on applications in part payment of
amounts due on allotment.
An applicant, to whom 10,000 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
2018. On 01 October 2018 75% of the share forfeited on 31 July 2018 were re-
issued at price of Shs. 70 per share.
Required:
Show the ledger account to record the transactions above in the Vodacom Plc.
books of account.