Module 1 Shareholder S Equity 1

Exercise 2.4 SHARE ISSUE, OPTIONS

Prepare the journal entries in the records of Jordan Ltd in relation to the equity transactions in 2014.

JORDAN LTD

25/3 Cash trust – shares Dr 750 000 Application – shares Cr 750 000 (Applications for shares)

Cash trust – options Dr 10 000 Application – options Cr 10 000 (Applications for options)

2/4 Cash Dr 610 000 Cash trust – shares Cr 600 000 Cash trust – options Cr 10 000 (Transfer on issue of shares and options)

Application – shares Dr 600 000 Share capital Cr 600 000 (Issue of shares)

Application – shares Dr 150 000 Cash trust Cr 150 000 (Refund to unsuccessful applicants)

Application – options Dr 10 000 Options Cr 10 000 (Issue of options)

31/12 Cash Dr 63 000 Share capital Cr 63 000 (Issue of shares on issue of options)

Options Dr 10 000 Share Capital Cr 9 000 Options lapsed reserve Cr 1 000 (Transfer of lapsed options)

Exercise 2.6 ISSUE OF ORDINARY AND PREFERENCE SHARES

Prepare journal entries and ledger accounts to record the following transactions for Kuwait Ltd:

KUWAIT LTD

2015
01/4 NO ENTRY

10/4 Cash trust Dr 210 000 Application – ordinary shares Cr 210 000 (Applications for ordinary shares: 140 000 x $1.50)

Cash trust Dr 170 000 Application – preference shares Cr 170 000 (Applications for preference shares: 85 000 x $2)

15/4 Application – ordinary shares Dr 150 000 Share capital – ordinary Cr 150 000 (Issue of 100 000 shares at $1.50 each)

Application – preference shares Dr 170 000 Receivable from underwriter Dr 30 000 Share capital – preference Cr 200 000 (Issue of 100 000 shares at $2 each)

Cash Dr 320 000 Cash trust Cr 320 000 (Transfer on issue of shares)

Application – ordinary shares Dr 60 000 Cash trust – ordinary shares Cr 60 000 (Refund to unsuccessful applicants: 40 000 x $1.50)

20/4 Share capital – preference Dr 4 000 Share capital – ordinary Dr 500 Cash Dr 25 500 Receivable from