1. Ogembo Tea Company Limited has an authorized share capital of Kshs. 10,000,000 ordinary shares of Kshs. 10 each. The shares were issued at par as follows:

Payable on application Kshs. 1.00

Payable on allotment Kshs. 3.00

Payable on first call Kshs. 4.00

Payable on second call Kshs. 2.00

Applications were received from 1,630,000 shares.

It was decided to refund applicants monies on 130,000 shares and to allot all the shares on the basis of two for every three applied for.

The excess application monies received from the successful applicants is to be refunded but is to be applied to reduce the amount payable on allotment.

The calls were made and paid in full with the exception of one member of one member holding 5,000 shares who paid neither the first not the second call and another member who did not pay second call on 1,000 shares. After requisite action by the directors the shares were forfeited. They were later reissue at a price of Shs. 8 per share.

Required:

The necessary ledger accounts to record these transactions. (10 marks).

Answer rating: 100% (QA)

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