On 1 August 2016, NBS Ltd was incorporated and a prospectus was issued inviting applications for 200,000 ordinary shares to the public at an issue price of $8, payable as follows:

$4 on application (due by closing date of 1 October)

$2 on allotment (due 1 November)

$2 on final call/calls (to be determined by the directors)

By 1 October, applications had been received for 230,000 ordinary shares of which applicants for 50 000 shares forwarded the full $8 per share, applicants for 100 000 shares forwarded $6 per share and the remainder forwarded only the application money.

At a directors’ meeting on 7 October, it was decided to allot shares in full to applicants who had paid the either $8 or $6 on application, to reject applications for 20 000 shares and to proportionally allocate shares to all remaining applicants. According to the company’s constitution, all surplus money from application can be transferred to Allotment and/or Call accounts. All outstanding allotment money was received by the due date. Legal costs of forming the company were $2 000 and were paid on 11 October. Share issue costs of $10 000 were also paid on the same date.

Required:

1. Prepare general journal entries to record the above transactions of NBS Ltd. Narrations are not required.

2. Calculate the amount of share capital in the statement of financial position of NBS Ltd as at 30 June 2017 (Show all workings.)

Answer rating: 100% (QA)

Journal entries date particulars dr cr 1102016 bank ac dr 1320000 To share application 1320000 appli... View the full answer