The following information relating to North Point Ltd is available.

North Point Ltd was incorporated on 1 January 2021 and five (5) subscribers undertook to purchase 10,000 $1 ordinary shares each in the company and paid for the shares on 1 January 2021.

1. $2,500 was paid to the solicitors for the formation of the company on 2 January 2021.
2. The directors resolved to issue 500,000 ordinary share payable 50% upon application.Applicants applied for 600,000 shares and 50% each share. The unsuccessful shareholders were refunded on 10 January 2021.
3. The directors made a call of 50 cent for ordinary shares on 1 April 2021 and all call money was received except 10,000 shares.
4. On 1 April 2021 the directors issued 1000 each of 10% Preference shares at $100 each.The applicants paid full amount for the shares and the shares were allotted on 10 April 2021.
5. On 1 June 2021, the directors decided to raise $500,000 by issuing 5,000 each of 8% debentures maturing in 10 years. The debentures were fully subscribed and allotted by 10 June 2021.

Part of the task is to ensure these accounts are allocated to the correct Account Category.

• Cheque Account/Bank Account
• Trust Account
• Debentures 8%
• Share Capital
• 10% Preference Shares
• Calls in Arrears
• Subscribers
• Call account
• Formation costs
• Application account.

a) what type of accounts are the above accounts? (e.g. Asset, Liability, Income, Expenses or Equity)

b) What are the general journal entries using the above accounts and information on North Point Ltd.

c) Show the Balance Sheet and Trial Balance for the above transactions

Answer rating: 100% (QA)

Id be glad to assist you with classifying the accountscreating journal entriesand generating the balance sheet and trial balance for North Point Ltd a ... View the full answer