The trial balance of Alfredo Limited as at 31 December 20x6 included these balances:

The newly appointed bookkeeper of Alfredo Limited has approached you to assist him with these questions (each question should be treated separately):

1. What is the minimum value at which the company may issue further ordinary shares in terms of the Companies Act?

2. If the directors decide to issue capitalisation shares in the ratio of one ordinary share for every two ordinary shares already held, which accounts can be used to journalise the capitalisation issue?

3. Which accounts can be used if the preliminary expenses were to be written off?

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Ordinary share capital (120 000 ordinary shares) 100 000 preference shares (fixed annual dividend of 15c/share) Retained earnings Asset replacement reserve Reserve for the replacement of machinery Preliminary expenses 210 000 00 50 000 00 176 000 00 10 000 00 25 000 00 18 000 00