The trial balance of Allumi Limited as at 30 June 20x9 included these balances:

Additional information:

• The directors of Allumi Limited want to issue another 50 000 shares @ R2/share to the public.

• Share issue expenses will be R4 500 and must be written off.

You are required to:

1. Discuss whether the company may issue shares to the public.

2. What legal requirements should be met before the share issue?

3. Prepare the journal entries to record the share issue. (Narrations are not required.)

Transcribed Image Text:

Authorised and issued share capital (100 000 ordinary shares) Retained earnings 217 500 00 273 000 00