2. ABA SAOG has been incorporated in the year 2020 with an authorized capital of OMR...

 

Transcribed Image Text:

2. ABA SAOG has been incorporated in the year 2020 with an authorized capital of OMR 8,000,000 divided into equity shares of OMR each. For the purpose of incorporation, the company came up with an IPO of 2,500,000 shares at an issue price of OMR 1.750. The IPO was fully taken up. ...... In the year 2020 the following adjustments took place: The company had following balances in its reserves and surplus: OMR Share Premium 50,000 Revaluation Reserve 80,000 Capital Reserve 40,000 Retained Profits 180,000 A. The company came up with a right issue in Jan 2018 in the ratio of 1:5 at an issue price of OMR 2.225, whereas the market value of shares is OMR 3.000. 40% of shareholders have rejected this offer. (1.5 MARKS) B. In June, the company declared a bonus issue in the ratio of 1:7. (1.5 MARK) C. In September, the company managed to acquire a property for its new project from SM developers. The deal was finalized at OMR 250,000, but the developers insisted on settlement in equity shares. The company issued 100,000 equity shares. (1 MARK) D. In December, the company decided to split shares and the face value of each share was reduced to 500 baiza. Such decision was made in order to control the market price. (2 MARKS) You required to pass necessary journal entries, support your answers with necessary working notes and prepare and abstract of balance sheet showing Equity only. 2. ABA SAOG has been incorporated in the year 2020 with an authorized capital of OMR 8,000,000 divided into equity shares of OMR each. For the purpose of incorporation, the company came up with an IPO of 2,500,000 shares at an issue price of OMR 1.750. The IPO was fully taken up. ...... In the year 2020 the following adjustments took place: The company had following balances in its reserves and surplus: OMR Share Premium 50,000 Revaluation Reserve 80,000 Capital Reserve 40,000 Retained Profits 180,000 A. The company came up with a right issue in Jan 2018 in the ratio of 1:5 at an issue price of OMR 2.225, whereas the market value of shares is OMR 3.000. 40% of shareholders have rejected this offer. (1.5 MARKS) B. In June, the company declared a bonus issue in the ratio of 1:7. (1.5 MARK) C. In September, the company managed to acquire a property for its new project from SM developers. The deal was finalized at OMR 250,000, but the developers insisted on settlement in equity shares. The company issued 100,000 equity shares. (1 MARK) D. In December, the company decided to split shares and the face value of each share was reduced to 500 baiza. Such decision was made in order to control the market price. (2 MARKS) You required to pass necessary journal entries, support your answers with necessary working notes and prepare and abstract of balance sheet showing Equity only.

Answer rating: 100% (QA)

Journal entri... View the full answer