Established in $2021,$ NexaTech Innovations Ltd$.($Nexa$)$ specialises in designing tailored applications for diverse business sectors$.$ Recognised in the technological industry for its innovative solutions, the company has carved out a significant market presence as of its year$-$end on $31$ December $2023.$

You have been presented with the following information:

Extract of the final trail balance as at $30$ November $2023$:

Account

Debit$/($Credit$)$

Rand

Share Capital: Class A shares $(2000$ shares$)$

$(240000)$

Shareholders for dividends liability

$(12000)$

Prospectus Extract for Share Offerings to the Public

Date of Issue: $01$ December $2023$

Offer details

Class A shares

$20\%$ Class B shares

Available shares

$1000$

$500$

Price per share

R$120$

R$450$

Important Dates:

Opening date for applications: $01$ December $2023$

Closing date for applications: $24$ December $2023$

Share issuance: $31$ December $2023*$

$*$ Subject to meeting minimum subscription criteria.

Minimum subscription requirement

Class A shares: $80\%$

$20\%$ Class B shares: $80\%$

$3$ HFAC$132-1-$Jan$-$Jun$2024-$SA$1-$LVN$-$V$3-20240130$

Additional information:

$$ After the closing date of $24$ December $2023,$ the amount of cash that has been received, per class of share subscribed for, were the following:

o Class A shares account: R$98400$

o $20\%$ Class B shares account: R$175500$

$$ On the $24$th of December $2023,$ Nexa incurred and paid the following costs regarding the additional share application and distribution:

o Legal fees of R$14700$ for drafting the prospectus, ensuring regulatory compliance, and other legal services.

o Printing and distribution of the prospectus was R$2500.$ This includes physical printing and electronic distribution fees.

o Registration and regulatory fees of R$1250$ for association with regulatory bodies.

o Consultancy fees of R$7500$ for hiring financial consultants or advisors to guide the offering process.

o Overtime bonus of R$5000$ paid to the accountant for ensuring the annual financial statements are in line with the International Financial Reporting Standards.

$$ On $31$ December $2023,$ the company declared a final dividend of R$5$ per share. This means shareholders will receive a dividend of R$5$ for each share they own.

$$ The company paid all dividends on $31$ December $2023$ to ensure that there were no divided liabilities outstanding at the financial year$-$end.

$4$ HFAC$132-1-$Jan$-$Jun$2024-$SA$1-$LVN$-$V$3-20240130$

REQUIRED:

$1\mathrm{.}1$ Calculate and explain the number of shares to be issued by NexaTech Innovations Ltd$.$ to the new shareholders for both Class A shares and $20\%$ Class B shares on $31$ December $2023.$

$(6$ marks$)$

$1\mathrm{.}2$ Prepare ALL the relevant general journal entries in the December $2023$ accounting records of NexaTech Innovations Ltd$.$ to account for the following:

$1\mathrm{.}2\mathrm{.}1.$ The new Class A and $20\%$ Class B shares issued; and

$(17$ marks$)$

$1\mathrm{.}2\mathrm{.}2.$ Payment of dividends to the shareholders

$(6$ marks$)$

Instructions:

$$ Include dates for each entry.

$$ Narrations are not required.

$$ Provide detailed workings where necessary.

$1\mathrm{.}3$ Assume that instead of R$175000,$ NexaTech Innovations Ltd$.$ received R$236250$ in cash for subscriptions to the $20\%$ Class B shares by the close of business on $24$ December $2023.$

Prepare the general journal entries to illustrate how to account for the $20\%$ Class B shares only.

Instructions:

$$ Dates and narrations are not required.