In July 2019, Mooloolaba Ltd calls for public subscriptions for 10 million shares.

The issue price per share is $1.20, to be paid in three parts, these being $0.50 on application, $0.40 within one month of the shares being allotted and $0.30 within two months of the first and final call, with the call for final payment being payable on 1 September 2019.

By the end of July, when applications close, applications have been received for 12 million shares; that is, two million in excess of the amount to be allotted.

\fSolution (continued) We will assume that the excess funds are used to offset the amount due on allotment ($0.40 per share), and that all subscribers will receive an allotment of shares on a pro rata basis. 1 August 2019 Dr Application 5 000 000 Cr Share capital 5 000 000 (to allot the shares as partly paid to $0.50) Dr Allotment 4 000 000 Dr Call 3 000 000 Cr Share capital 7 000 000 Dr Application 1 000 000 Cr Allotment 1 000 000 Dr Cash at bank 6 000 000 Cr Bank trust 6 000 000Solution (continued) 30 August 2019 Dr Cash at bank 3 000 000 Cr Allotment 3 000 000 (to recognise the receipt of amounts due on allotment) It is assumed that all amounts due on allotment are paid 1 September 2019 Dr Cash at bank 3 000 000 Cr Call 3 000 000