Question $2$

$(20$ Marks$)$

Malthus Limited was incorporated on $1$ March $2010$ with an authorised share capital of $5000000$ ordinary shares of $N$$$10$ each with an issued capital of $2000000$ ordinary shares.

Relevant balance as at $1$ March $2022$:

N$

$20000000$

$4556256$

$3300000$

$568137$

On $1$ April $2022,$ the directors approved a capitalisation issue of $1$ shares for every $5$ ordinary shares held at par. This was done so that there was a minimum impact on retained earnings.

On $10$ May $2022,1000000$ of the shares were offered to the public at a premium of $N$$$2\mathrm{.}50$ per share. The full Public issue is underwritten by Finesse Limited for a $2\mathrm{.}5\%$ underwriter's commission. The closing date for the share application was $30$ June $2022.$

The public subscribed for $950000$ shares and the full amounts were received on or before the closing date. All the shares were allotted on $20$ July $2022.$

Share issue expenses of $N$$$7500$ were paid and all transactions with the underwriter were concluded by $31$ July $2022.$ All expenses regarding the share issue must be written off against the Share Premium Account.

On $28$ February $2023$:

i$.$ Profit for the period amounted $N$$$950650.$ Tax assessed on the business amounted to $N$$$256893.$

ii$.$ Land valued at $N$$$650000$ was revalued to $N$$$1000000.$

The directors proposed:

i$.$ To write of the share issue expenses and use share premium account for this purpose.

ii$.$ To transfer $N$$$500000$ to general reserve.

iii. An ordinary shares dividend of $35$ cents per share to be paid on $1$ March $2023.$

REQUIRED:

Record the transactions for the period in the General Journal of Malthus Limited. Journal narrations are not required. $(20$ marks$)$