Tops Ltd was registered on 1 March 2018 with the following authorised share capital:
- 800 000 Ordinary shares
- 350 000 9% preference shares
The following transactions took place for the financial year ended 28 February 2019:
2018
3 March
The company offered 150 000 ordinary shares at R2,00 each to the subscribers to the memorandum (founders of the company) . The founders took up the offer in full and paid for the shares immediately.
15 March
The company offered 100 000 ordinary shares at R3,00 each to the public. The closing date for applications was 10 May 2018.
10 May
Applications for 110 000 shares were received from the public with application monies and the regulatory application documents.
15 May
Shares were allotted to successful applicants.
18 May
Unsuccessful applicants were repaid. The company paid R4 500 in respect of share issue expenses.
2019
30 January
As the company performed better than expected, the directors presented a proposal to declare a dividend of 10 cents per share payable on 28 February 2019. Shareholders approved the proposal at the annual general meeting on 30 January 2019.
28 February
The dividends were paid as approved.
Required:
5.1 Record the above transactions in the general journal for the financial year ended 28 February 2019. (14)
5.2 Explain the difference between a company’s “authorised share capital” and the “Issued share capital”. (1)
NB: Record the date and narration for each journal entry. You may omit the folio number for the journal entries.

Answer rating: 100% (QA)

51 General Journal Entries 2018 March 3 Cash 300000Share Capital Ordinary 300000To record the issue of 150000 ordinary shares to founders at R200 each ... View the full answer