QUESTION 3 [30 MARKS] (a) The Conceptual Framework' states that 'financial information is useful if it is relevant and faithfully represents what it purports to represent and identifies three fundamental qualitative characteristics of useful information namely: Relevance, Materiality and Faithful Representation. Write a brief note on two of these three fundamental qualitative characteristics. [8 marks] (b) List six different users of financial reports and give examples of their likely information needs. [6 marks] (c) Hercules Ltd issued 100,000 $2.00 shares at $2.80 per share. Monies due were as follows: On Application: $1.60 including premium On Allotment: $0.80 Call: $0.40 . Applications were received for 120,000 shares with the excess applications returned on application. At the call stage, 2,000 shares were forfeited. These were subsequently reissued for $2.00 cash. REQUIRED (i) Write up the relevant journal entries, including narratives, for the above issue of shares. [12 Marks] (ii) Discuss what is meant by the terms 'Call' and 'Forfeiture' [4 Marks] QUESTION 3 [30 MARKS] (a) The Conceptual Framework' states that 'financial information is useful if it is relevant and faithfully represents what it purports to represent and identifies three fundamental qualitative characteristics of useful information namely: Relevance, Materiality and Faithful Representation. Write a brief note on two of these three fundamental qualitative characteristics. [8 marks] (b) List six different users of financial reports and give examples of their likely information needs. [6 marks] (c) Hercules Ltd issued 100,000 $2.00 shares at $2.80 per share. Monies due were as follows: On Application: $1.60 including premium On Allotment: $0.80 Call: $0.40 . Applications were received for 120,000 shares with the excess applications returned on application. At the call stage, 2,000 shares were forfeited. These were subsequently reissued for $2.00 cash. REQUIRED (i) Write up the relevant journal entries, including narratives, for the above issue of shares. [12 Marks] (ii) Discuss what is meant by the terms 'Call' and 'Forfeiture' [4 Marks]