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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

16 Oct 2021: To assist with cashflow difficulties the company isued a prospectus inviting offers for 40000 options to acquire A ordinary share at a issue price of $2 per option, payable in full on application. Each option exercisable on 31 December 2021 allowed the holder to acquire one A ordinary share for $3.

31 Dec 2021: Offers wrer received for 30000 options and these were duly alloted.

The holders of 25000 options exercised their options and 25000 A ordinary shares were alloted. The remaining time lapsed

Required

Prepare journal entries to record the following transaction in the records of Gold Ltd.(show all workings)

The share capital of Gold Ltd on 30 June 2021 was:
Share capital:
200 000 'A' ordinary shares issued at $3 paid to $2.00
$400,000
100,000 'B' ordinary shares issued at $2, fully paid
$200,000
S600,000

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