Question 1 Share capital of OZ Ltd at 31 March 2019 was as follows: 300 000 ordinary shares at an issue price of $4 each paid to $2.50, and 100 000 preference shares at an issue price of $4 each paid to $2. At that date, a further call of $1.50 on ordinary shares and $2 on preference shares was made. During the 3 months to 30 June 2019, all calls were duly received except those on 5000 preference shares which were forfeited as at 30 June 2019. To bring capital back to the original amount of issued capital, the forfeited shares were offered to an investment company at a price of $3.50 per share paid to $4 and the transfer was completed on 30 September 2019. According to the company's constitution, shareholders' equity in forfeited shares must be refunded to them. On 31 October, the previous owner of forfeited shares received a refund cheque for the amount due, less selling costs of $720. Required: Show journal entries with proper narrations to implement the above transactions.
Question 1 Share capital of OZ Ltd at 31 March 2019 was as follows: 300 000 ordinary shares at an issue price of $4 each paid to $2.50, and 100 000 preference shares at an issue price of $4 each paid to $2. At that date, a further call of $1.50 on ordinary shares and $2 on preference shares was made. During the 3 months to 30 June 2019, all calls were duly received except those on 5000 preference shares which were forfeited as at 30 June 2019. To bring capital back to the original amount of issued capital, the forfeited shares were offered to an investment company at a price of $3.50 per share paid to $4 and the transfer was completed on 30 September 2019. According to the company's constitution, shareholders' equity in forfeited shares must be refunded to them. On 31 October, the previous owner of forfeited shares received a refund cheque for the amount due, less selling costs of $720. Required: Show journal entries with proper narrations to implement the above transactions.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 18E: Monona Company reported net income of 29,975 for 2019. During all of 2019, Monona had 1,000 shares...
Related questions
Question
Please do not give solution in image format thanku
![Question 1
Share capital of OZ Ltd at 31 March 2019 was as follows: 300 000 ordinary shares at an issue
price of $4 each paid to $2.50, and 100 000 preference shares at an issue price of $4 each
paid to $2.
At that date, a further call of $1.50 on ordinary shares and $2 on preference shares was made.
During the 3 months to 30 June 2019, all calls were duly received except those on 5000
preference shares which were forfeited as at 30 June 2019.
To bring capital back to the original amount of issued capital, the forfeited shares were offered
to an investment company at a price of $3.50 per share paid to $4 and the transfer was
completed on 30 September 2019.
According to the company's constitution, shareholders' equity in forfeited shares must be
refunded to them. On 31 October, the previous owner of forfeited shares received a refund
cheque for the amount due, less selling costs of $720.
Required:
Show journal entries with proper narrations to implement the above transactions.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc6417a73-df1a-49f0-a1f4-45b871598085%2F8418203c-fb9c-4448-a5a7-8b2ac17bab26%2F14gp5ls_processed.png&w=3840&q=75)
Transcribed Image Text:Question 1
Share capital of OZ Ltd at 31 March 2019 was as follows: 300 000 ordinary shares at an issue
price of $4 each paid to $2.50, and 100 000 preference shares at an issue price of $4 each
paid to $2.
At that date, a further call of $1.50 on ordinary shares and $2 on preference shares was made.
During the 3 months to 30 June 2019, all calls were duly received except those on 5000
preference shares which were forfeited as at 30 June 2019.
To bring capital back to the original amount of issued capital, the forfeited shares were offered
to an investment company at a price of $3.50 per share paid to $4 and the transfer was
completed on 30 September 2019.
According to the company's constitution, shareholders' equity in forfeited shares must be
refunded to them. On 31 October, the previous owner of forfeited shares received a refund
cheque for the amount due, less selling costs of $720.
Required:
Show journal entries with proper narrations to implement the above transactions.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning