Tasteless Tea Company Eaasy

Tasteless Tea Company Eaasy

HA2032 Corporate Accounting
Trimester 1   2011

                                                  ASSESSMENT   1
A) Solutions :
                      Merliah Ltd journal entries


During the august
                      Trust account                                                   Dr. $ 7,000,000
                      Application (14,000,00 x0.5)                           Cr. $7,000,000
                   
(To record of application money held in trust)

                    Application (10,000,000 x0.5)                         Dr. $ 5,000,000
                    Allotment (10,000,000 x0.4)                           Dr. $4,000,000
                    Paid –up capital                                                 Cr. $9,000,000

(To issue 10,000,000 shares &record amounts due on application & allotment)


                    Cash at Bank                                                   Dr. $7,000,000
                    Trust account                                                   Cr. $7,000,000

(To transfer application money to company’s bank account )

                    Application                                                     Dr. $2,000,000
                    Cash at bank                                                   Dr. $2,000,000
                    Allotment                                                       Cr. $4,000,000

(To apply access application money to amount sue on allotment )

As per the question the first & final call at $0.10 per share is not paid on 200,000 of the 10,000,000 issued shares and those 2,000,000 are forfeited.   Hence, the transactions are recorded as   follows:-

31 Dec 2011
                          Call   (8,000,000 x0.10)                                   Dr. $800,000
                          Paid –up capital                                                 Cr. $800,000

(To call-up balance outstanding on $800,000 partly paid shares)...