QUESTION: Use the
following information to answer the questions that follows
Deep Sea Ltd was registered
with a capital of 120,000
ordinary shares of TZS 100 each. All authorized
shares were then
offered for subscription on the following
terms of payment
-
On application shs 30
due on 24!h Jan 2015
-
On allotment shs 40 due on 15th
April 2015
-
On
first call shs
10 due on 25th September 2015
-
On second call shs 10 due on 25th
Nov 2015
Applications
were received
for 200,000 shares
Directors resolved
to reject applications
for 20,000 shares and refund application money
thereon and Allot shares to remaining applicants, on a
pro rata basis, retaining excess application money against
amounts due on
allotment The payment status on the shares are
as follows
I. Candy
a holder of 1200 shares failed to pay for allotment and both calls
ii. Cindy,
a holder of 600 shares failed to pay for first call
iii. Mandy,
a holder of 400 shares failed to pay for final call
iv. However
Tom, a holder of 800, who managed to pay 1st call money in
advance on
Allotment,
He failed to pay final call.
On November 1st 2015: The director decided to forfeit all shares which were in arrears for
both allotment and first call.On 1m December, 2015 3/4 out of the forfeited shares were re-issued to Mercy at TZS 75 each as fully paid up.
Required:
a)
Prepare Journal entries to reflect the above transactions
b)
Prepare the Statement of
Financial Position of the company as at 31st
Dec 2015
ANSWERS
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