Page 27 - Ebook Financial Accounting 3
P. 27
Example 2.2
nd
Zear Bhd was incorporated on 2 January 2020, and it offer for subscription an initial offering
of 30,000,000 ordinary shares at a price of RM3 per shares. Application for 15,000,000 shares
were received from institutional investors and applications for 20,000,000 shares were from
retail investors. Application closed on 31 January 2020 and all the money due was received.
The money received on the oversubscribed shares from the retail investors was refunded.
Allotment shares was completed by 14 February 2020.
Required:
Show the necessary journal entries and prepare the statement of financial position upon
completion of the above transaction.
Answer:
Item Dr Cr
Bank 105,000,000
Application 105,000,000
(Amount received on application) (35m x RM3)
Application 90,000,000
Share Capital 90,000,000
(Application money transferred to share capital)
(30m x RM3)
Application 15,000,000
Bank 15,000,000
(Refund to unsuccessful applicants) (5m x RM3)
Extract from the Statement of Financial Position of Zear Bhd
as at 14 February 2020
RM
Equity
Issued share capital
30,000,000 ordinary shares, fully paid 90,000,000
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