QUESTION 1 On 7 November 2019, El Hadid Bhd issued a prospectus inviting...
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Accounting
QUESTION 1
On 7 November 2019, El Hadid Bhd issued a prospectus inviting subscription of shares payable in full application. The Company issued 7,000,000 ordinary shares at RM2 each. The Company also issued 700,000 preference shares at RM 3 each. The Followings are the details of share issuance transaction for the year ended 2019 :-
Date
Transaction
Total unit of shares
2 December
Received application money for ordinary shares
7,500,000
10 December
Received application money for preference shares
700,000
25 December
Shares alotted to both successful applicants ordinary shares and preference shares
Ordinary shares 7,000,000
Preference shares 700,000
30 December
Refund application money to unsuccessful applicants
500,000
31 December
Plans to raise capital through a renounceable one for eight rights issue at RM1 each to existing shareholder
General reserve of the company is RM1,200,000. Bank balance is RM300,000.
You are required to prepare the following :-
i) Journal entries for the above transaction (without narrations)(14 marks)
ii) Statement of Financial Position (Extract) as at 31 December 2019 (6 marks)
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