WITHIN 24HOURS ***

Exercise 3.14 RIGHTS ISSUES AND PLACEMENT OF SHARES

K AS *

At 1 July 2013 Surf Cat Ltd reported that it had a share capital of $800 000 resulting from the issue of 400 000 shares. The following transactions occurred during the year ended 30 June 2014:

1.  On 10 August 2013, a renounceable one­for­two rights issue was made to existing shareholders.The issue price was $2 per share, payable in full on application. The issue was underwritten for a commission of $6500. The issue closed fully subscribed on 31 August, the holders of 80 000 shares having transferred their rights. The underwriting commission was paid on 4 September.

2.  On 10 February 2014, 20 000 shares were privately placed with Sandy Dog Finance andSuperannuation Ltd at $2 per share.

Required

Prepare the general journal entries to record the above transactions

Exercise 3.15 DIVIDENDS, CALLS ON SHARES AND BONUS ISSUES

K AS * *

The equity of Sea Horse Ltd at 1 January 2014 was as follows:

Share capital

      600 000 shares fully paid                                     $600 000                       

      400 000 shares issued for $1 and paid to 50c      200 000     $   800 000

      General reserve                                                                               200 000

      Plant maintenance reserve                                                               50 000

      Retained earnings                                                                              80 000

       Total equity                                                                                $1 130 000

The following events occurred during the year:

Required

(a)   Prepare the journal entries to give effect to the above events.

(b)  Prepare the equity section of the statement of financial position at 31 December 2014.