Question

Hi, I had a question in regards to the problem below. In this current period, the...

Hi,

I had a question in regards to the problem below.

In this current period, the company issued the following shares:

?1 200 000 ordinary shares at an issue price of $3.50 issued on 1 Feb 2018

?These were called & paid to $3.00 as of allotment on 31 March 2018. In relation to this issue $28 000 share issue costs were incurred, and these were paid by the company in Feb 2018. On 30 June 2018 the company made a first and final call for the remaining unpaid/uncalled portion of the share issue price for the shares issued on 1 Feb 2018. All call money was recieved by 28 Aug 2018.

FURTHER INFO:

YOU SHOULD ASSUME THAT THE COMPANY IS A REPORTING ENTITY AND THAT THE DATE THE ANNUAL REPORT (INCLUDING THE FINANCIAL REPORT IS AUTHORISED FOR ISSUE IS AT 15TH SEPT 2018.

My question is that 30 June is the end of the financial year and the call was paid in August. Do I show the call in arrears as less calls in arrears $ 600 000 on the statement of financial position under share capital, and then disclose that it was paid in the notes. My other question is I don't need to show share issue costs on the statements do I?


Thanks in advance for any help

Homework Answers

Answer #1

Answer of Ist question : You need to show as less call in arres from paid up share capital : $600000

Answer of 2nd Question : Expenditure incurred related with issue of shares is categorized as 'Miscellaneous Expenditure uner asset side of balance sheet. Share issue expenses include the following expenses. This is not an exhaustive list:

1. Money paid for preparation of project report.

2. Fees paid to solicitors, consultants and legal advisors.

3. Payments made to underwriters and lead managers etc.

4. Printing charges of prospectus and applications etc.

5. Amount spent on advertisement of the issue.

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