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Problem 2 According to its Articles of Incorporation,ABC PLC has the right to raise 15 million...

Problem 2

According to its Articles of Incorporation,ABC PLC has the right to raise 15 million shares having a face value of $1 each during its lifetime. The Corporation’s balance sheet shows a share capital of 2 million ordinary shares on 31 Dec 2018 having a face value of $1 each. It had cash worth $0.6 million and other assets to the value of 1.8 million. Liabilities were valued at 0.4 million.

Suppose On 1 Jan. 2019, the corporation issued 1 million ordinary shares having face value of $1 each at an issue price of $1.5 per share. As per the terms of the issue, $1.25 per share had been received by the corporation by 10 Jan. 2019 while the remaining amount was received in full on 30 June 2019. The corporation received 100% subscription on its share issue.

As on 10 Jan 2019

  1. What is the issued capital of the corporation?
  2. What is the subscribed capital of the corporation?
  3. What is the paid-up share capital of the corporation?
  4. What is the amount in its share premium account?

As on 30 June 2019

  1. Has the issue been oversubscribed or undersubscribed?
  2. What is the paid-up share capital of the corporation?
  3. What is the amount in its share premium account?
  4. How much cash does the corporation hold on 30 june 2019?
  5. Show the journal entries on 10 Jan. 2019 and 30 June 2019
  6. Show the changes in the balance sheet on 10 Jan. 2019 and 30 June 2019

JOURNAL ENTRIES

Date

Account

Debit/Credit

Amount

10 Jan 2019

30 June 2019

CHANGES IN THE BALANCE SHEET

31st Dec 2018

10th Jan 2019

30th June 2019

Assets:

Cash

Other assets

Total Assets

Liabilities:

Total liabilities

Shareholders’ Equity:

Share capital

Additional paid in capital

Total Shareholders’ equity

Balance sheet total
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