Question: Audrey Limited invited applications for 200,000 of its £1 Ordinary Shares on the following terms: Payable on application on 31st January 10/- per share
Payable on allotment on 28th February (including the premium of 1/- per share) 6/- per share Payable on first and final call on 30th June 5/- per share
Applications for 250,000 shares were received. It was decided:
(a) to refuse allotment to the applicants for 10,000 shares;
(b) to allot in full to the applicants for 40,000 shares;
(c) to allot the balance of the available shares pro rata among the other applicants;
(d) to utilise excess application money in part payment of allotment money. One applicant to whom shares had been allotted in full did not pay the amount due on call and his 200 shares were forfeited. The shares were re-issued on 31st October, at 18s.
Show the Journal and Cash Book entries necessary to record the foregoing.
Re-printed by courtesy of the Society of Incorporated Accountants (S.A.A.).