Chapter 29: Company Accounts (2) - Issue of Shares and Loan Notes

Practice 1

LV Berhad has an authorised capital of 500,000 ordinary shares of RM 1 each. The issued
share capital at 31 March 2018 was RM 250,000 which had been issued at par and fully paid.

On 1 April 2018, the company decided to increase the share capital by offering a further
200,000 ordinary shares of RM 1 each at a price of RM 1.60 per share payable as follows:

Per Share
2018 RM
April 1 On application 0.15
May 1 On allotment, including premium 1.25
June 30 On first and final call 0.20
1.60

On 10 April 2018, applications were received for 275,000 shares.

The shares were allotted on 1 May 2018. It was decided to reject 25,000 shares of application,
and allot 250,000 shares on the basis of 4 shares for every 5 shares applied for. The
unsuccessful applicants were being repaid their cash on the same date. The excess application
monies were set off against the allotment monies asked for.

The balance of the allotment monies was received in full on 9 May 2018. The remaining
requested installments were all paid in full.

During the half financial year on 1 October 2018, 8% interim dividends on ordinary shares
were paid. At the end of the year, the directors proposed to pay final dividends of RM 0.30
per ordinary share.

You are required to prepare:

(a) Journal entries (without narrations), to record the above issue of shares;
(b) Ordinary Share Capital Ledger Account;

(c) Statement of Financial Position as at 31 March 2019 (Equity section only);

(d) Calculate the interim and final dividends on ordinary shares.