Question 4 Flashcards
Record receipt of application monies
Trust Bank account
- Application account
(to record receipt of all money received during share application)
Record the allotment process
Application account
Allotment account
- Share capital
(application and allotment amounts applied to share capital)
Application account
- Allotment account
(money in application account transferred to cover allotment amount due on shares)
Trust bank account
- Allotment account
(money received for allotment amount due on shares)
Refund monies received relating to unallocated shares
Application account
- Trust bank account
(refund application monies received on unallocated shares)
Transfer remaining funds from trust bank account to operational bank account
Cash at bank
- Trust bank account
(transfer funds for issued capital from trust account to bank account)
If there are any calls in advance money received at time of application
Application Account
- Calls in advance
(being the amount received for calls in advance)
When a call is made
Calls account
- Share capital
(being the share capital for call, which has now been called)
Applying calls in advance
Calls in advance
- Call account
(being the amount received in advance for call)
Receipt of call monies
Cash at bank
- Call account
(being the monies received for call)
Recording of any calls in arrears
Calls in arrears
- Call account
(being the amount unpaid on call)
Record receipt of any calls in arrears moneys
Cash at bank
Calls in arrears
(being monies received for calls in arrears)
Cancellation of shares
Share capital
Calls in arrears
Cash - bank (cancellation cost)
Cash - bank (refund to ex- shareholder)
(being the cancellation of share capital, payment of costs and refund to ex shareholder on shares cancelled)
Forfeiture of shares and reissue at discount
Share capital
- Calls in arrears
- Forfeited shares account (liability)
(forfeit of shares and elimination of arrears owing)
Cash-bank
Forfeited shares account
Share capital
Cash bank (costs of reissue)
Cash bank (refunds)
(being the reissue of shares less discount, with costs deducted, and refund to former shareholder of the remaining balance)
Solvency Test
Made up of two parts
1. Liquidity test (short term focus of current assets exceed current liabilities)
2. Balance Sheet Test (long term focus of total assets exceed total liabilities).
Able to pay its debts as they become due in the normal course of business.
Interim dividend declared and paid (ignoring RWT)
Dividend Paid
Dividend Payable
Dividend Payable
Cash-Bank
Dividend paid with RWT
Dividends Payable
* Cash-Bank - shareholders
* Cash-Bank - paid to IRD for RWT