Question 1: KK Limited issued 400 000 ordinary shares of P1 each at par payable 50t on

application, 20t on allotment and 30t on call. Payment was required as follows:
On application 50t (1st July 2017);
On allotment 20t (10th July 2017);
On final call 30t (10 August 2017).
All these shares were fully subscribed and the moneys were received in time.
Required to prepare necessary ledger accounts in the books of the company to record the above
transactions.

Question 2 XYX Company Ltd. offered 20,000 Ordinary shares of P10 each for public subscription.
Following are the details on instalments payable:
On application P2 per share
On allotment P3 per share
On first call P3 per share
On final call P2 per share

Applications were received for 24 000 shares and the company refunded the excess application
money on 4 000 shares.
Money due from all shareholders were received in time except from two shareholders who failed
to pay the final call money on 200 shares held by each of them.
Required to prepare necessary ledger accounts in the books of the company to record the above
transactions.

Question 3: To raise more capital, KK Limited issued 400 000 ordinary shares of P1 each at P1.20
payable
50t on application,
40t on allotment (including premium)
And 30t on call.
Payment was required as follows:
On application: 1st April 2017; on allotment: 30th April 2017 and Final call 30 June 2017.
All these shares were fully subscribed and the moneys were received in time.
You are required to prepare necessary ledger accounts to record the above transactions.

Question 4: JJ Company Ltd., decided to offer 2 000 Ordinary shares to the public at a value of
P20 per share.
Investors have to pay: P5 on application
P6 on allotment
P6 on first call
P3 on final call.
The company received application for 3 300 shares.
The directors decided to return the application money on 300 shares as they were totally
rejected.
Part allotment (2 for 3 basis) was made to the remaining applicants and the excess application
money received were retained for adjustments against future instalments due from them.
All allotment and first call moneys were received in time.
One shareholder holding 500 shares failed to pay the final call money.
Required: Prepare necessary ledger accounts in the books of the company to record the above
transactions.
Also, show the Statement of Financial Position Extract.

Question 5: RSQ Ltd.; has an authorised capital of 1 600 000 ordinary shares of P2 each, of which
1 000 000 have already been issued at par and are fully paid. In order to finance an expansion
programme, the company issued the remainder of share capital at a price of P3 per share,
payable as follows:
On application 50t per share
On allotment (including premium) 1.25t per share
On first call 75t per share
On final call 50t per share.
Applications were received for 900 000 shares.
Of these, 200 000 were rejected and the money repaid to the applicants;
The remainder were allotted pro rata on a 6 for 7 basis and the surplus application money was
retained for adjustment against future instalments.
The calls were duly made and the amounts received except that a holder of 2 000 shares paid the
final call money along with the first call
And a holder of 4 000 shares failed to pay either call.
After the formalities had been concluded, these shares were cancelled but were subsequently
reissued to Mr. Mmerki on payment of P1.50 per share.
Required: Prepare necessary ledger accounts in the books of the company to record the above
transactions.
Question 6: The ZZ Company Limited was registered with a capital of 200 000 ordinary shares of
P1 each and 40 000 10% preference shares of P1 each. No preference shares had been issued but
80 000 ordinary shares had been issued at par and were fully paid. All the remaining authorised
capital was then offered for subscription on the following terms:
Ordinary Preference
On application 25t 20t
On allotment 40t 60t
(Including premium)
On final call 35t 40t
Applications were received for 140 000 ordinary shares and 36 000 preference shares.
One application for 2 000 ordinary shares was refused; with the exception of the application
money on these shares the excess application money was retained against the allotment money
due.
The final call money on 1 200 preference shares was received with the allotment money.
All the sums due were received except the final call on 1 200 preference shares from the
shareholder who had paid the money in advance.
Required: Necessary ledger accounts to record the above in the books of ZZ Company Limited.
Question 7: LL Limited was registered with a capital of P100 000 ordinary shares of P1 each. The
company invited public to subscribe for 80 000 shares payable as follows:
On application 50t
On allotment (including premium 20t) 50t
On call 20t
The number of shares applied for was 90 000. The directors proceeded to allotment and by
scaling down the applications they accepted every applicant as a shareholder. All the surplus
application money was retained against the allotment money due. All allotment money was
received in time.
The call was made and was paid by all except the holders of 2 000 shares and these shares were
forfeited. The cancelled shares were then reissued to Mr. Thomson as fully paid at 80t each for
cash.
Required: Prepare necessary ledger accounts in the books of the company to record the above
transactions.
Question 8 KK Limited made a new offer of 100 000 ordinary shares of P1 each, payment to be
made as follows:
On application 60t per share
On allotment (including premium of 40t) 50t per share
On first and final call 30t per share
Applications for 200 000 shares were received and it was decided to deal with them as follows:
To return cheques for 75 000 shares
To accept in full applications for 25 000 shares
To allot the remaining shares on the basis of three shares for every four shares applied for.
On the first and final call, one applicant who had been allotted 5 000 shares failed to pay the due
amount and his shares were duly declared forfeited. They were then reissued to Mr. Paledi at a
price of 90t and was paid in full.

Question 9: Given below are the selected items in the Statement of Financial Position of XYZ Ltd.

Net Assets (excluding Bank) 15 000

Bank 10 000
Ordinary Share capital: P1 shares 10 000
Preference Share Capital 5 000
Profit and loss appropriation/Distributable profits 10 000
Prepare necessary ledger accounts for each of the following independent events:
1. On 1st August the company decided to redeem the preference shares at par. In order to
do so, a new issue was made of 5 000 ordinary P1 shares at par.
2. On 1st August the company decided to redeem the preference shares at par. The company
however, did not make any new issue of shares for this purpose.
3. On 1st August the decided to redeem the preference shares at par. The company issued 3
000 ordinary shares of P1 each at par.
Question 10: Following balances were extracted from the books of PP Limited:

Ordinary share of P2 each 200 000

10% Preference Share Capital (Originally issued at par) 100 000
Share Premium 80 000
Profit and loss and appropriation/Distributable profits 150 000
The company decided to redeem the preference shares at a premium of 5%. No new issue of
shares were made for this purpose. Prepare necessary Ledger accounts

Redemption of preference shares that were originally issued at premium: When shares are
being redeemed or purchased at a premium that were originally issued at a premium, and the
new issue of shares is being made for the purpose at a premium, then the share premium that
can be taken from the share premium account to pay premium on redemption will be the lesser
of premium that were received when it first issued the shares now being redeemed or balance
after the new issue.

Question 11: Prepare necessary ledger accounts for each of following three companies to record
a redemption of P4 000 preference shares, which were originally issued at a premium of 20%. All
the companies decided to redeem the preference shares at 25%.

1. Company A: This company issued 4 800 ordinary shares of P1 each at par. The company
had already used P600 of the share premium received from the issue of preference shares
for issue of bonus shares and only P200 left in the account.
2. Company B: This company issued 4 000 ordinary shares of P1 each at a premium of 20%.
The company had not used the share premium received from the issue of preference
shares. The account, therefore, has a balance of P800.
3. Company C: This company issued 3 200 ordinary shares of P1 each at a premium of 50%.
This company had not used the share premium received from the issue of preference
shares. The account, therefore, has a balance of P800.

Question 12:
CC Limited has an authorised share capital of 1 000 000 ordinary shares of P10 each and 50 000
5% Preference shares of P 5 each. The company had already issued 800 000 ordinary shares of P
10 each and 30 000 5% preference shares which were all fully called and paid up. On 1st July
2017, the company decided to issue the remaining 200 000 ordinary shares and 20 000
preference shares to the public. The payments are to be made as follows:
Ordinary shares: On application P2 per share; On allotment (including premium P2) P6; Final call
P4.
Preference shares: On application P1 per share; On allotment (including premium P2) P3; Final
call P3.
The company received applications for 400 000 Ordinary shares and 40 000 Preference shares.
Application monies for 100 000 ordinary shares and 10 000 preference shares were returned and
the balance shares were allotted on pro rata basis. Allotment monies for ordinary and preference
shares were received in full. A shareholder holding 1 000 ordinary shares paid the final call money
along with the allotment money. One shareholder holding 500 ordinary shares and another
holding 600 preference shares did not pay the final call. The 500 ordinary shares and 600
preference shares were then forfeited and subsequently reissued as follows: 500 ordinary shares
were sold to Mphela at P9 per share and 600 preference shares were sold to Paul at P4 each.
Required: Prepare necessary ledger accounts to record the above transactions. Also show the
extract of the companys Balance sheet after the issue had been completed.

Question 13: CC Limited issued P5000 10% debentures of P100 each at par; money to be received
as follows: On application P40 per debenture; on allotment 40 per debenture; on final call P20
per debenture. The company received applications for 7 000 Debentures. Application for 1000
debentures were returned and the balance were allotted pro rata. All money due from debenture
holders were received in full. Required: Prepare necessary ledger accounts to record the above
transactions.

Question 14: The following balances were extracted from ABC Limited books on 30 June 2017:
5% Redeemable Preference share capital 10 000
Ordinary share capital 30 000
Profit and loss appropriation/distributable profits 40 000
Consider the following transactions as independent and prepare ledger accounts for each of the
events.
1. Company redeems P10 000 preference shares at par and for this a new issue of P10 000
ordinary shares were made also at par.
2. Company redeems P10 000 preference shares at par but no new issue of shares were made
for this.
3. Company redeems P10 000 preference shares at par. The company issued P 3 000 ordinary
shares at par to raise cash.
4. Company redeems P10 000 preference shares at a premium of 10% .There was no fresh issue
of shares for this purpose.

Question 15:
The balance sheet of AA Limited on 31 March 2017 showed the following position:
Authorized Capital: 500 000 Ordinary shares of P2 each 1 000 000
10 000 10% Redeemable Preference shares of P5 each 50 000
Issued, called up and Paid up Capital: 300 000 Ordinary shares of P2 each fully 600 000
called up and paid up & 10 000 10% Redeemable Preference Shares of P5 each 50 000
fully called up and paid up
Share Premium 60 000
Distributable Profits 150 000
Total 860 000
Assets: Non-Current Assets 710 000
Bank 150 000
Total 860 000

On 30 April 2017, the company decided to issue 100 000 Ordinary shares to the public at a
premium of P1 per share. The payment are to be made as follows: On Application 50t per share;
On Allotment (including premium) P2 per share; First call 30t per share; Final Call 20t per share.
The company received application for 250 00 shares and the application money for 50 000 shares
were returned to the applicants. The balance shares were issued pro rata. All allotment monies
were received in full. When the first call was made, one shareholder holding 1000 shares paid
the final call money along with first call money and another holding 500 shares did not pay the
first call money. When the final call was made all shareholders paid the final call money except
the shareholder who did not pay the first call money on 500 shares also did not pay the final call
money. These 500 shares on which the first and final calls were not paid was forfeited and later
reissued to Mr. Mogotsi at P1.90 per share who paid the amount in one instalment.
On 1st July 2017, the company redeemed the 10% Redeemable Preference Shares at a premium
of 5%. No new issue of shares were made for this purpose. These preference shares were
originally issued at par. On 1st August 2017, the company decided to make a bonus issue of shares
to existing shareholders at the rate of 1 (one) fully paid Ordinary share for every 40 Ordinary
shares held by shareholders. The company utilized the share premium account balance for this
purpose.

Required: Prepare necessary ledger accounts to record the above transactions. Also show the
extract of the companys Balance sheet after all the above transactions have been completed.

Question 16: XYZ Limited has an authorized capital of 50 000 Ordinary shares of P10 each and an
issued and paid up capital of 40 000 Ordinary shares of P10 each. On 1st August 2017, the
company decided to make a bonus issue of shares to existing shareholders at the rate of 1 (one)
fully paid Ordinary share for every 8 Ordinary shares held by shareholders. The company utilized
the share premium account balance for this purpose. Records indicate that the company has a
share premium account with a balance of P60 000.
Required: Prepare necessary Ledger account to record the bonus issue of shares.

Question 17: ABC Limited has an authorised capital of 100 000 Ordinary shares of P5 each and
an issued and paid up capital of 50 000 Ordinary shares of P5 each. On 1 st August the company
decided to make a rights issue to existing shareholders. The rights issue was made as follows: 1
rights share for every 5 shares held. The rights shares were made at premium of P1 per share.
Required: Show accounting entries to record the above rights issue of shares.