Assessment Task:
KG Ltd Journal Entries Finance Assessment Answer

Question 1

KG Ltd issued a prospectus on 1 July 2019 to the public offering 5 million shares at $3.00 each. The prospectus specified that $1.60 per share is payable on application and a further $1.00 will be payable on allotment.

The closing date for applications was 31 August 2019.

By the closing date, applications have been received for 7 million shares. To deal with the oversubscription, the directors of KG Ltd decided to issue shares to all subscribers on a pro-rata basis. Excess money received on application will be credited against the amounts due on allotment. All amounts due on allotment are paid by the due date of 15 September 2019.

On 30 November 2019, KG Ltd made the call for the outstanding balance of $0.40 per share with the amounts being payable by 31 December 2019.

Holders of 300 000 shares fail to pay the amount due of the call by the due date. On 15 January 2020 the directors forfeited the shares. The forfeited shares were cancelled and reissued on 15 February 2020 as fully paid to $ 3.00 on payment of $2.50 per share. The reissue of the forfeited shares cost $6 000. The balance in the forfeited shares account were refunded to the forfeited shareholders by 28 February 2020.

REQUIRED

Prepare general journal entries to record the above transactions. Show all workings.

 

Question 2

Required:

a)    Calculate the amount of each of Spencer Ltd’s temporary differences at 30 June 2018, and state whether it is deductible or taxable.   
b)    Determine the balance of the deferred tax liability and deferred tax asset as at 30 June 2018 and provide the journal entry.   
c)    Calculate Spencer Ltd’s taxable income for the year ended 30 June 2019 and provide the journal entry.
d)    Calculate the deferred tax for the year ended 30 June 2019 and provide the journal entry.

 

Question 3

Required

A. Prepare the acquisition analysis and BCVR entries of Ethan Ltd at 1 July 2017, immediately after the acquisition.    
B. Prepare the consolidation worksheet entries at 30 June 2018.    

C. Complete the consolidation worksheet at 30 June 2018. 

 

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  • Uploaded By : Mitchell Lee
  • Posted on : November 29th, 2018

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