ACCG101 Lecture Notes - Lecture 7: Share Capital, Call Money, Retained Earnings

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scarletsquirrel639

19 Jun 2018

School

Macquarie University

Department

Accounting and Corporate Governance

Course

ACCG101

Professor

Rajni MALA

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Companies – Part II (Ch. 16)

ACCG101 – Week 7

2015 Session 1 – Stanley & Rajni

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Learning Objectives

1. account for the issue of shares (pp. 677–85)

2. account for the declaration and payment of cash dividends on

shares, share dividends and share splits (pp. 685–90)

3. account for the creation and reduction of the different types of

reserves that are included in equity (pp. 690–1)

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UNDER-/OVER-SUBSCRIPTION

•Undersubscription:

•Shares can be allotted if minimum subscription condition is met

•No accounting complications

•Oversubscription:

•Directors make all allotment decisions

•Company may keep the excess application monies and apply

them to allotment and future calls; or return monies to

unsuccessful applicants

The treatment of excess application money depends on the

company’s constitution and the terms of the prospectus.

It may be returned, or

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Document Summary

Learning objectives: account for the issue of shares (pp. 677 85: account for the declaration and payment of cash dividends on shares, share dividends and share splits (pp. 685 90: account for the creation and reduction of the different types of reserves that are included in equity (pp. The treatment of excess application money depends on the company"s constitution and the terms of the prospectus. 2. 1 excess monies retained and offset against allotment. 2. 2 excess monies retained and offset against future calls. This scenario results in the creation of a call in. Step 4: if application monies are enough to cover allotment, then no further journal entry is required. If call is partly covered by application monies, then: Example 2 - oversubscription: arnold ltd was registered on 1 january 2011, the directors issued a prospectus calling for applications for 100. The directors met the next day and decided to allot the shares on a one-for two basis.

Related Questions

Develop a three-week moving average for this time series.Compute MSE and a forecast for week 7. Round your answers to twodecimal places.

Week	TimeSeries Value	Forecast
1	18
2	15
3	16
4	13	_______
5	17	_______
6	16	_______

MSE:

The forecast for week 7:

Use = 0.2 to compute the exponential smoothing valuesfor the time series. Compute MSE and a forecast for week 7. Roundyour answers to two decimal places.

Week	TimeSeries Value	Forecast
1	18
2	15	_______
3	16	_______
4	13	_______
5	17	_______
6	16	_______

MSE:

The forecast for week 7:

Compare the three-week moving average forecast with theexponential smoothing forecast using = 0.2. Whichappears to provide the better forecast based on MSE?

Explain.

The input in the box below will not be graded, but may be reviewedand considered by your instructor.

Use trial and error to find a value of the exponential smoothingcoefficient that results in a smaller MSE than what youcalculated for a= 0.2. Find a value of for the smallestMSE. Round your answer to three decimal places.

a =

sangriapanda136

Part 3 of 8 - Part 3 The next three questions are based on thefollowing information. Sam has a cleaning service. To betterallocate his resources, he would like to forecast his weekly ordersbased on the order number he received in the past 13 weeks as shownin the following table. Week Demand Week 1 11 Week 2 14 Week 3 16Week 4 10 Week 5 15 Week 6 17 Week 7 11 Week 8 14 Week 9 17 Week 1012 Week 11 14 Week 12 16 Week 13 15 Question 1 of 3 5.0 PointsUsing a three week moving average, Sam's forecast for his Week 14order number is . (Please round to two decimal points and includeno units.) Mark for Review What's This? Question 2 of 3 5.0 PointsUsing a three week weighted moving average with weights 3, 2, and 1given to the most recent, second most recent, and third most recentweek, respectively, Sam's forecast for his Week 14 order number is. (Please round to two decimal points and include no units.) Markfor Review What's This? Question 3 of 3 5.0 Points If the MAD formoving average is 4.17 and the MAD for weighted moving average is2.38, then which forecast is more accurate? A.Moving averageB.Weighted moving average C.The same D.Not enough information toevaluate

orangefox731

Alison and Chuck Renny began operations of their furniture repair shop (Lazy Sofa Furniture, Inc.) on January 1, 2014. The annual reporting period ends December 31. The trial balance on January 1, 2015, appears below (amounts are rounded to thousands of dollars to simplify).

Account Titles	Debit		Credit
Cash	$	5
Accounts Receivable		4
Supplies		1
Equipment		6
Accumulated Depreciation			$	0
Software		12
Accumulated Amortization				5
Accounts Payable				7
Notes Payable (long-term)				0
Salaries and Wages Payable				0
Interest Payable				0
Income Tax Payable				0
Unearned Revenue				0
Common Stock				12
Retained Earnings				4
Service Revenue				0
Supplies Expense		0
Depreciation Expense		0
Salaries and Wages Expense		0
Amortization Expense		0
Interest Expense		0
Income Tax Expense		0

Totals	$	28	$	28

Transactions during 2015 (summarized in thousands of dollars) follow:
1.	Borrowed $26 cash on July 1, 2015, signing a six-month note payable.
2.	Purchased equipment for $23 cash on July 1, 2015.
3.	Issued additional shares of common stock for $6.
4.	Earned revenues for 2015 in the amount of $68, including $7 on credit and $61 received in cash.
5.	Recognized salaries and wages expenses for 2015 of $40, paid in cash.
6.	Purchased additional equipment, $2 cash.
7.	Collected accounts receivable, $9.
8.	Paid accounts payable, $12.
9.	Purchased on account supplies for future use, $8.
10.	Received a $5 cash deposit on work to start January 15, 2016.

Data for adjusting journal entries:

11.	Amortization for 2015, $5.
12.	Supplies of $6 were counted on December 31, 2015.
13.	Depreciation for 2015, $3.
14.	Accrued interest on notes payable of $1.
15.	Wages earned since the December 24 payroll not yet paid, $4.
.	16.Income tax for 2015 was $2 and will be paid in 2016. Q1 Record journal entries for transactions (1) through (10) Q2Set up T-accounts for the accounts on the trial balance. Enter beginning balances and post the transactions 1-10, adjusting entries 11-16, and closing entry Q3Post the journal entries from requirement 2 to T-accounts and prepare an unadjusted trial balance Q4Record the adjusting journal entries (11) through (16) Q5Post the adjusting entries from requirement 4 and prepare an adjusted trial balance Q6Prepare an income statement. and Prepare statement of retained earnings and Prepare balance sheet Q7Prepare the closing journal entry. Q8Post the closing entry from requirement 7 and prepare a post-closing trial balance

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ACCG101 Lecture Notes - Lecture 7: Share Capital, Call Money, Retained Earnings

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