Exam 13: Share Capital and Reserves

A company's capital consists of 100 000 ordinary shares issued at $2 and paid to $1 per share. On 1 September, a first call of 50c was made on the ordinary shares. By 30 September, the call money received amounted to $45 000. No further payments were received, and on 31 October, the shares on which calls were outstanding were forfeited. On 15 November, the forfeited shares were reissued as paid to $1.50 for a payment of $1 per share. The appropriate cash amount from the reissue was received on 19 November. Costs of reissue amounted to $1 800. The company's constitution provided for any surplus on resale, after satisfaction of unpaid calls, accrued interest and costs, to be returned to the shareholders whose shares were forfeited. The entry to record the reissue of forfeited shares is:

AASB 101 Presentation of Financial Statements requires which of the following items to appear on the face of the statement of changes in equity? I. Profit or loss for the period II. The net amount of cash from the issue of any securities during the period III. The cumulative effect of changes in accounting policy and the correction of errors IV. Each item of income or expenses that are required to be recognised directly in equity

When a public share issue is made, the offer comes from:

Accounting for share buy-backs is prescribed by:

In respect to a company's issue of shares, an IPO is an:

The balance in the retained earnings account is affected by: I. Issued share capital II. Dividends paid or provided for III. Transfers to or from other reserve accounts IV. Changes in accounting policies and errors

Which of the following statements relating to an asset revaluation surplus account is correct?

The appropriate journal entry to recognise the accounting treatment for share issue costs is:

A company's capital consists of 100 000 ordinary shares issued at $2 and paid to $1 per share. On 1 September, a first call of 50c was made on the ordinary shares. By 30 September, the call money received amounted to $45 000. No further payments were received, and on 31 October, the shares on which calls were outstanding were forfeited. On 15 November, the forfeited shares were reissued as paid to $1.50 for a payment of $1 per share. The appropriate cash amount from the reissue was received on 19 November. Costs of reissue amounted to $2 500. The company's constitution provided for any surplus on resale, after satisfaction of unpaid calls, accrued interest and costs, to be returned to the shareholders whose shares were forfeited. The entry to record the forfeiture of shares is:

How does a bonus issue of shares impact the equity of a company?

The following items appear in the statement of changes in equity except for:

Regulations for share buy-backs are primarily designed to protect the interests of a company's:

Which account represents excess proceeds received and retained by a company from an oversubscription to a share offer application?

Gains and losses on available-for-sale financial assets are recognised directly in equity until the financial asset is derecognised. Upon derecognition, the cumulative gain or loss previously recognised is:

A company's capital consists of 100 000 ordinary shares issued at $2 and paid to $1 per share. On 1 September, a first call of 50c was made on the ordinary shares. By 30 September, the call money received amounted to $45 000. No further payments were received, and on 31 October, the shares on which calls were outstanding were forfeited. On 15 November, the forfeited shares were reissued as paid to $1.50 for a payment of $1 per share. The appropriate cash amount from the reissue was received on 19 November. Costs of reissue amounted to $1 800. The company's constitution provided for any surplus on resale, after satisfaction of unpaid calls, accrued interest and costs, to be returned to the shareholders whose shares were forfeited. The amount of the surplus payable to the shareholders whose shares were forfeited is:

Contact Ltd was registered as a corporation on 1 July 2021. On 3 July 2021, Contact Ltd issued a prospectus offering 50 000 ordinary shares at an issue price of $5.00 each, payable $3.00 on application and $2.00 on allotment. Application closed on 1 August 2021 with the company having received applications for 60 000 shares. The shares were allotted on 15 August 2021, with the over-subscription amount being refunded to unsuccessful applicants. All allotment monies were received by 31 August 2021. Following the allotment, the balance in the Share Capital account would be:

Which of the following is responsible for deciding whether a dividend is paid by a company?

Which of the following is not a reason that companies may undertake a share buy-back?

A company issued share option is an instrument that gives the holder the right, but not the obligation, to:

AASB 101 requires that a reconciliation between the carrying amount of each class of contributed equity capital and each reserve at the beginning and end of each period be disclosed in: