La Sfera Co. was formed on July 1, 2014. The company reportedthe following summarized...

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Accounting

La Sfera Co. was formed on July 1, 2014. The company reportedthe following summarized statement of financial position at July 1,2017:
RM
Assets
Cash
472,000
Other assets
1,680,000
Total assets
2,152,000
Liabilities and Equity
Liabilities
Other liabilities
546,000
Ordinary dividend payable
35,000
Shareholders’ equity
7% preference shares, 300,000 authorised, 50,000 issued
250,000
Ordinary share, 500,000 authorised, 250,000 issued
750,000
Retained earnings
571,000
Total liabilities and equity
2,152,000
The following transactions occurred during the financial yearbut have not been recorded:
July 1, 2016
Paid dividends payable to shareholders.
Aug 15, 2016
Issued 50,000 ordinary shares to the public for RM5 per share.The company incurred RM4, 000 on the costs of issuance ofshares.
Nov 23, 2016
Offered right issue to existing shareholders, with the right topurchase one shares for every 80 shares held. Market price on thedate was RM5. All offers were taken up.
Feb 1, 2017
Obtained a 6-month loan amounting RM 25,000 from JuneBank at 4%per year to expand the business.
Mar 7, 2017
Declared and distributed one-for-fifty share dividend toshareholders on record. Market value per share was RM6. The companyused its retained earnings for the purpose of giving bonusshare.
May 18, 2017
Declared cash dividend to ordinary shareholders of RM0.20 pershare, subject to approval at the forthcoming annual generalmeeting.
June 1, 2017
Issued 10% three-year bonds payable with a RM150, 000 par valueat the price of RM133, 540. The current market interest rate is12%.
June 30, 2017
Payment of cash dividend to ordinary shareholders has beenapproved. The money will be credited to ordinary shareholders inJuly 15, 2018.
Paid preference dividend.
Required:
Journalise the above transactions.
Prepare the statement of financial position as at December 31,2017.

Answer & Explanation Solved by verified expert

4.2 Ratings (656 Votes)

PArt 1

Date	Particulars	Debit (RM)	Credit (RM)
1-Jul	Dividend Payable	35000.00
	Cash		35000.00
	(dividend payable paid)

15-Aug	Cash	250000.00
	Share Capital		150000.00
	Premium on Share Capital		100000.00
	(share capital issued at premium with $3 per share par value)

15-Aug	Share Issue Expenses	4000.00
	Cash		4000.00
	(share issue expenses)

23-Nov	Cash	18750.00
	Share Capital		11250.00
	Premium on Share Capital		7500.00
	(right share issued)

1-Feb	Cash	25000.00
	Loan		25000.00
	(loan received recorded)

7-Mar	Retained Earning	36450.00
	Common Stock Dividend Payable		18225.00
	Premium on Share Capital		18225.00
	(stock dividend issued with share value deemed to be RM 3)

18-May	Retained Earnings	60750.00
	Dividend Payable		60750.00
	(dividend declared recorded)

1-Jun	Cash	133540.00
	10% Bonds Payable		133540.00
	(bonds payable issue recorded)

15-Jul	Dividend Payable	60750.00
	Cash		60750.00

PART 2

Particulars	Amount
Assets	RM
Cash	799,540
Other assets	1,680,000
Total assets	2,479,540

Liabilities and Equity
Liabilities
Other liabilities	571,000
10% Bonds Payable	133,540

Shareholders’ equity
7% preference shares, 300,000 authorised, 50,000 issued	250,000
Ordinary share, 500,000 authorised, 250,000 issued	929,475
Share Premium	125725
Retained earnings	469,800
Total liabilities and equity	2,479,540

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In: AccountingLa Sfera Co. was formed on July 1, 2014. The company reportedthe following summarized statement...La Sfera Co. was formed on July 1, 2014. The company reportedthe following summarized statement of financial position at July 1,2017:RMAssetsCash472,000Other assets1,680,000Total assets2,152,000Liabilities and EquityLiabilitiesOther liabilities546,000Ordinary dividend payable35,000Shareholders’ equity7% preference shares, 300,000 authorised, 50,000 issued250,000Ordinary share, 500,000 authorised, 250,000 issued750,000Retained earnings571,000Total liabilities and equity2,152,000The following transactions occurred during the financial yearbut have not been recorded:July 1, 2016Paid dividends payable to shareholders.Aug 15, 2016Issued 50,000 ordinary shares to the public for RM5 per share.The company incurred RM4, 000 on the costs of issuance ofshares.Nov 23, 2016Offered right issue to existing shareholders, with the right topurchase one shares for every 80 shares held. Market price on thedate was RM5. All offers were taken up.Feb 1, 2017Obtained a 6-month loan amounting RM 25,000 from JuneBank at 4%per year to expand the business.Mar 7, 2017Declared and distributed one-for-fifty share dividend toshareholders on record. Market value per share was RM6. The companyused its retained earnings for the purpose of giving bonusshare.May 18, 2017Declared cash dividend to ordinary shareholders of RM0.20 pershare, subject to approval at the forthcoming annual generalmeeting.June 1, 2017Issued 10% three-year bonds payable with a RM150, 000 par valueat the price of RM133, 540. The current market interest rate is12%.June 30, 2017Payment of cash dividend to ordinary shareholders has beenapproved. The money will be credited to ordinary shareholders inJuly 15, 2018.Paid preference dividend.Required:Journalise the above transactions.Prepare the statement of financial position as at December 31,2017.

	RM
Assets
Cash	472,000
Other assets	1,680,000
Total assets	2,152,000

Liabilities and Equity
Liabilities
Other liabilities	546,000
Ordinary dividend payable	35,000

Shareholders’ equity
7% preference shares, 300,000 authorised, 50,000 issued	250,000
Ordinary share, 500,000 authorised, 250,000 issued	750,000
Retained earnings	571,000
Total liabilities and equity	2,152,000

July 1, 2016	Paid dividends payable to shareholders.
Aug 15, 2016	Issued 50,000 ordinary shares to the public for RM5 per share.The company incurred RM4, 000 on the costs of issuance ofshares.
Nov 23, 2016	Offered right issue to existing shareholders, with the right topurchase one shares for every 80 shares held. Market price on thedate was RM5. All offers were taken up.
Feb 1, 2017	Obtained a 6-month loan amounting RM 25,000 from JuneBank at 4%per year to expand the business.
Mar 7, 2017	Declared and distributed one-for-fifty share dividend toshareholders on record. Market value per share was RM6. The companyused its retained earnings for the purpose of giving bonusshare.
May 18, 2017	Declared cash dividend to ordinary shareholders of RM0.20 pershare, subject to approval at the forthcoming annual generalmeeting.
June 1, 2017	Issued 10% three-year bonds payable with a RM150, 000 par valueat the price of RM133, 540. The current market interest rate is12%.
June 30, 2017	Payment of cash dividend to ordinary shareholders has beenapproved. The money will be credited to ordinary shareholders inJuly 15, 2018.
June 30, 2017	Paid preference dividend.