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Question - Adelaide Briton Ltd was registered on the first of July 2020. The company's directors issue a disclosure document inviting applicants for 2 000 000 ordinary shares for an issue price of $1. The share is payable 60c on application and 20c on allotment. Adelaide Briton Ltd reserves the right to allot to individual applicants on a pro rata base, a lesser number of shares than the number applied for, and may apply excess application monies to the allotment and to calls in advance. The company's director must allot exactly 2 000 000 shares.
First Scenario: Applications for 2 200 000 shares are received with the correct application money.
Second Scenario: Applications for 2 750 000 shares are received with the correct application money.
Required - For each of the above scenarios:
1. Calculate the amount of application money that would be applied to application and calls (including allotment).
2. Prepare journal entries.
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