Reference no: EM132892267

Movements in reserves and retained earnings

Sunshine Ltd undertook the following transactions during the financial year ended 30 June 2019.

(a) transferred $68? 000 from the general reserve to retained earnings (b)paid an interim dividend of $60? 000

(c) transferred $104? 000 from the asset revaluation surplus to the general reserve subsequent to the sale of an item of plant that was measured using the revaluation model

(d) used the general reserve to fund the payment of 480? 000 bonus shares, these being issued at $2 per share.

Required
Prepare the journal entries in relation to these events.

Issues of shares and options

White Foam Ltd has been investigating the expansion of the company into new areas of devel- opment. In order to fund these new investments the company needs an increase in equity. On

1 April 2019 the company decided to make a public issue to raise development. The company issued a prospectus inviting applications for new capital shares, on application. There was an additional incentive offered by White Foam Ltd to investors, as those shareholders who acquired more than 20? 000 shares were allowed to ac- quire options at 50 cents each. These options allowed the investors to acquire shares in White Foam Ltd at each, the acquisition having to occur before 30 November 2019.

White Foam Ltd had received applications for On 28 May the shares and options were allotted and money returned to cants. All applicants who acquired options also received shares.

by 10 May.

By 30 November 2019 the price of each of White Foam's shares was $3.35. Holders of options exercised their options in November, with the remaining options lapsing.

Required
Prepare the journal entries in the records of White Foam Ltd in relation to the above events.