Show effect of transactions in statement financial position

Assignment Help Financial Accounting

Reference no: EM132812295

Question - Miracles Berhad has authorized capital of RM20,000,000 that consists of RM14,000,000 ordinary shares and RM6,000,000 7% preference shares.

As at 1 January 2020, the following balances were extracted from the company's books:

Issued and paid-up capital: RM

2,000,000 ordinary shares 4,000,000

1,500,000 7% preference shares 4,500,000

During the financial year ended 31 December 2020 the company has made the following transactions with regards to the issuance of its shares:

1 February 2020:

The company issued 1,000,000 ordinary shares at an issue price of RM3.90 and 500,000 7% preference shares at RM3.50. All the transactions are payable in full upon application.

1,580,000 applications of ordinary shares and 800,000 applications of 7% preference shares were received and any excess applications were refunded.

15 July 2017:

The company made a rights issue of 2 for every 100 ordinary shares held by existing shareholders as at 1 January 2020 at the price of RM2.80. The market price at this date was RM3.50 per share.

Required -

a. Jounalize the above transactions.

b. Show the effect of the above transactions in the Statement of Financial Position (extract) as at 31 December 2020.

Reference no: EM132812295

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