Reference no: EM132666310

Port Ltd was involved in the following transactions during 1 July 2019 to 30 June 2020 financial period. On 5 September 2019, the directors of the company decided to issue a prospectus calling for applications for 400,000 ordinary shares at an issue price of $3.2, payable $1.3 on application and $1.9 on allotment.

By the closing date of 31 October 2019, the company had received the following application money:

From applicants for 600,000 shares $780,000

From applicants for 100,000 shares $320,000

• On 15 November, the company allot shares to applicants who paid full price for the number of shares applied for, and to applicants who paid only the application money the remaining shares.
• The company allot shares to applicants who paid application money based on pro rata basis. They received 1 share for every 2 shares they applied for on 30 November.
• The constitution gives the directors the power to apply excess application money to allotment. All other allotment money was received by 15 December 2019.
• On 30 December, the excess amounts paid on application were refunded to applicants after the allotment.
• The funds raised were transferred to the company's business account.
• The company declared $560,000 final dividends on 23 August 2020.

Required:

Problem 1: Provide journal entries to record the above transactions for 2019/2020 financial year. (Narrations are required)

Problem 2: Show related disclosures in the Statement of Financial Position at the end of 2019/2020 financial year.