Reference no: EM132576877

On 1 July 2019, Contiki Ltd. was registered as a public company. On 4 July 2019, a prospectus was issued inviting applications for 40 000 shares payable $2 on application, $2 on allotment and $1 on a call to be made 3 months after the date of allotment.

By 31 July, applications were received for 50 000 shares. On 3rd of August, the directors decided to reject and refund the application of 2,000 shares and allotted 40 000 shares to the applicants on a pro-rata basis. The remaining surplus was offset against the amount payable on allotment. The balance of allotment money was received by 12th of August. Share issue costs of $1 250 were paid on 31st of August.

Question 1: A call was made on 3rd of November to be paid on 15 November, but the holders of 2 400 shares did not pay the call. On 30th of November these shares were forfeited. On 4th of December, these shares were reissued as fully paid for a share value of $3 per share.