权益会计培训指导PPT.ppt

* Summary The chapter addresses various issues associated with share capital and reserves Owners’ equity is the residual interest in the assets of an entity after deduction of its liabilities When shares are issued to the public, funds must be placed in trust prior to allotment of shares Preference shares should be disclosed as debt or equity depending on the conditions of issue Forfeiture of shares, share splits and bonus issues were also discussed * Issue of shares – Payable in full on application (Example 1) ABC issued a prospectus for the issue of 100,000 $5 shares on 1 January 2007. The prospectus specified that the $5 was payable in full on application. The company received applications for a total of 100,000 shares – these applications were received throughout the month of January. On 31 January 2007 ABC issued 100,000 shares. Share issue costs of $1,500 were incurred by ABC. Required: Prepare the journal entries to account for the issue of shares by ABC. * Issue of shares – Payable in full on application (Example 1) 1-30 January 2007 Dr Cash trust 500,000 Cr Application 500,000 To record receipt of application monies prior to issuing the shares Cash account trust is used to record cash prior to the shares being issued the cash is held in a trust account on behalf of the applicants * Issue of shares – Payable in full on application (Example 1) 31 January 2007 Dr Application 500,000 Cr Share capital 500,000 Issue of shares applied for Dr Cash 500,000 Cr Cash trust 500,000 Transfer from cash trust on issue of shares Dr Share capital 1,500 Cr Cash 1,500 To record share issue costs Share issue costs are not expensed, but offset against the proceeds of the equity issue in accordance with AASB 123 * Issue of shares – Deposit on application, balance on allotment (Example 2) ABC issued a prospectus for the issue of 100,000 $5 shares on 1 January 2007. The prospectus specified that $3 was payable on application, w