Assignment 02 AFE 3 691 Question 1 ( 32 Marks ) The following information was taken from the accounting records of Lilian Led . and is presented to...
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Assignment 02AFE 3 691Question 1 ( 32 Marks )The following information was taken from the accounting records of Lilian Led . and is presentedto you :`Authorized share capital :`800 000 ordinary shares of NS 1 each500 000 preference shares of no par value ( fixed annual dividend of 15 0 per share )Balances on 01 October 20 . 9NSOrdinary share capital360 000 . 00Preference share capital75 000. 00Redeemable preference share capital400 000 . 00Share premium288,000 . 00Retained earnings95 000. 00Revaluation reserve42 000 . 00Asset replacement reserve20 000 . 00Land810 000 . 00The shares were issued as follows :"On 30 November 20. 8 , 360 000 ordinary shares were issued as NS 1 , 80 each and 200 000redeemable preference shares were issued at NS 2 , 00 each . The redemption date has beenestablished on the date the shares were issued . The preference shares were issued during*January 20 . 7 at a price of NS 1 , 50 per share .Additional information :"a ) It was decided to convert the parvalue shares on 01 October 20 . 9 to be in line with the*companies incorporated under the Companies Act 71 of 2008 .b ) On Q1 July 20 . 10 , 150 000 ordinary shares were offered to the public at NS 2 , 00 eachand 200 000 preference shares at NS 2 , 80 each . On the closing date of the applicationson 31 July 20 . 10 , applications for 160 000 ordinary shares and 180 000 preference*shares were received . The maximum amount of shares was allotted and theunsuccessful applicants were refunded ."C ) The following were provisional income tax payments , during the year , for the yearended 30 September 20. 10First paymentNS 75 , 000 . 00Page 13 of 18Second payment*NE 40, 040. 00!) The profit before tax for the year Ending 30 September 20.10 amounts to 15. 700 ,``0.00. Provision ne ed's to be made for income tax at a rate of 24* for companies .Assume that the accounting profit before tax was the same as taxable income .E / 125 DDD redeemable preference shares were redeemed on 30 September 20. 10 at N15 2,DO. DO Each . This was partly Financed by Issuing To odd preference shares on 30
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