Question

c) Shiny Shine Bhd has an authorized capital of RM1,000,000 ordinary shares of RM1 each. On 30th November 2019, Shiny Shine Bhd issues a prospectus to the public to subscribe for a total of 500,000 shares at a value of RM3.50 per share payable in full upon application. On 15th December 2019, all shares are fully subscribed with the application money received on that date. The shares are then allotted to successful applicants on 31 December 2019. The costs of issuing the share is RM70,000. Required: i Prepare journal entry related to those transactions. (5 marks) ii. Prepare (extract) Statement of Financial Position of Shiny Shine Bhd as at 31" December 2019. (5 marks)

Answer 1

Answer-i- Journal Entries

Date	Account Title and Explanation	Debit	Credit
Dec.31,2019	cash (500,000*3.50)	1,750,000
	Common stock (500,000*1)		500,000
	Paid-in Capital in excess of Par Value- Common(500,000*2.50)		1,250,000
	(To recotd the issuance of shares)

Statement of Financial Position of Shiny Shine BHD

As at 31st Dec.2019

Paid-in capital:
common stock-par value, RM1; 1,000,000 shares authorised	1,000,000
Common stock—par value, 1; 500,000 shares
issued	500,000
Paid-in capital in excess of par value—common	1,250,000
Total paid-in capital	1,750,000