a very short exam question...please help

[palock]

the owners of a company have decided to go “public” and issue an ‘IPO” They issue 30 million shares ($2.00) to gather capital of $60 million, of which the payment on application is to $0.80 per share (closes 18th April 2013), $0.50 four weeks after allocation (allocation is 13th May 2013) and the remaining amount to be paid on 30th July 2013 (the call will be made on 30th June). The IPO attracts requests for 30.4 million shares. In this case, it exceeds the allowable number of shares and the directors decide to apply the “first-come, first-served” approach and return the excess back to the unlucky applicants

Required: You are to journalise the events (including dates and notations). You should assume that all monies were received on 18th April (applications). What other option did the directors have with the excess demand, returning the excess?

 

[The Finance Writer]

The issuing company could have issued the shares on a pro rata basis instead of a "first-come, first-served" basis. In addition, the investment syndicate may have a "green shoe clause" with the issuing company, which allows issuing more shares at the offering price.

 

[Capital]

30million shares @ $2.0 = $60million
Cr. Apllication/allotment acc and
Dr. Bank acct with $24,320,000 (0.8 * 30.4 million shares) being amt recieved on apllication

Dr. Application /allotment acct and
Cr. Bank acct with $320,000 (0.8 *400,000 shares ) being amt return to unsuccessful applicant.

30th June
Dr. Call acct and
Cr. Share capital acct with $15,000,000 ($0.50 * 30million shares) being amount due on the call.
On 30th july
Dr. Bank acct and
Cr. Call acct with $15,000,000
being receipt of call money.
............................ Are u with me?