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Accounting theory

October: At the directors’ meeting it was decided to allot shares in full to the applicants who had paid the full amount and proportionally to all the remaining applicants. According to the company’s constitution, all surplus money from application can be transferred to Allotment and Call accounts.
February 15: As provided for in the constitution, the directors decided to forfeit these “C” ordinary shares. The constitution further provided for any surplus on resale, after satisfaction of unpaid calls, accrued interest and costs, to be returned to the former shareholders. This is in line with the notice usually given by the board of directors lasting fourteen days after which the defaulting members will lose their shares through forfeiture (Leo, Hoggett, &amp. Sweeting 2012).
February 20: The Company offered ordinary shareholders 1 option (at a price of $1 per option), for every 3 shares held. Each option entitled the holder to buy 1 “D” ordinary share at a price of $1.50 per share, exercisable on 1

Accounting theory