A company advertised and issued N750,000, 12% preference ...
A company advertised and issued N750,000, 12% preference shares of N1 each to be issued at N1.50 per share. Applications for N1,370,000 were received at 30k per share. 70k per share (including premium) was due om allotment while 25k per share was due on each of the remaining two calls. All amounts due were received . Application money for 120,000 shares was refunded to unsuccessful applicants were allotment shares on pro-rata basis.
The share premium account would be?
Credited with application and allotment N187,500
Debited with appllication and allotment N375,000
Credited with application and allotment N375,000
Debited with application and allotment N187, 500
Correct answer is C
Premium shares = Issue price per share – Face value/par value per share x No of shares.
Issue price = N1.50
Face value = N1
No. of shares = 750,000
1.50 - 1 = 0.50
0.50 x 750,000 = 375,000
Share Application or share allotment or Share capital A/c all are personal accounts as they represent money from the shareholders and when money is due, these are to be debited because of the rule "Debit the receiver".
The principle of double entry bookkeeping states that ...
Where closing stock is undervalued, the effect is? ...
"A business unit is assumed to operate into foreseeable future and earn reasonable net income&q...
Unpresented cheques are cheques_________ ...
Which of the following does not lead to depreciation assets? ...
Which of the following is the basis for apportioning rent among departments? ...
Set-off is carried out in the control account when ...
When the debit side total of an account, it means that the account has ...