Use the information below to answer the following questions:
An issue of 50 000 shares at $3 required $2.20 per share to be paid at the time of application. On allotment, another $0.30 was due and a further $0.50 when determined by the board of directors. The application money in respect of the 50 000 shares was received on 8 July. On 26 July, the shares were issued with the amount due on allotment received on 15 August. The remaining $0.50 was called up on 20 September and received on 10 October.
-What was the balance of share capital at 11 October?
A) $25 000
B) $125 000
C) $150 000
D) $110 000.

Question

Quizplus · Accepted Answer

The amount received for each share:
Application = $2.20
Allotment = $0.30
Call = $0.50

Total amount received per share = $3.00

Amount received for 50 000 shares: 
Application = 50 000 x $2.20 = $110 000
Allotment = 50 000 x $0.30 = $15 000
Call = 50 000 x $0.50 = $25 000

Total share capital = $3 x 50 000 = $150 000

Therefore, the balance of share capital at 11 October is $150 000.

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