CIE Accounting Paper-2: Specimen Questions 75 - 76 of 103

Passage

Susan Ltd was registered on April 1st 2011 with a capital of £10000000 divided into £1000000 shares of £10 each. The company offered 44000 shares of which 40000 shares were taken up by the public. £1 was received with application. On May 2nd these shares were allotted and by 31st may £2 per share was received as allotment money. First call of £3 per share was made on 30th June, and call money was received with an exception of 100 shares. Final call was made £4 per share and call money was received by 30th September with an exception of 400 shares.

Question number: 75 (2 of 5 Based on Passage) Show Passage

Essay Question▾

Describe in Detail

Pass the required journal entries in the books of Susan Ltd

Explanation

Journal entries in the books of Susan Ltd

Table of Journal entries in the books of Susan Ltd

DATE

PARTICULARS

LF

DEBIT AMT

CREDIT AMT

1.04. 2011

Bank A/c Dr

40000

To Share Application A/c

40000

(Being application money received on 4000 shares@£1 per share)

2.05. 2011

Share application A/c Dr

40000

To Share capital A/c

40000

(Being application money adjusted)

2.05. 2011

Share allotment A/c Dr

80000

To Share capital A/c

80000

(Being allotment money due on 40000 shares@£2 per share)

31.05. 2011

Bank A/c Dr

80000

To Share allotment A/c

80000

(Being allotment money received)

30.06. 2011

Share 1st call A/c Dr

120000

To Share capital A/c

120000

(Being call money due on 40000 shares@£3 per share)

30.06. 2011

Bank A/c Dr

119700

To Share 1st call A/c

119700

(Being call money received on 39900 shares only)

30.09. 2011

Share final call A/c Dr

160000

To Share capital A/c

160000

(Being call money due on 40000 shares@£4 per share)

30.09. 2011

Bank A/c Dr

158400

To Share final call A/c

158400

(Being call money received on 39600 shares only)

Question number: 76 (3 of 5 Based on Passage) Show Passage

Essay Question▾

Describe in Detail

What does Susan Ltd mean by the term Share capital?

Explanation

In the given situation the term share capital refers to the amount which Susan Ltd wishes to raise for its business activities, through public financing. Share capital constitutes the main source of finance in large companies. Share capital is raised through the issue of shares to the public either at par, premium or discount.

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