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Practice Question

Imo State University Nigeria

DPC PLC has an authorised share capital of 600,000 ordinary shares value at 50 kobo each and

300,000 9% preference shares valued at N1 each. The company issued 500,000 ordinary shares and

300,000 preference shares to the public on the following terms:

Ordinary shares: 15 kobo per share payable on application, on allotment 25 kobo per share including

the premium. On 1

call 20 kobo per share, the first and final call was due on 1

October, 2012.

The preference share is issued payable on the following terms: On application 50 kobo per share, on

allotment of 20 kobo per share, on first call 25 kobo per share and on second and final call10 kobo

per share. There is a premium included in the application fee.

Application were received for 600,000 ordinary shares and 250,000 preference shares on 20

July,

2012. The shares were allotted on 20

August 2012, on which date, excess application on the

ordinary shares were returned to the unsuccessful applicants.

All instalments were received on due dates except those on 10,000 ordinary shares, whose holder

failed to pay for the first and final call.

You are required to:

Prepare the ledger accounts recording the above transactions in the books of DPC PLC. Extract a

Balance Sheet as at 30/10/2012 on the assumption that no other transactions took place until that

date.

(Accounting)

Solution

Workings on DPC PLC

Working 1

N. K

Face value .50

Application money per shares . 15k

Allotment . 25k

First call . 20k

Premium 10k

Working 2

Preference share

N. K

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Face value 1.00

Application on shares .50k

Allotment shares .20k

First call .25k

Second & final call 10k

.95

Premium .05

Bank Account

Dr Cr

Date

Particular

Application

Returned

20july

2012

For ord.

600,000

shares 15k

90,000

Ord shares

100,000shares

at 15k

15,000

For

preference

250,000

125,000

20 Aug

2012

Allotment

For ord.

500,000

shares at

25k

125,000

For Pref.

250,000 at

20k

50,000

First call

For ord.

500,000

shares at

20k

N100,000

less

10,000 at

20k =

N2000

98,000

For Pref.

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Practice Question Imo State University Nigeria DPC PLC has an authorised share capital of 600,000 ordinary shares value at 50 kobo each and 300,000 9% preference shares valued at N1 each. The company issued 500,000 ordinary shares and 300,000 preference shares to the public on the following terms: Ordinary shares: 15 kobo per share payable on application, on allotment 25 kobo per share including the premium. On 1st call 20 kobo per share, the first and final call was due on 1st October, 2012. The preference share is issued payable on the following terms: On application 50 kobo per share, on allotment of 20 kobo per share, on first call 25 kobo per share and on second and final call10 kobo per share. There is a premium included in the application fee. Application were received for 600,000 ordinary shares and 250,000 preference shares on 20th July, 2012. The shares were allotted on 20th August 2012, on which date, excess application on the ordinary shares were returned to the unsuccessful applicants. All instalments were received on due dates except those on 10,000 ordinary shares, whose holder failed to pay for the first and final call. You are required to: Prepare the ledger accounts recording the above transactions in the books of DPC PLC. Extract a Balance Sheet as at 30/10/2012 on the assumption that no other transactions took place until that date. (Accounting) Solution Workings on DPC PLC Working 1 N. K Face value .50 Application money per shares . 15k Allotment . ...
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