XYZ Ltd was incorporated on 1 January 2011.A private placement of 5000 shares at $1 a share was made and the public was invited to subscribe for 95 000 shares at the same price.The public issue called for payment in the following instalments:
A.40 cents on application
B.30 cents on allotment
C.payment of the call for the balance outstanding by 30 September 2013.
Applications were received for 90 000 shares.All money due on allotment was received by 30 May 2011.
The balance of the Share Capital of XYZ Ltd at 30 June 2011 was:

Question

Quizplus · Accepted Answer

Number of shares issued to public = 95,000 - 5,000 (private placement) = 90,000
Amount received on application = 90,000 × $0.40 = $36,000
Amount received on allotment = 90,000 × $0.30 = $27,000
Total share capital at 30 June 2011 = (5,000 + 90,000) × $1 = $95,000
Out of this, $63,000 (i.e., $36,000 + $27,000) has been received up to 30 June 2011. Therefore, the balance outstanding at 30 June 2011 is $32,000 (i.e., $95,000 - $63,000). Hence, the answer is B) $68,000.

XYZ Ltd Was Incorporated on 1 January 2011