Thompson Ltd was incorporated on 1 January 2019. A private placement of 2000 shares at $1 a share was made and the public was invited to subscribe for 20 000 shares at the same price. The public issue called for payment in the following instalments:
(a) 50 cents on application
(b) 30 cents on allotment
(c) payment of the call for the balance outstanding by 30 September 2020.
Applications were received for 18 000 shares. All money due on allotment was received by 30 May 2019.
The balance of the Share Capital of Thompson Ltd at 30 June 2019 was:

Question

Quizplus · Accepted Answer

Private placement of 2000 shares at $1 per share amounts to $2000. 
Public issue of 20000 shares at $1 per share amounts to $20000. 
Amount of money received on public issue:
(a) 50 cents on application for 18 000 shares, i.e. $9000. 
(b) 30 cents on allotment for 18 000 shares, i.e. $5400. 
(c) The call for the balance outstanding (70 cents per share) for 18 000 shares, i.e. $12600, is payable by 30 September 2020. 
Therefore, the total amount of money received from public issue was $27,000 ($9000 + $5400 + $12600). 
The total share capital of Thompson Ltd at 30 June 2019 would be $29,000 ($2000 from private placement + $27,000 from public issue). 
Since all money due on allotment was received, the balance outstanding is only the call money of $12,600, which will be received by 30 September 2020. Therefore, the balance of the share capital of Thompson Ltd at 30 June 2019 was $16,400 ($29,000 - $12,600).

Thompson Ltd Was Incorporated on 1 January 2019