Ambrosia Ltd was incorporated on 1 January 2014. A private placement of 5000 shares at $1 a share was made and the public was invited to subscribe for 45 000 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 2016.
Applications were received for 35 000 shares. All money due on allotment was received by 30 May 2014.
The balance of the Share Capital of Ambrosia Ltd at 30 June 2014 was:

Question

Quizplus · Accepted Answer

Number of shares privately placed = 5000
Number of shares offered to public = 45000
Total number of shares issued = 5000 + 45000 = 50000

Amount due on application = 40% of $1 = $0.4 per share
Amount due on allotment = 30% of $1 = $0.3 per share
Amount due on call = $0.3 per share

Applications received = 35,000 shares
Amount received on application = $0.4 x 35,000 = $14,000

Amount due on allotment = $0.3 x 35,000 = $10,500
Amount received on allotment = $10,500

Total amount received = $14,000 + $10,500 = $24,500

Amount due on call = $0.3 x 50,000 = $15,000
Amount received on call = $0 (since payment is due by 30 Sept 2016)

Therefore, the balance of the Share Capital of Ambrosia Ltd at 30 June 2014 = Total amount received - Amount due on call = $24,500 - $15,000 = $9,500
(Note: The question does not specify whether the shares were fully subscribed, so we assume that only 35,000 shares were allocated and issued.)

Ambrosia Ltd Was Incorporated on 1 January 2014