Question

On 9 November 2020, Jia Ltd issued a prospectus offering 200,000 ordinary shares at an issue...

On 9 November 2020, Jia Ltd issued a prospectus offering 200,000 ordinary shares at an issue price of $10.00 each, payable $5.00 on application, $3.00 on allotment and $2.00 on a future call. Applications closed on 30 November 2020 with the company having received applications for 200,000 shares. The shares were allotted on 15 December 2020. All allotment money was received by 15 January 2021. Following the receipt of the allotment money on 15 January 2021, what would be the total amount that would have been debited to Cash at Bank (Application and Allotment) for this share issue?

Homework Answers

Answer #1

Applications moving per share= $5

Allotment moving per share = $3

Number of shares issued = 200,000

Share application money received = Applications moving per share x Number of shares issued

= 5 x 200,000

= $1,000,000

Share allotment money received = Allotment moving per share x Number of shares issued

= 3 x 200,000

= $600,000

Total amount debited to cash at bank (Application and allotment) = Share application money received+Share allotment money received

= 10,000,000+600,000

= $1,600,000

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