Smith Ltd Was Registered as a Company on 1 July

Smith Ltd was registered as a company on 1 July 2017. On 4 July 2017, Smith Ltd issued a prospectus offering 300 000 ordinary shares at an issue price of $4.00 each, payable $2.00 on application and $2.00 on allotment. Applications closed on 1 August 2017 with the company having received applications for 330 000 shares. The shares were allotted on 15 August 2017, with the over-subscription amount being refunded to unsuccessful applicants. All allotment money was received by 31 August 2017. Following the allotment, the amount transferred from the cash trust account to the cash account would be:

A) $600 000.
B) $1 320 000.
C) $1 200 000.
D) $660 000.

Correct Answer:

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