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Sundowner Plc Called for Subscriptions for 2 Million Shares B)
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D)

Question 49

Multiple Choice

Sundowner Plc called for subscriptions for 2 million shares.The issue price per share is £6.00 to be paid in three parts: the first payment of $3.00 is to be made on application,£2.00 is to be paid within 1 month of allotment and the remaining £1.00 is to be paid within 6 months of allotment.At the end of July,when applications close,applications for 5 million shares have been received.Two million share applicants were unsuccessful,while the remaining 3 million applicants were allotted shares on 1 August on a pro rata basis with the excess application money to be applied against the amount due on allotment.The first and final call on the shares is made on 1October.Assume all amounts on allotment and call are paid by the due date.What are the accounting entries to record these events?


A)  Summary entry for July: Dr Application 15000000Cr Share capital 15000000 August: Dr Allotment 4000000Cr Application 4000000Dr Share capital 6000000Cr Application 6000000Dr Allotment 3000000Cr Application 3000000Dr Cash at bank 15000000Cr Allotment 15000000 Summary entry for August: Dr Allotment 1000000Cr Application 1000000 Entry for1 October: Dr Call 2000000Cr Application 2000000 Summary entry for October: Dr Cash at bank 2000000Cr Call 2000000\begin{array}{l}\text { Summary entry for July: }\\\begin{array}{|l|l|l|l|}\hline \mathrm{Dr} & \text { Application } & 15000000 & \\\hline \mathrm{Cr} & \text { Share capital } & & 15000000 \\\hline & & & \\\hline {\text { August: }} & & \\\hline & & & \\\hline \mathrm{Dr} & \text { Allotment } & 4000000 & \\\hline \mathrm{Cr} & \text { Application } & & 4000000 \\\hline\\\hline \mathrm{Dr} & \text { Share capital } & 6000000 & \\\hline \mathrm{Cr} & \text { Application } & & 6000000 \\\hline & & & \\\hline \mathrm{Dr} & \text { Allotment } & 3000000 & \\\hline \mathrm{Cr} & \text { Application } & & 3000000 \\\hline\\\hline \mathrm{Dr} & \text { Cash at bank } & 15000000 & \\\hline \mathrm{Cr} & \text { Allotment } & & 15000000 \\\hline {\text { Summary entry for August: }} & & \\\hline \mathrm{Dr} & \text { Allotment } & 1000000 & \\\hline \mathrm{Cr} & \text { Application } & & 1000000 \\\hline\\\hline \text { Entry for1 October: }\\\hline \mathrm{Dr} & \text { Call } & 2000000 & \\\hline \mathrm{Cr} & \text { Application } & & 2000000 \\\hline\\\hline{\text { Summary entry for October: }} & & \\\hline \mathrm{Dr} & \text { Cash at bank } & 2000000 & \\\hline \mathrm{Cr} & \text { Call } & & 2000000 \\\hline\end{array}\end{array}
B) Sundowner Plc called for subscriptions for 2 million shares.The issue price per share is £6.00 to be paid in three parts: the first payment of $3.00 is to be made on application,£2.00 is to be paid within 1 month of allotment and the remaining £1.00 is to be paid within 6 months of allotment.At the end of July,when applications close,applications for 5 million shares have been received.Two million share applicants were unsuccessful,while the remaining 3 million applicants were allotted shares on 1 August on a pro rata basis with the excess application money to be applied against the amount due on allotment.The first and final call on the shares is made on 1October.Assume all amounts on allotment and call are paid by the due date.What are the accounting entries to record these events? A) \begin{array}{l} \text { Summary entry for July: }\\ \begin{array}{|l|l|l|l|} \hline \mathrm{Dr} & \text { Application } & 15000000 & \\ \hline \mathrm{Cr} & \text { Share capital } & & 15000000 \\ \hline & & & \\ \hline {\text { August: }} & & \\ \hline & & & \\ \hline \mathrm{Dr} & \text { Allotment } & 4000000 & \\ \hline \mathrm{Cr} & \text { Application } & & 4000000 \\ \hline\\ \hline \mathrm{Dr} & \text { Share capital } & 6000000 & \\ \hline \mathrm{Cr} & \text { Application } & & 6000000 \\ \hline & & & \\ \hline \mathrm{Dr} & \text { Allotment } & 3000000 & \\ \hline \mathrm{Cr} & \text { Application } & & 3000000 \\ \hline\\ \hline \mathrm{Dr} & \text { Cash at bank } & 15000000 & \\ \hline \mathrm{Cr} & \text { Allotment } & & 15000000 \\ \hline {\text { Summary entry for August: }} & & \\ \hline \mathrm{Dr} & \text { Allotment } & 1000000 & \\ \hline \mathrm{Cr} & \text { Application } & & 1000000 \\ \hline\\ \hline \text { Entry for1 October: }\\ \hline \mathrm{Dr} & \text { Call } & 2000000 & \\ \hline \mathrm{Cr} & \text { Application } & & 2000000 \\ \hline\\ \hline{\text { Summary entry for October: }} & & \\ \hline \mathrm{Dr} & \text { Cash at bank } & 2000000 & \\ \hline \mathrm{Cr} & \text { Call } & & 2000000 \\ \hline \end{array} \end{array} B) C) D)
C) Sundowner Plc called for subscriptions for 2 million shares.The issue price per share is £6.00 to be paid in three parts: the first payment of $3.00 is to be made on application,£2.00 is to be paid within 1 month of allotment and the remaining £1.00 is to be paid within 6 months of allotment.At the end of July,when applications close,applications for 5 million shares have been received.Two million share applicants were unsuccessful,while the remaining 3 million applicants were allotted shares on 1 August on a pro rata basis with the excess application money to be applied against the amount due on allotment.The first and final call on the shares is made on 1October.Assume all amounts on allotment and call are paid by the due date.What are the accounting entries to record these events? A) \begin{array}{l} \text { Summary entry for July: }\\ \begin{array}{|l|l|l|l|} \hline \mathrm{Dr} & \text { Application } & 15000000 & \\ \hline \mathrm{Cr} & \text { Share capital } & & 15000000 \\ \hline & & & \\ \hline {\text { August: }} & & \\ \hline & & & \\ \hline \mathrm{Dr} & \text { Allotment } & 4000000 & \\ \hline \mathrm{Cr} & \text { Application } & & 4000000 \\ \hline\\ \hline \mathrm{Dr} & \text { Share capital } & 6000000 & \\ \hline \mathrm{Cr} & \text { Application } & & 6000000 \\ \hline & & & \\ \hline \mathrm{Dr} & \text { Allotment } & 3000000 & \\ \hline \mathrm{Cr} & \text { Application } & & 3000000 \\ \hline\\ \hline \mathrm{Dr} & \text { Cash at bank } & 15000000 & \\ \hline \mathrm{Cr} & \text { Allotment } & & 15000000 \\ \hline {\text { Summary entry for August: }} & & \\ \hline \mathrm{Dr} & \text { Allotment } & 1000000 & \\ \hline \mathrm{Cr} & \text { Application } & & 1000000 \\ \hline\\ \hline \text { Entry for1 October: }\\ \hline \mathrm{Dr} & \text { Call } & 2000000 & \\ \hline \mathrm{Cr} & \text { Application } & & 2000000 \\ \hline\\ \hline{\text { Summary entry for October: }} & & \\ \hline \mathrm{Dr} & \text { Cash at bank } & 2000000 & \\ \hline \mathrm{Cr} & \text { Call } & & 2000000 \\ \hline \end{array} \end{array} B) C) D)
D) Sundowner Plc called for subscriptions for 2 million shares.The issue price per share is £6.00 to be paid in three parts: the first payment of $3.00 is to be made on application,£2.00 is to be paid within 1 month of allotment and the remaining £1.00 is to be paid within 6 months of allotment.At the end of July,when applications close,applications for 5 million shares have been received.Two million share applicants were unsuccessful,while the remaining 3 million applicants were allotted shares on 1 August on a pro rata basis with the excess application money to be applied against the amount due on allotment.The first and final call on the shares is made on 1October.Assume all amounts on allotment and call are paid by the due date.What are the accounting entries to record these events? A) \begin{array}{l} \text { Summary entry for July: }\\ \begin{array}{|l|l|l|l|} \hline \mathrm{Dr} & \text { Application } & 15000000 & \\ \hline \mathrm{Cr} & \text { Share capital } & & 15000000 \\ \hline & & & \\ \hline {\text { August: }} & & \\ \hline & & & \\ \hline \mathrm{Dr} & \text { Allotment } & 4000000 & \\ \hline \mathrm{Cr} & \text { Application } & & 4000000 \\ \hline\\ \hline \mathrm{Dr} & \text { Share capital } & 6000000 & \\ \hline \mathrm{Cr} & \text { Application } & & 6000000 \\ \hline & & & \\ \hline \mathrm{Dr} & \text { Allotment } & 3000000 & \\ \hline \mathrm{Cr} & \text { Application } & & 3000000 \\ \hline\\ \hline \mathrm{Dr} & \text { Cash at bank } & 15000000 & \\ \hline \mathrm{Cr} & \text { Allotment } & & 15000000 \\ \hline {\text { Summary entry for August: }} & & \\ \hline \mathrm{Dr} & \text { Allotment } & 1000000 & \\ \hline \mathrm{Cr} & \text { Application } & & 1000000 \\ \hline\\ \hline \text { Entry for1 October: }\\ \hline \mathrm{Dr} & \text { Call } & 2000000 & \\ \hline \mathrm{Cr} & \text { Application } & & 2000000 \\ \hline\\ \hline{\text { Summary entry for October: }} & & \\ \hline \mathrm{Dr} & \text { Cash at bank } & 2000000 & \\ \hline \mathrm{Cr} & \text { Call } & & 2000000 \\ \hline \end{array} \end{array} B) C) D)

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