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JAMB Principles of Accounts 2007 Question 13

Question 13

Company Accounts

A company's authorized share capital was one million ordinary shares at ₦1 each. It issued 80% of its shares at ₦1.10 per share. 70k was payable on application, 25k on allotment, 10k due on first call and the balance on second call.
What would be the total amount received on second call?

  1. A.₦240 000
  2. B.₦280 000
  3. C.₦40 000
  4. D.₦56 000.
Show the answer and explanation

Answer: C (₦40 000)

Explanation

Shares issued = 80% × 1 000 000 = 800 000. Second call = 110k − (70k + 25k + 10k) = 5k. 800 000 × ₦0.05 = ₦40 000.