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JAMB Principles of Accounts 2011 Question 47

Question 47

Company Accounts

If Aboki Holdings Limited issued 120,000 ordinary share of ₦2.00 each at market value of 5.50k each, the share premium would

  1. A.₦500,000
  2. B.₦450,000
  3. C.₦550,000
  4. D.₦420,000
Show the answer and explanation

Answer: D (₦420,000)

Explanation

Premium per share = 5.50 − 2.00 = ₦3.50; 120 000 × 3.50 = ₦420 000.