WAEC Financial Accounting 2009 Question 25

Use the following information to answer questions 24 to 26.
The authorized capital of City Entertainment Company is made up of 200,000 2½% preference shares of Le 60 each and 300,000 ordinary shares of Le 20. 80% of the ordinary shares have been issued at Le 30 each and fully paid. All the preference shares have been issued at par and fully paid. The directors decided to pay the preference dividend and recommended ordinary dividend of Le 0.10 per share.

What is the amount of the share premium?

1. A.Le 9,000,000
2. B.Le 500,000
3. C.Le 3,000,000
4. D.Le 2,400,000