Day: November 13, 2020

At the beginning of the year a company has authorised share capital of 400,000 £1 ordinary shares and issued share capital of 200,000 £1 ordinary shares.

During the year the company makes a further issue of 100,000 £1 ordinary shares at a price of £2.40 each.

What is the balance on the Share Capital account at the end of the year?

Select ONE answer:

1. £300,000
2. £440,000
3. £500,000
4. £640,000

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – 200k * £1 + 100k * £1 (the difference is share premium)
2. Not correct
3. Not correct
4. Not correct

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