Semaphore Ltd Called for Subscriptions for 15 Million Shares

question 55

Multiple Choice

Semaphore Ltd called for subscriptions for 15 million shares. The issue price per share is $2.50 to be paid in two parts: the first payment of $1.00 is to be made on application and the remaining $1.50 is to be paid within 1 month of allotment. At the end of September, when applications close, applications for 19 million shares have been received. The shares are allotted on 1 October on a pro rata basis with the excess application money to be applied against the amount due on allotment. All amounts on allotment are paid by the due date. What are the accounting entries to record these events?

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Definitions:

Competitive Price-searcher

A market scenario where sellers actively seek out buyers by setting prices independently to capture consumer demand.

Raise Price

The act of increasing the cost at which a good or service is sold, which can affect demand, revenue, and profit margins.

Lose Sales

The phenomenon of experiencing a reduction in the number of units sold or in total revenue.

Competitive Price-searcher

A market condition where businesses actively seek to determine the optimal pricing of their goods or services relative to their competitors to gain market share.