Flag Plc Has Received Applications for 4 Million Shares During

question 34

Multiple Choice

Flag Plc has received applications for 4 million shares during July 2014.The shares are to be issued at a price of £2.75 per share.The 4 million shares are allotted on 15 August 2014.What are the accounting entries required to record these events?

• A) \(\begin{array}{|l|l|l|l|}\hline&\text { Summary entry for July } 2014 \text { : }\\
• \hline \mathrm{Dr} & \text { Bank trust } & 11000000 & \\
• \hline \mathrm{Cr} & \text { Application } & & 11000000 \\
• \hline & & & \\\hline &{15 \text { August 2014: }} & & \\
• \hline \mathrm{Dr} & \text { Application } & 11000000 & \\
• \hline \mathrm{Cr} & \text { Share capital } & & 11000000 \\
• \hline
• \end{array}\)
• B) \[\begin{array}{l}
• \text { Summary entry for July 2014: }\\
• \begin{array} { | c | l | c | c | }
• \hline \mathrm { Dr } & \text { Bank trust } & 11000000 & \\
• \hline \mathrm { Cr } & \text { Application } & & 11000000 \\
• \hline & & & \\
• \hline{ \text { August 2014: } } & & \\
• \hline \mathrm { Dr } & \text { Application } & 11000000 & \\
• \hline \mathrm { Cr } & \text { Allotment reserve } & & 11000000 \\
• \hline & & & \\
• \hline \mathrm { Dr } & \text { Cash at bank } & 11000000 & \\
• \hline \mathrm { Cr } & \text { Bank trust } & & 11000000 \\
• \hline
• \end{array}
• \end{array}\]
• C) \[\begin{array}{l}
• \text { Summary entry for July 2014: }\\
• \begin{array} { | c | l | c | c | }
• \hline \mathrm { Dr } & \text { Bank trust } & 11000000 & \\
• \hline \mathrm { Cr } & \text { Application } & & 11000000 \\
• \hline & & & \\
• \hline { \text { August 2014: } } & & \\
• \hline \mathrm { Dr } & \text { Application } & 11000000 & \\
• \hline \mathrm { Cr } & \text { Share capital } & & 11000000 \\
• \hline & & & \\
• \hline \mathrm { Dr } & \text { Cash at bank } & 11000000 & \\
• \hline \mathrm { Cr } & \text { Bank trust } & & 11000000 \\
• \hline
• \end{array}
• \end{array}\]
• D) \[\begin{array}{l}
• \text { Summary entry for July 2014: }\\
• \begin{array} { | c | l | c | c | }
• \hline \mathrm { Dr } & \text { Bank trust } & 11000000 & \\
• \hline \mathrm { Cr } & \text { Allotment } & & 11000000 \\
• \hline { 15 \text { August 2014: } } & & \\
• \hline \mathrm { Dr } & \text { Allotment } & 11000000 & \\
• \hline \mathrm { Cr } & \text { Bank trust } & & 11000000 \\
• \hline
• \end{array}
• \end{array}\]

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Definitions:

Shared Meanings

A concept in communication and semiotics referring to the common understanding or interpretation of signs and symbols among members of a society or group.

Values

Fundamental beliefs or principles that guide an individual's or organization's behavior and decision-making process.

Reference Group

A social group that serves as a point of comparison for individuals in their purchase or consumption decisions.

Cultural Determinant

Factors influenced by the culture that affect the behaviors and practices of individuals or groups.