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Trial balance Dr Cr
Issued share capital
100,000 ordinary shares 120,000– the “issued share capital” has no Dr or Cr balance
– and whats with the 100,000 ordinary shares, then it wrote 120,000 on credit?i have never seen this kind of question, usually its always “issued share capital without the 100,000”. So how much is my “issued share capital” in the “equity’ on balance sheet now?
sry, the post kinda messed up. The 120,000 is actually on Cr side AND issued share capital has no Dr or Cr
Share capital is always a credit balance on the trial balance.
The fact that there are 100,000 shares means that the nominal/par value must be $1.20 per share.
to be honest, im still kinda confused about this share capital topic. Take the question i wrote above for example. Does that mean that:
That company issues 100,000 ordinary shares to public at $1.20 per share. Then 100,000 ordinary shares are bought by the public and the buyer become the company shareholder, AND the company received $120,000 from those “new shareholder”. Thus this $120,000 is consider the capital/equity of the company. Is my understanding for this correct?
Another question, when a company issues 100,000 ordinary shares at $1.20, WHAT exactly is the “100,000” ordinary shares? It doesn’t have a $ symbol which indicates it is not a money value. Then what is it? Is it a physical items like 100,000 units of contract paper?
Sorry im so confused…
The 100,000 is the number of shares in the company. If someone were to buy (say) 10,000 of the shares then it means they own 10% of the company.
$1.20 is the price paid for each share. So the company received $120,000 in total and this is the share capital.
This is all explained in my free lectures. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
thanks, i got it now. Btw where can i access your lectures?
My lecturer is so bad and i got so confused
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