| PL Ltd. was registered with an authorised capital of ₹ 10,00,000 divided into 1,00,000 equity shares of ₹ 10 each. The company offered to the public for subscription 90,000 equity shares. Applications were received for 82,000 equity shares, and shares were allotted to all the applicants. All money due was received, with the exception of the first and final call money of ₹ 2 per share on ₹ 2,000 shares allotted to Atishay. His shares were forfeited. |
Answer the following questions:
i. The amount of ‘Calls in Arrears’ disclosed in ‘Notes to Accounts’ will be nil.
Explanation:
Calls in arrears refer to the amount not received on called-up shares that have not been forfeited by the company. In the given question, Atishay’s shares were forfeited; therefore, there will be no calls in arrears.
ii. The number of shares of PL Ltd. after forfeiture will be 80,000.
Explanation:
Shares applied for and allotted = 82,000
shares forfeited = 2,000
Number of shares after forfeiture = 82,000 – 2,000
= 80,000
iii. In the ‘Notes to Accounts’, the amount disclosed under ‘Share Forfeiture Account’ will be ₹ 16,000.
Explanation:
Number of shares forfeited = 2,000
Amount paid by Atishay per share = ₹ 10 – ₹ 2
= ₹ 8
Total amount in share forfeiture account = 2,000 × 8
= ₹ 16,000
iv. In the ‘Notes to Accounts’, the amount disclosed under ‘Issued Capital’ will be ₹ 9,00,000.
Explanation:
Issued capital is the part of authorised capital that a company makes available to the public for purchase.
Number of shares offered to the public = 90,000
Issued capital = 90,000 × 10
= ₹ 9,00,000
v. Balance in ‘Share Forfeiture Account’ will be shown in ‘Notes to Accounts’ in the balance sheet of Pb Ltd. under Subscribed Capital.
Explanation:
The balance in the Share Forfeiture Account is transferred to the subscribed capital.
The share capital shown in a company’s balance sheet represents the subscribed capital.
