Question

Radhey Ltd. has an authorised capital of ₹ 50,00,000 divided into equity shares of ₹ 100 each. The company invited applications for issuing 45,000 shares. Applications for 44,000 shares were received, and allotment in full was made to all the applicants. All calls were made and duly received except for 500 shares, on which the final call of ₹ 20 per share was not received. The company forfeited 400 shares on which the final call was not received.

Answer the following questions:

1. The Nominal Capital of the company is:
   1. ₹ 43,50,000
   2. ₹ 44,00,000
   3. ₹ 45,00,000
   4. ₹ 50,00,000
2. The Issued Capital of the company is:
   1. ₹ 45,00,000
   2. ₹ 50,00,000
   3. ₹ 43,50,000
   4. ₹ 44,00,000
3. Subscribed and fully paid up capital of Radhey Ltd. is:
   1. ₹ 43,58,000
   2. ₹ 43,90,000
   3. ₹ 43,50,000
   4. ₹ 44,00,000
4. The amount of ‘share capital’ presented in the Balance Sheet of Radhey Ltd. will be:
   1. ₹ 43,50,000
   2. ₹ 43,90,000
   3. ₹ 43,82,000
   4. ₹ 44,00,000
5. In the ‘Notes to Accounts’, the amount disclosed under ‘Share Forfeiture Account’ will be:
   1. ₹ 50,000
   2. ₹ 40,000
   3. ₹ 8,000
   4. ₹ 32,000
6. The amount of ‘Calls in Arrears’ disclosed in ‘Notes to Accounts’ will be:
   1. ₹ 8,000
   2. ₹ 2,000
   3. ₹ 10,000
   4. ₹ 5,000

Answer 1

(i) ₹ 50,00,000

Explanation: Nominal or Authorised capital is the maximum amount specified in the Memorandum of Association.

(ii) ₹ 45,00,000

Explanation: Issued capital is the portion of authorised capital offered to the public (45,000 shares × 100 = 45,00,000).

(iii) ₹ 43,50,000

Explanation: These are shares where the full face value has been called and received.

Total Subscribed = 44,000 shares

Less: Shares with arrears (500)

Fully paid shares = 43,500 × 100

= 43,50,000

(iv) ₹ 43,82,000

Explanation:

Subscribed and fully paid = ₹ 43,50,000

Subscribed but not fully paid (100 shares) = 10,000 − 2,000 = 8,000

Add: Share Forfeiture A/c (400 shares) = 32,000

Total = 43,50,000 + 8,000 + 32,000

= 43,82,000

(v) ₹ 32,000

Explanation: Amount received on 400 forfeited shares (400 shares × 80 already paid = 32,000)

(vi) ₹ 2,000

Explanation: Final call not received on the 100 shares that were not forfeited (100 shares × 20 = 2,000)