Question

Sapphire Ltd. was registered with an authorised capital of ₹ 80,00,000 divided into 4,00,000 shares of ₹ 20 each. Company offered and issued 1,50,000 shares at a premium of ₹ 4 per share payable as ₹ 7 on application (including ₹ 1 premium), ₹ 12 on allotment (including ₹ 2 premium) and balance on first call. Rancho, holding 10,000 shares failed to pay allotment and call money. Another shareholder Sultan holding 5,000 shares failed to pay the call money. All the shares held by Rancho were forfeited and of these 8,000 were reissued at ₹ 22 per share as fully paid.

Show Share Capital sub head as it would in the Balance Sheet of Sapphire Ltd. along with notes to Account as per the Companies Act 2013.

Answer 1

Balance Sheet (extract)
Particulars	Note No.	Current Year	Previous Year
EQUITY AND LIABILITIES
Shareholders’ Funds
Share Capital	1	29,52,000	-

Notes to Accounts

Note 1: Share Capital
Particulars	Amount (₹)	Amount (₹)
Authorised Share Capital (4,00,000 Equity Shares @ ₹ 20 each)		80,00,000
Issued Share Capital (1,50,000 Equity Shares @ ₹ 20 each)		30,00,000
Subscribed Share Capital
Subscribed and Fully Paid Up: (1,43,000 Equity Shares @ ₹ 20 each)		28,60,000
Subscribed but Not Fully Paid Up:
5,000 Shares @ ₹ 20 each	1,00,000	80,000
(–) Calls in Arrears	(20,000)
Add: Share Forfeiture A/c		12,000
Total Share Capital		29,52,000

Working Note:

1) Rancho (10,000 shares), All forfeited

Paid application = ₹ 7 (₹ 6 capital + ₹ 1 premium)

Premium unpaid → application premium is cancelled, so capital received = 10,000 × ₹ 6

= ₹ 60,000 forfeiture

2) Out of 10,000 forfeited shares, 8,000 are reissued @ ₹ 22

Reissue value = 22 (> face value 20) → fully paid

Forfeiture used = 8,000 × 6

= ₹ 48,000

Balance (Capital Reserve)

= 60,000 – 48,000

= ₹ 12,000

3) Subscribed Share Capital Calculation:

Total Shares issued = 1,50,000

Forfeited shares (unsubscribed now) = 10,000

Reissued = 8,000

Still not reissued = 2,000 (unsubscribed)

So fully paid shares =

1,50,000 – 10,000 + 8,000

= 1,48,000