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Question
A-one Product Ltd. is registered with authorised capital of ₹ 10,00,000 divided into 50,000 equity shares of ₹ 20 each. It issued 25,000 Equity Shares for subscription at premium of ₹ 2 per share, issue price being payable along with application. It received ₹ 5,17,000 towards application money. You are required to prepare the Balance Sheet showing Share Capital.
Ledger
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Solution
| Balance Sheet | ||
|---|---|---|
| Particulars | Note No. | ₹ |
| EQUITY AND LIABILITIES | ||
| Shareholders' Funds | ||
| Share Capital | 1 | 4,70,000 |
| Reserves and Surplus: Securities Premium | 47,000 | |
| Notes to Accounts | |
|---|---|
| Particulars | ₹ |
| Note 1: Share Capital | |
| Authorised Capital: | |
| 50,000 Equity Shares of ₹ 20 each | 10,00,000 |
| Issued Capital: | |
| 25,000 Equity Shares of ₹ 20 each | 5,00,000 |
| Subscribed and Fully Paid-up Capital: | |
| 23,500 Equity Shares of ₹ 20 each | 4,70,000 |
Working note:
Authorised Capital:
50,000 × ₹ 20 = ₹ 10,00,000
Issue price per share:
₹ 20 + ₹ 2 = ₹ 22
Application money received = ₹ 5,17,000
Therefore, number of shares subscribed:
`(5, 17,000)/22 = 23,500` shares
Subscribed and Fully Paid-up Share Capital:
23,500 × ₹ 20 = ₹ 4,70,000
Securities Premium:
23,500 × ₹ 2 = ₹ 47,000
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Notes
The textbook answer is incorrect.
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