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Question
An extract of the Balance Sheet of Nova Ltd. shows:
| Particulars | 31.03.2023 (₹) | 31.03.2022 (₹) |
| Share Capital (Equity shares @ ₹ 10 each) | 8,00,000 | 5,00,000 |
| Securities Premium | 70,000 | 1,70,000 |
During the year 2022-23, the company raised its share capital by issuing bonus shares to the shareholders at the beginning of the year in the ratio of 1 : 5 (one bonus share was issued for every five equity shares). The balance shares were issued for cash to the public.
How many shares were issued for cash by the company?
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Solution
Number of equity shares in the beginning (31.3.2022) = `(5,00,000)/10` = 50,000 share
Number of equity shares at end (31.3.2023) = `(8,00,000)/10` = 80,000 shares
Number of shares issued during the year 2022-23 = 80,000 − 50,000 = 30,000 shares
Ratio in which bonus shares are issued = 1 : 5
Number of bonus shares issues = 50,000 × `1/5` = 10,000
Number of shares issued for cash = 30,000 − 10,000 = 20,000
