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Question
International Trade Ltd. has authorised share capital of ₹ 1,00,00,000 divided into 1,00,000 Equity Shares of ₹ 100 each. It has existing issued and paid-up capital of ₹ 25,00,000. It further issued to public 25,000 Equity Shares at a premium of 20% for subscription payable as under:
| On Application | ₹ 30 |
| On Allotment | ₹ 60, and |
| On Call | Balance Amount |
The issue was fully subscribed and allotment was made to all the applicants. The company did not make the call during the year.
Show Share Capital in the Balance Sheet of the company.
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Solution
| Balance Sheet Extract | |
|---|---|
| Particulars | ₹ |
| SHAREHOLDERS' FUNDS | |
| Share Capital | 42,50,000 |
Working note:
Face value per share: ₹ 100
Premium: 20% of ₹ 100 = ₹ 20 per share
Amount payable:
On Application: ₹ 30 per share
On Allotment: ₹ 60 per share, including premium of ₹ 20
On Call: Balance = ₹ 30 per share
Since the call was not made, called-up share capital on the new issue is:
₹ 30 + (₹ 60 − ₹ 20) = ₹ 70 per share
For 25,000 shares:
25,000 × ₹ 70 = ₹ 17,50,000
Existing issued and paid-up capital:
₹ 25,00,000
Therefore:
₹ 25,00,000 + ₹ 17,50,000 = ₹ 42,50,000
