Advertisements
Advertisements
Question
Partha Ltd. issued ₹ 1,00,000 shares of ₹ 10 each payable with applications. It received ₹ 8,00,000 Application Money.
Under which Main head and Sub-head it will be shown in the Balance Sheet and why?
Short Answer
Advertisements
Solution
Show ₹ 8,00,000 under the Main Head “Current Liabilities” Sub‑head “Other Current Liabilities” (labelled as Share Application Money).
Reason: The amount received on application is refundable because the minimum subscription was not received (so it cannot be treated as equity until allotment/minimum subscription conditions are satisfied).
shaalaa.com
Is there an error in this question or solution?
