Use the following information for questions given ahead:
B Ltd. was registered with a share capital of $R s . 2, 00, 00, 000$ divided into equity shares of $R s . 10$ each. It issued $R s . 1, 80, 00, 000$ equity shares to the general public at par payable as to $R s . 3$ on application, $R s . 3$ on allotment and balance in $2$ equal calls. The public had subscribed for $17, 00, 000$ shares. Till $31 s t$ March, $2006$ , only first call had been made. All the shareholders had paid up except Mr. C, a holder of $50, 000$ shares, who did not pay the call money.
B Ltd.'s Issued Capital will be ____________.

R s . 2, 00, 00, 000

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R s . 1, 80, 00, 000

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R s . 1, 70, 00, 000

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R s . 1, 36, 00, 000

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Solution

The correct option is A $R s . 1, 80, 00, 000$
Issued capital can be taken as the part of the authorized capital, which is actually offered to the public for subscription. The number of issued stock is a sub-group of the total authorized or registered shares. Issued capital is the quantity of stock which the BOD (Board of Directors) or stockholders have decided to assign. Generally, a company does not issue the entire authorized shares at a time so that the issued capital is always less than the authorized capital.
Issued capital does not get affect by subscribed or paid up capital and hence, in the given question B Ltd.'s Issued capital is Rs. 1,80,00,000.

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PRACTICAL PROBLEMS

(Forfeiture of shares issued at par)

Vijay Ltd. issued Rs 40,000 Equity shares of Rs 10 each payable as follows.

On Application	:	Rs 2	On Allotment	:	Rs 3
On First Call	:	Rs 3	On Second Call	:	Rs 2

The company received applications for Rs 50,000 equity shares. Allotment for shares was made on pro rata basis. Share allotment and calls were made and as also received except Raja holding Rs 1,000 shares failed to pay both the calls. His shares were forfeited after second call.

Record the above transactions in books of Vijay Ltd.

Note: Excess money received on share application 10,000 × Rs 2 = 20,000 will be diverted to share allotment A/c.

Pawan Ltd. was registered with an authorised Capital of Rs 5,00,000 divided into shares of Rs 10 each. It purchased a Building from Y for Rs 2,00,000 and issued fully paid shares to Y for purchases consideration.It invited applications for the balance 30,000 shares payable as under:---- Rs 3 per share on Application; Rs 3 per share on Allotment; Rs 2 per share First Call; and Rs 2 on Final Call.

Ashok, who had been allotted 500 shares failed to pay both the Calls. His shares were forfeited and re-issued at Rs 9 per share to Hari, as fully paid up. Make neccessary entries in the Journal of the Company.

Dogra Ltd. had an authorised capital of 1,00,00,000 divided into equity shares of Rs 100 each. The company offered 84,000 shares to the public at premium. The amount was payable as follows:

On Application Rs 30 per shares.

On Allotment Rs 40 per share (including premium).

On First and Final Call Rs 50 per share.

Applications were received for 80,000 shares. All sums were duly received except the following : Lakhan, a holder of 200 shares did not pay allotment and call money. Paras, a holder of 400 shares did not pay call money.

The company forfeited the shares of Lakhan and Paras. Subsequently, the forfeited shares were re-issued for Rs 80 per share fully paid up. Show the entries for the transaction in the Cash Book and Journal of the company.

Kaya Fab. Ltd. issued 1,00,000 equity shares of Rs 10 each payable as Rs 2 on application, Rs 4 on allotment and Rs 2 each on first and final call. Applications were received for 1,50,000 shares. Applicants of 50,000 shares were sent letters of regret and application money was refunded.

Madhur, a holder of 3,000 shares failed to pay allotment money which he paid along with the first call. Rohan, a shareholder holds 700 shares paid both the calls along with allotment. Sohan, a holder of 1,000 shares did not pay the first call and the final call. His shares were forfeited. The forfeited shares were re-issued at Rs 11 per shares as fully paid up.

Pass necessary Journal entries for the above transactions in the Books of the Company.

Spencer Paints Ltd. was registered with an authorised capital of Rs. 50,00,000 divided in 5,00,000 equity shares of Rs.10 each. Company issued 20,00,000 equity shares at a premium of Rs.3 per share, payable as follows: Rs 4 on Application, Rs 5 on Allotment (including premium), Rs 2 on First Call and Rs 2 on second and Final Call.

All shares were subscribed and all the money was duly received. Share issue expenses amounted to Rs 75,000 which were fully written off against securities premium.

Prepare necessary Journal Entries and Bank Account.

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