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Formation of Algebraic Expressions

X Ltd. offere...

Question

X Ltd. offered 6,00,000 equity shares of 10 each Rs 8 called up. The public applied of 5,00,000 shares, all money was duly received except from Mr. X who holds 4,000 shares has not paid any thing after application money of Rs 2 per share and from Mr. Y who hods 1000 shares has paid only Rs 6 per share. X's shares were forfeited. The amount of subscribed capital to be disclosed in the Balance Sheet is _________.

Rs 39,96,000

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Rs 39,74,000

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Rs 49,96,000

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Rs 49,74,000

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Solution

The correct option is B Rs 39,74,000
The first step is to find the call-in-arrear which is the amount that is not paid by the shareholders when called up by the company.
$C a l l s - i n - a r r e a r = A m o u n t n o t p a i d b y M r . X + A m o u n t n o t p a i d b y M r . Y$
Substitute values in the above equation
$C a l l s - i n - a r r e a r = 4000 s h a r e s \times R s 6 + 1000 s h a r e s \times R s 2 = R s 26, 000$
Subscribed capital is that part of issued capital which is formulated with deductions of the amount to be paid yet.
$S u b s c r i b e d C a p i t a l = C a p i t a l s u b s r i b e d b y p u b l i c - C a l l s i n a r r e a r$
Substitute values in the above equation
$S u b s c r i b e d C a p i t a l = R s 40, 00, 000 - R s 26, 000 = R s 39, 74, 000$
Hence, the subscribed capital to be shown in balance sheet is $R s 39, 74, 000$ .

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Similar questions

ABC Ltd, is registered with an authorised capital of Rs 50,00,000 divided into shares of Rs 10 each. It offered to the public for subscription 2,50,000 shares at a premium of Rs 4 each. Public applied for the shares and the issue was oversubscribed to the extent of 2,50,000 shares. Excess application money was to be utilised towards sum dues on allotment only. Money paid on application as Rs 2, Money paid on allotment Rs 5 and balance on first and final call. Shares were subscribed as follows:

$\begin{matrix} Category & Shares Allottled & Basis 1. & 50, 000 & Full 2. & 1, 00, 000 & 1/2 of shares applied for 3. & 1, 00, 000 & 250 % of shares applied for \end{matrix}$

Mr. Ravi who has 1,000 shares and who belonged to category 2 failed to pay call amount, his shares were immediately forfeited. Mr. Ayush who has applied for 10,000 shares and belongs to 3rd category failed to pay his arrears on call stage. Out of the forfeited shares 2,000 shares were re-issued to Ms. Pankhuri for Rs 12 each. Forfeited shares include whole of Mr. Ravi's shares. Pass necessary Journal entries.

Pass the necessary Jouranl entries.

(a) A company forfeited 200 shares of Rs 20 each, Rs 15 per share called up on which Rs 10 per share had been paid. Director reissued all the forfeited shares to B as Rs 15 per share paid up for a payment of Rs 10 each . Give Journal entries in the books of the company for forfeiture and reissue of shares.

(b) A Ltd. forfeited 100 equity shares of the face value of Rs 10 each, for the non-payment of first call of Rs 2 per share. Rs 6 per share had already been called and paid. These shares were subsequently re-issued as fully paid at the rate of Rs 7 per share. Give Journal entries in the books of the company for forfeiture and reissue of shares.

Q. VXN Ltd. invited applications for issuing

50, 000

equity shares of

R s . 10

each at a premium of

R s . 8

per share. The amount was payable as follows:
On Application

R s . 4

per share (including Rs. 2 premium).
On Allotment

R s . 6

per share (including

R s . 3

premium).
On First Call

R s . 5

per share (including

R s . 1

premium).
On Second and Final Call Balance Amount.
The issue was fully subscribed. Gopal, a shareholder holding

200

shares, did not pay the allotment money and Madhav, a holder of

400

shares, paid his entire share money along with the allotment money. Gopal's shares were immediately forfeited after allotment. Afterwards, the first call was made. Krishna, a holder of

100

shares, failed to pay the first call money and Girdhar. a holder of

300

shares, paid the second call money also along with the first call. Krishna's shares were forfeited immediately after the first call. Second and final call was made afterwards and was duly received. All the forfeited shares were reissued at

R s . 9

per share fully paid up.
Pass necessary Journal Entries for the above transactions in the books of the company.

PRACTICAL PROBLEMS

(Calculation of different types of Capital):

From the following details calculate authorised capital, issued, subscribed, called up and paid up share Capital and also calls in arrear and uncalled capital:

Pankaj Ltd. was formed with a capital of Rs 5,00,000 divided in to 5,000 shares of Rs 100 each. Of these 1,000 shares were issued to the vendor as fully paid in payment of purchase of machinery. 3,000 shares were offered to the public and of these 2,500 shares were applied and allotted. Rs 10 was payable on application and Rs 25 on allotment. The balance was yet to be called. All the money called up was duly received with the exception of allotment money on 300 shares.

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.

Bhagwati Ltd. invited applications for issuing 2,00,000 equity shares of Rs 10 each. The amount were payable as follows :

On Application --Rs 3 per share.

On allotment --Rs 5 per share.

On first and final call -- Rs 2 per share.

Application were received for 3,00,000 shares and pro-rata allotment was made to all the applicants. Money overpaid on application was adjusted towards allotment money. B, who was allotted 3,000 shares, 2,500 shares were reissued as fully paid up @ Rs 8 per share.

Pass necessary journal entries to record the above transactions in the books of Bhagwati Ltd.

(a) A company forfeited 200, shares of Rs 20 each, Rs 15 per share called up on which Rs 10 per share had been paid Directors reissued all the forfeited shares to B as Rs 15 per share paid up, for a payment of Rs 10 each . Give journal entries in the books of the company for forfeiture and re-issue of shares.

(b) A Ltd. forfeited 100 equity shares of the face value of Rs 10 each, for the non-payment of first call of Rs 2 per share. Rs 6 per share had already been called and paid. These shares were subsequently re-issued as fully paid at the rate of Rs 7 per share. Give journal entries in the books of the company for forfeiture and re-issue of shares.

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