Question

Illustration 1 (When Subscribed Shares are Fully Paid-up).
Strong Ltd. is registered with capital of 10,00,000 divided into 1,00,000 Equity Shares of
*10 each. It issued 75,000 Equity Shares to public for subscription. It received applications for
70,000 Equity Shares. The directors called 10 per share which was received.
How will be Share Capital shown in the Balance Sheet of Strong Ltd.?
Solution:
Strong Ltd.​

Answer 1

Answer:

in balance sheet

Share capital (Liabilities Side)

Authorised

1,00,000 Equity shares of Rs. 10 each 10,00,000

Issued

70,000 Equity shares of Rs. 10 each - 7,00,000

Cash and Cash Equivalents (Assets side)

Cast at Bank                                         7,00,000

Explanation:

I have taken an assumption that the applications received are being alloted.

while totaling Balance Sheet - Dont consider the Authorised Share Capital

As even though, issued is 75000 as public has made applications for only 70000 shares, the company receives money for 70000 shares and hence taken 70000 as issued in Share Capital