Question

Rishi Ltd. is registered with Authorized Capital of 20,00,000 divided into 2,00,000 Equity share of 10 each. Out of which 70,000 shares are offered to the public. The face value of shares is Rs.10 each but only Rs.6 called by the company. Company passed a resolution that Rs.3 will not be called except in case of winding up.
The amount of reserve Capital will be
(A) 2,10,000
(B) 6,00,000
(C) 2,80,000
(D) 4,20,000 ​

Answer 1

Answer:

It is option D .

Thank you

Answer 2

A company may reserve a portion of its uncalled capital to be called only in the event of winding up of the company. Such uncalled amount is called ‘Reserve Capital’ of the company and It is available only for the creditors on winding up of the company.  

So as per the above accounting principle the amount of reserve capital, in this case, would be the number of shares for which the amount is not called for multiplied by the value of share reserved for the event of winding up of the company which is 70,000 x 3 = 2,10,000, therefore option (A) 2,10,000 is the correct answer.