Question

W 200
TO
27. X Ltd. was formed with a capital of 10,00,000 divided into shares of 100 each. It offered
90% shares to public for subscription. The amount per share was payable as 40% on application, 20%
on allotment and the balance on first and final call. The applicants paid 3,60,000 on application and
1,69,000 on allotment. The call has not yet been made. Calculate:
(a Authorised Capital, (b) Issued Capital, (c) Subscribed Capital, (d) Called-up Capital, (e) Paid-up Capital
and (f) Calls-in-Arrears.​

Answer 1

Answer:

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Answer 2

Concept

The maximum amount of shares that a business is legally permitted to issue to its shareholders is known as authorized capital.

The amount that the shareholders have actually contributed to the company is known as paid-up capital.

Called-up capital is the outstanding share capital that stockholders owe but have not paid.

Calls-in-arrears refers to the portion of called-up capital that the shareholder does not pay within a certain period of time. In other words, a shareholder is said to be in arrears when they don't pay the amount due on their initial call or any following calls.

The portion of issued capital that has received public subscriptions is known as subscribed capital.

Given

10,00,000 divided into shares of 100 each.

Offered 90% shares to public for subscription.

The amount per share was payable as 40% on application, 20% on allotment and the balance on first and final call. The applicants paid 3,60,000 on application and 1,69,000 on allotment. The call has not yet been made.

Find

(a Authorized Capital, (b) Issued Capital, (c) Subscribed Capital, (d) Called-up Capital, (e) Paid-up Capital and (f) Calls-in-Arrears.​

Solution

10,00,000 shares @ 10 each

Authorized capital = 10,00,000

Issued Capital = 10,00,000*90% = 9,00,000

Subscribed Capital = 9,00,000 (applications have been received for subscription)

Called up capital = 9,00,000*60% = 5,40,000 (Call has not been made yet)

Paid up capital = 3,60,000+1,69,000 = 5,29,000

Calls in arrears = 5,40,000 - 5,29,000 = 11,000.

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