Moonrise Co. authorised with Share Capital of Rs.5,00,000 issued 10,000 equity shares of Rs.12 each.
Money was payable as
Rs.4 on Application
Rs.4 on Allotment (including premium)
Rs.4 on 1st and final call.
Applications were received for 12,000 shares and the directors decided to make pro-rata allotment. Mr. Rashidi an applicant for 120 shares, could not pay allotment and call money and Mr. Shantanu a holder of 200 shares failed to pay the call. All these shares were forfeited. Out of these forfeited shares, 150 shares (whole of Rashidi) were issued at Rs.8 per share answer following questions on the basis of above, answer from question.
The Balance Sheet of the company will show authorised capital of the company as ______ .
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → 50,000 shares @ Rs.10 each
The shares are issued at Rs. 12, but the allotment money is said to include the premium, so the price of Rs. 12 is made up of the face value of Rs. 10 and a premium of Rs. 2. Authorised capital is stated at the face value of the shares, never including any premium.
Authorised capital = Rs. 5,00,000
Face value of one share = Rs. 10
Number of shares = Rs. 5,00,000 / Rs. 10 = 50,000 shares of Rs. 10 each
Option (2) 50,000 shares @ Rs.12 each — Incorrect. 50,000 shares at Rs. 12 would be Rs. 6,00,000, and the premium is not part of share capital.
Option (3) 1,00,000 shares @ Rs.12 each — Incorrect. This would be Rs. 12,00,000, far above the authorised Rs. 5,00,000.
Option (4) 10,000 shares of 10 Rs. each — Incorrect. 10,000 shares is the issued capital, not the authorised capital.
NCERT (2026-27 edition): |