Hari, the holder of 1200 shares paid the amount due on first call @ Rs 2/- per share along with second and final call which became due after 1 month from the due date of first call. What interest will be charged from Hari on calls in arrears:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Rs 20
When the articles say nothing about interest on calls in arrears, Table F applies, which allows interest of up to 10% p.a. on the unpaid amount for the period from the due date to the date of actual payment.
Amount in arrears = 1,200 shares × Rs 2 = Rs 2,400
Period of delay = 1 month (the first call was paid together with the second call, one month after it fell due)
Interest = Rs 2,400 × 10% × 1/12 = Rs 20
Interest is charged only on the call that was paid late; the second and final call was paid on its own due date, so nothing is charged on it.
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