Which of the following should be deducted from the Called-up capital to find out Paid-up capital?

Calls in arrears

The correct answer is option 1- Calls in arrears.

Calls in arrears should be deducted from the Called-up capital to find out Paid-up capital.

Paid up Capital is that portion of the called up capital which has been actually received from the shareholders. When the shareholders have paid all the call amount, the called up capital is the same to the paid up capital. If any of the shareholders has not paid amount on calls, such an amount may be called as ‘calls in arrears’. Therefore, paid up capital is equal to the called-up capital minus call in arrears.