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CS Executive · Corporate Accounting and Financial Management · Accounting for Share Capital

Asha Textiles Ltd issued 10,000 equity shares of Rs 10 each at par, payable Rs 3 on application, Rs 4 on allotment and Rs 3 on first and final call. All shares were subscribed and all money was received except allotment and final call on 500 shares held by one shareholder, Mr Rao. What is the total cash received by the company on these shares?

The company receives Rs 96,500. Total money due is Rs 1,00,000. Mr Rao paid only the Rs 3 application money on his 500 shares, so allotment and call of Rs 7 per share, amounting to Rs 3,500, remain unpaid as calls in arrears.

  1. ARs 96,500Correct
  2. BRs 95,000
  3. CRs 1,00,000
  4. DRs 98,500

Explanation

Total due is 10,000 x 10 = Rs 1,00,000. Mr Rao paid only application of Rs 3 on 500 shares. Unpaid is 500 x (4+3) = Rs 3,500. Cash received is 1,00,000 - 3,500 = Rs 96,500. Rs 95,000 wrongly leaves out his application money, and Rs 98,500 deducts only the final call on his shares.

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