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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 _______ .

Solution

✅ Correct Option: 1

Authorised capital is stated at face value. The shares are of Rs.10 face value each (Rs.12 includes Rs.2 premium, since total app + allotment + call = 4 + 4 + 4 = 12 and allotment includes premium). Authorised capital = Rs.5,00,000 / Rs.10 = 50,000 shares of Rs.10 each.

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