Company Accounts

Share Capital

Easy

Comprehension:

Read the following passage carefully and answer the questions.

X ltd. issued 30,000 shares to the public having Face value ₹ 100 at 10% premium. Money is receivable as follows:

Application = ₹ 40 (including premium)

Allotment = ₹ 45

First and Final call = Remaining amount

The public applied for 50,000 shares. The company rejected application for 10,000 shares and made a pro rata allotment to the rest of the applicants. A shareholder applying for 400 shares, didn’t pay the allotment and call money and his allotted shares were forfeited by the company. Later, the forfeited shares were reissued at ₹ 80 each as fully paid.

What type of subscription took place?

Full subscription

Under subscription

Over subscription

Partial Subscription

✅ Correct Option: 3

The company offered 30,000 shares to the public.

The public applied for 50,000 shares.

Since the number of shares applied for (50,000) is greater than the number of shares offered (30,000), this is a case of over subscription.

Over subscription occurs when the demand for shares exceeds the supply. In such cases, the company typically:

Rejects some applications (as done here for 10,000 shares)
Makes pro-rata allotment to remaining applicants (as done for the remaining 40,000 applications against 30,000 shares available)

The excess demand (50,000 - 30,000 = 20,000 shares) clearly indicates over subscription.

2026: 11 May Shift 1

As 'Calls in Advance' is a liability of the company, it is under obligation, if provided by the Articles, to pay interest on that amount from the date of its receipt up to the date when the appropriate call is due for payment. According to "Table F", interest on calls in advance cannot exceed __________.

2025: 4 June Shift 2

Profit on reissue of forfeited shares should be treated as:

2026: 24 May Shift 1

Table F of the Companies Act provides for the payment of interest on calls in advance at a rate not exceeding

2023: 29 May Shift 2

Select the amount that is received from Hari's reissued shares -

2026: 13 May Shift 1

Which of the following given statements are true ?

(A) Share Capital is not shown under Equity & Liabilities in the Balance Sheet.

(B) Forfeited shares cannot be re-issued at a discount.

(D) Capital reserve account has a credit balance.

Choose the correct answer from the options given below:

2026: 13 May Shift 1

Consider the given steps below related to forfeiture of shares due to non receipt of allotment money and their re-issue and arrange them in correct sequence :-

(A) Reissue of forfeited shares and transfer of gain on reissue of forfeited shares.

(B) Notice to shareholder regarding non-payment of allotment money and call money.

(D) Forfeiture of shares for non-payment of allotment and call money.

Choose the correct sequence of the above steps from the options given below:

What type of subscription took place?

Solution

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