Consider the given statements below related to issue of shares and select the correct statements:
(A) The profit on the reissue of forfeited shares is not transferred to the General Reserve.
(B) Paid up capital is that portion of the called up capital which has actually been received from the shareholders.
(C) Shares can be forfeited for failure to repay the loan to the bank.
(D) Calls in Arrears are shown on the Assets side of the balance sheet.
Choose a pair of correct statements from the given options below.
Consider the given statements below related to issue of shares and select the correct statements:
(A) The profit on the reissue of forfeited shares is not transferred to the General Reserve.
(B) Paid up capital is that portion of the called up capital which has actually been received from the shareholders.
(C) Shares can be forfeited for failure to repay the loan to the bank.
(D) Calls in Arrears are shown on the Assets side of the balance sheet.
Choose a pair of correct statements from the given options below.
Solution
Profit on reissue is a capital profit and goes to Capital Reserve, not General Reserve, so (A) is correct. Paid up capital is the part of called up capital actually received, so (B) is correct. Shares can be forfeited only for non-payment of allotment or calls on those shares, not for a bank loan default, so (C) is wrong. Calls in Arrears are deducted from Subscribed Capital in the Notes, not shown as an asset, so (D) is wrong.
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