Question

The amount of share capital to be shown under the heading ‘Shareholder’s Funds’ will be:

• A. 49,90,000
• B. 49,50,000
• C. 50,00,000
• D. 65,00,000

Hint:

When calculating share capital under "Shareholder’s Funds", subtract all call-in-arrears (unpaid calls) from the total called-up capital. Forfeiture does not reduce the nominal value, only the paid-up portion.

Answer 1

The Correct Option is B

Step 1: Total number of shares issued = 5,00,000 
Face value per share = 10 \(\quad \Rightarrow \quad\) Total face value = \(5,00,000 \times 10 = 50,00,000\)
Step 2: Bhola did not pay Second & Final Call on 5,000 shares: 
Unpaid portion = 2 per share 
Amount unpaid = \(5,000 \times 2 = 10,000\)
Step 3: Since these shares were forfeited, the amount unpaid is not included in Share Capital. So actual capital received = \[ 50,00,000 - 10,000 = 49,90,000 \] BUT, the key accounting treatment for Share Capital (under Shareholder’s Funds) includes: 
- Called-up Capital minus Calls in Arrears \( \text{Called-up Capital} = 5,00,000 \times 10 = 50,00,000\) 
\(\text{Calls in Arrears} = 5,000 \times 1 (First Call) + 2 (Second Call) = 15,000\)
\(\Rightarrow\) Net Share Capital = 50,00,000 – 50,000 = 49,50,000 
Note: Since Bhola did not pay First and Second & Final Call ( 3 + 2), the total unpaid = 5 × 5,000 = 25,000, and hence, \[ \text{Share Capital} = 50,00,000 – 50,000 = 49,50,000 \]