Q.Dinkar Ltd. has an authorised capital of ₹50,00,000 divided into equity shares of ₹100 each. The company invited applications for 40,000 shares, applications for 36,000 shares were received. All calls were made and duly received except for 500 shares on which the final call of ₹20 was not received. The company forfeited 200 shares on which final call was not received. Show how share capital will appear in the balance sheet of the company. Also prepare 'Notes to Accounts' for the same.
Share Capital shows as one line (₹35,90,000) on the face of the Balance Sheet under Shareholders' Funds; the Notes to Accounts carry the full ladder — authorised ₹50,00,000, issued ₹40,00,000, subscribed-and-fully-paid ₹35,50,000, subscribed-but-not-fully-paid ₹24,000 (₹30,000 called up less ₹6,000 calls-in-arrears), plus the Share Forfeiture Account ₹16,000.
Concept
Under Schedule III of the Companies Act, 2013 a company reports Share Capital as a single figure on the face of the Balance Sheet and reserves the detailed classification for the Notes to Accounts. Calls-in-arrears are deducted from the called-up amount of the shares still held; the Share Forfeiture Account (the amount already received on the forfeited shares) is added back, because that money stays with the company.
Working Note — Share Counts
- Subscribed shares = 36,000; of these 200 are forfeited, leaving 35,800 held.
- Final call of ₹20 was unpaid on 500 shares; 200 of those were forfeited, so 300 shares remain subscribed-but-not-fully-paid.
- Fully paid shares = 35,800 − 300 = 35,500.
- Share Forfeiture Account = 200 forfeited shares × ₹80 already paid (₹100 − ₹20 unpaid final call) = ₹16,000.
Solution — Balance Sheet (Extract)
| Particulars | Note No. | Amount (₹) |
|---|---|---|
| I. Equity and Liabilities | ||
| 1. Shareholders' funds | ||
| (a) Share capital | 1 | 35,90,000 |
Notes to Accounts
| Particulars | Amount (₹) | Amount (₹) |
|---|---|---|
| 1. Share capital | ||
| Authorised share capital | ||
| 50,000 equity shares of ₹100 each | 50,00,000 | |
| Issued capital | ||
| 40,000 equity shares of ₹100 each | 40,00,000 | |
| Subscribed and fully paid up capital | ||
| 35,500 equity shares of ₹100 each fully paid | 35,50,000 | |
| Subscribed but not fully paid-up capital | ||
| 300 equity shares of ₹100 each fully called up | 30,000 | |
| Less: Calls-in-arrears (300 × ₹20) | (6,000) | 24,000 |
| Add: Share forfeiture A/c (200 shares × ₹80) | 16,000 | 40,000 |
| 35,90,000 |
Share Capital is disclosed as ₹35,90,000 on the face of the Balance Sheet, with the authorised, issued and subscribed break-up (and the ₹16,000 Share Forfeiture Account) shown in Note 1.
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