Case Study Information (Questions 46-50):Moonrise Co. is authorized with a Share Capital of ₹5,00,000. It issued 10,000 equity shares of ₹12 each (Face Value ₹10 + Premium ₹2).The money was payable as:₹4 on Application₹4 on Allotment (including premium of ₹2)₹4 on 1st and final callApplications were received for 12,000 shares and the directors decided to make a pro-rata allotment. Mr. Rashidi, an applicant for 120 shares, failed to pay the allotment and call money. Mr. Shantanu, a holder of 200 shares, failed to pay the call money. All these shares were forfeited. Out of the forfeited shares, 150 shares (including all of Rashidi's shares) were reissued at ₹8 per share.Question: The Balance Sheet of the company will show the authorized capital of the company as:
- A50,000 shares @ ₹10 each
- B50,000 shares @ ₹12 each
- C1,00,000 shares @ ₹12 each
- D10,000 shares of ₹10 each
Solution & Step-by-step Explanation
Authorized Share Capital is recorded at the nominal face value of the shares, separate from share premium amounts.Given Authorized Capital = ₹5,00,000.Nominal Face Value per share = ₹10.
Therefore, the authorized capital description is 50,000 shares @ ₹10 each.
Therefore, the authorized capital description is 50,000 shares @ ₹10 each.