1.

10 Company : Introduction and Issue of Shares

(a) Subscribed and Fully Paid : The shares which have been subscribed and fully called up and the entire
amount has been received by the company will be shown under this heading.
For example, on 1st January, 2017 X Ltd. had issued 7,50,000 equity shares of ~ 10 each. The issue was
fully subscribed by the public. The entire amount was called up and it was received in full before 31st March,
2017.
On 31st March, 2017 it is to be shown in the Notes to Accounts as follows :
Subscribed Capital :
(a) Subscribed and Fully Paid :
7,50,000 Equity Shares of ~ 10 each ~ 75,00,000
(b) Subscribed but not Fully Paid : The shares which have been subscribed and fully called up but some
of the shareholders could not pay the call money within the stipulated time. The amount not yet received will
be treated as calls-in-arrear. In the Notes to Account, the calls-in-arrear will be shown as a deduction from
subscribed capital.
For example, on 1st January, 2017, X Ltd. had issued 7,50,000 equity shares of ~ 10 each. The issue was
fully subscribed and called up. Mr. Ramen, holding 5,000 equity shares could not pay the final call of ~ 2 each
by 25th March, 2017, the last date for payment of final call.
On 31st March, 2017, it is to be shown in the Notes to Accounts as follows :
Subscribed Capital :
(b) Subscribed but not fully paid : ~
7,50,000 equity shares of ~ 10 each 75,00,000
Less: Calls-in-arrear 10,000
74,90,000
In this respect, it may be noted that when the company has not yet called up the entire amount of the face
value of shares subscribed, the amount received will also be shown under ‘Subscribed but not fully paid’.
For example, on 1st January, 2017, X Ltd. had issued 7,50,000 equity shares of ~ 10 each. The issue was
fully subscribed. Till 31st March, 2017, the company called up ~ 8 per share. The entire amount was received
in time.
On 31st March, 2017 it is to be shown in the Notes to Accounts as follows :
Subscribed Capital :
(b) Subscribed but not fully paid
7,50,000 equity shares of ~ 10 each, ~ 8 paid up ~ 60,00,000

Illustration 1
The authorised capital of XYZ Ltd. is ~ 20,00,000 divided into 2,00,000 equity shares of ~ 10 each. Out of these, company
issued 1,00,000 equity shares of ~ 10 each. The amount is payable as follows:
On application ~ 2; On allotment ~ 5; and On final call ~ 3.
The public applied for 90,000 equity shares and all the money was duly received.
You are required to :
(a) Show Share Capital in the Balance Sheet of the company as at 31st March, 2017; and
(b) Prepare Notes to Accounts for the same.
Solution XYZ Ltd.
Balance Sheet as at 31st March, 2017
EQUITY AND LIABILITIES Notes 31.3.2017 31.3.2016
~ ~
1. Shareholders’ Funds
(a) Share Capital (1) 9,00,000 ?
Total 9,00,000 ?
Notes to Accounts :
(1) Share Capital
Particulars 31.3.2017
~
Authorised Capital :
2,00,000 Equity Shares of ~ 10 each 20,00,000
Issued Capital :
1,00,000 Equity Shares of ~ 10 each 10,00,000