222

$show=home

Welcome to Accounting Education

The Free Online University with 3400+ Accounting contents as study material which can watch, read and learn anyone, anywhere.

Start your studies

Latest Contents$type=three$count=6$author=hide$comment=hide$label=hide$s=hide$show=home$date=hide

$show=home

Why Accounting Education Important


Free
Simple
Have Quality Study Material
Taught by Expert

Connect Vinod Kumar (Educator)

Why Accounting Education Volunteer


Free training
It's educational
It's fun
It helps others

Become Volunteer Teacher

$hide=page

Divisions of Share Capital of Company

It is true that no business can operate without fund and fund can be received only by capital or loan . If company or corporate wants to get capital , it should make some division for this purpose. After this shares can be issued first time to public . For company accountant , its knowledge is must .



We can explain main divisions of share capital of company with following way :-



1st - Registered or authorised or nominal capital



That part of total capital with whom company wants to register , that part is called authorised capital . This the maximum amount that can any company issue to public for getting capital fund . Still there is not quantity limit for authorised capital determination under Indian Company Act 1956 .



2nd Issued Capital



It is that part of authorised capital which is offered to public to acquire , that part is called issued capital .



3rd Subscribed Capital



It is that part of issued capital which is accepted by public. Subscribed capital can not more than issued capital . If it happen than it will be over subscription and it will be rejected or accepted under pro-rata basis for providing proper accounting treatment .



4th Called up Capital



It is that part of issued capital which is to be paid by shareholders . Company has demanded money of this part . If shareholder does not pay called up capital , then this part becomes call in arrears .



5th Paid Up capital



It is that part of called up capital which is paid by shareholders and after this they can become real owner of company.



6th Reserve capital



One company can determine with special resolution that some part of total subscribed capital will not demanded from shareholder and it is not demand up to the winding up of company . That part of capital is called reserve capital . It can not be changed in general capital with the permission of Court . Board of directors also can not change it in normal capital . It is most benefited for company's creditors . because , this amount can be utilized for payment to creditors at the time of liquidation of company.

There is no need to do any accounting treatment for reserve capital but a small note is written in balance sheet in which company mentions the amount of reserve capital and other interested parties can focus on this note .



For instance



A company has Rs. 20000000 as its authorised capital divide into 1000000 equity shares of Rs. 10 each and 200000 pref. shares of Rs. 50 each. Company issued 800000 equity shares and 100000 preference shares . The public subscribed for 600000 equity shares and 100000 pref. shares . All shareholders paid the amount with the exceptionof 50000 equity shares @ Rs. 5 per share . Calculate the amount of various types of share capital .



Authorised capital



1000000 equity shares of Rs. 10 each → Rs. 10000000

200000 pref. shares of Rs. 50 each → Rs. 10000000
___________________________________________
---------------------------------------> Rs. 20000000
___________________________________________

Issued Capital

800000 Equity shares of Rs. 10 each → Rs. 8000000
100000 pref. share of Rs. 50 each → Rs. 5000000
__________________________________________
----------------------------------------> Rs. 13000000
__________________________________________

Subscribed capital

600000 equity shares of Rs . 10 each → Rs. 6000000
100000 pref. share of Rs. 50 each → Rs. 5000000
___________________________________________
---------------------------------------> Rs. 11000000
___________________________________________

Called up capital

600000 equity shares of Rs. 10 each
Called up only Rs. 8 per share → Rs 4800000
100000 pref. shares called up @ Rs. 40 each → Rs. 4000000
____________________________________________
------------------------------------------------> Rs. 8800000
____________________________________________

Paid up capital

Called up equity capital less calls in arears
of Rs. 5 each --------------------------------→ Rs. 4550000
paid up capital of pref. shares ---------------→ Rs. 4000000
_____________________________________________
----------------------------------------------> Rs. 8550000
_____________________________________________

COMMENTS

: 2
  1. Dear Sir, what is the book entry we need to pass for the above example.
    If you can email these entry at my email address mvshah54@yahoo.com, will be highly appriciated.

    ReplyDelete
In comment, you can give your feedback, reviews, ideas for improving content or ask question relating to written content.


Name

access,2,account,87,accountant,92,Accounting,679,accounting definitions,99,accounting ebook,3,Accounting education,85,accounting procedure,2,accounting process outsourcing,2,Accounting Software,54,advance,3,advertising,6,africa,7,Amalgamation,6,amendments,16,announcements,61,Annuity,2,assets,51,audit,46,auditing,41,Australia,2,B.Com.,22,balance sheet,80,bank,111,Bank reconciliation,12,banking,33,basic accounting,110,BBA,1,benefits,13,best,50,bill,12,black money,3,blog,12,bloggers,7,book keeping,4,bookkeeping,2,Branch Accounting - full tutorial,8,budget,35,Budget variance,13,business,65,businessman,9,CA,29,calculator,4,canada,3,capital,72,capital budgeting,27,career,20,cash,40,cash book,8,cash flow statement,8,Chiense,1,children,13,china,6,class,3,coaching,2,coins,2,college,6,commerce,10,commerce students,7,company,36,computer,9,computer accounting,1,conference,4,Contact vinod kumar,1,Control Your Spending,27,corporate accounting,69,cost,159,cost accounting,194,cost center,8,cost centre,1,CPA,2,credit,18,credit card,10,cs,10,currency,35,data,11,Debit and credit,16,debit cards,1,debt,62,debtor,21,degree,6,depletion,2,depreciation,38,Diwali Messages,12,documents,4,dollar,5,domain,3,Downloads,3,Dubai,1,e-accounting,17,earning,17,education,246,Education Loans,6,email,15,employee,4,EPF,2,ERP,7,euromoney,1,examination,7,excel,17,excise duty,6,expenses,65,facebook,7,factor of loan,1,fans,2,feature,32,fifo,5,FII,4,fiji,1,finacle,1,finance,822,Finance Journal Entries,4,Financial,134,financial accounting,144,fire insurance,3,flickr,2,flow,4,forensic,4,forex,21,formula,8,france,1,fraud,6,free,2,fun,34,function,1,fund,48,GAAP,36,GDP,1,gdr,5,germany,1,gold,7,goodwill,4,goodwill accounting,3,google,34,google apps,3,google apps,1,google base,1,google buzz,1,google calendar,1,Google docs,38,google finance,3,google fusion tables,1,google talk,5,govt.,5,GST,33,guide,85,health,6,Hindi,2,Hindi Language,3,history,3,holding company,3,How to treat FBT in Tally 9,1,HRA,3,ICAI,11,ICAWI,3,ICICI Bank,1,IFRS,10,income,17,income statement,16,Income Tax,7,India,57,indian railway,1,Indonesia,1,inflation,4,inflation accounting,3,infographics,8,information,7,inspiration,175,insurance,14,insurance accounting,2,Intangible,3,interest,26,international,7,Internet,41,Introduction of Tally 9,1,inventory,41,investment,135,investment in Shares,6,invoice,3,IT,1,Japan,1,Job costing,4,journal entries,136,Journal Entries eBook Help,4,Kalculate,1,keyboard,3,kuwait,2,laptop,2,law,4,LBT,1,learning,36,lease,5,lecture,11,ledger,15,leducation,1,Leverage Analysis,7,liabilities,16,lifo,3,linkedin,1,loan,74,logical point,1,loss,5,loss of profit,1,M.Com.,5,m.phil,2,malaysia,3,management accounting,129,manual accounting,4,manufacturing account,1,market,11,marketing,3,mastercard,2,material,13,MBA,14,MCA,1,media,4,migration,2,mobile,9,money,61,ms word,3,ms. excel,14,multi currency in tally 9,1,Multicurrency Accounting,3,mutual fund,30,national security,1,new and sacrifice ratio,1,new york times,1,new zealand,1,news,1,NGO,5,nonprofit-accounting,6,North Georgia Mountains,1,Notification,1,NPV,17,NSE,1,odbc,2,office,10,oman,1,online application,2,online accounting,11,Online Accounting Course,4,otcei,1,pakistan,3,parents,3,Partnership,1,pay pal,3,pdf,4,Personal Finance,6,pie chart,1,pie chart of income,2,pnb,5,podcast,1,ppf,1,presentation,10,price,7,privacy policy,2,prof. vinod kumar,13,profit,24,profit and loss account,12,project management,11,provision,13,purchase,9,puzzles,2,quickbooks,2,Quote,22,quotes,42,quotes of svtuition,1,rating agency,2,ratio analysis,34,RBI,7,readers,13,real estate,13,rectification of errors,11,remote control,2,reports,10,reserves,8,responsibility accounting,4,retirement,2,revenue,3,Revenue reserves,2,review,7,risk,11,rupees,9,salary,5,sale,12,saudi arabia,1,saving,19,sbi,9,scholarship,2,school,1,SEBI,13,security,30,service tax,23,share,20,share trading,15,Shares,16,shri lanka,3,singapore,2,sms,6,social accounting,7,society,5,solution,214,South Africa,1,stock,24,stock exchange,22,structure,6,student,39,students,69,study,21,subsidiary company,2,svtuition,13,swiss bank,2,tally,99,tally 9,8,Tally 7.2,8,Tally 9,42,Tally.ERP 9,59,tanzania,2,tax,94,Tax Accounting,30,TDS,15,teacher,62,teaching,112,technology,33,test,40,testimonial,15,testimonials,15,thailand,1,tips,60,trading,5,trading on equity,2,transaction,7,trend,12,trial balance,13,truthfulness,1,tuition,3,twitter,10,UAE,5,UGC - NET Commerce,13,UK,11,United Arab Emirates,1,university,9,usa,25,valuation,8,VAT,22,Video,35,Voucher and vouching,4,Wealth,8,wikipedia,25,working capital,29,youtube,14,
ltr
item
Accounting Education: Divisions of Share Capital of Company
Divisions of Share Capital of Company
Accounting Education
http://www.svtuition.org/2009/07/divisions-of-share-capital-of-company.html
http://www.svtuition.org/
http://www.svtuition.org/
http://www.svtuition.org/2009/07/divisions-of-share-capital-of-company.html
true
2410664366776677676
UTF-8
Loaded All Posts Not found any posts VIEW ALL Reply Cancel reply Delete By Home PAGES Contents View All RELATED CONTENTS FOR YOUR LEARNING Topic ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS PREMIUM CONTENT IS LOCKED STEP 1: Share to a social network STEP 2: Click the link on your social network Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy