24 November 2012
A company offers 6,000 shares for subscription and public applies for 5,000 shares.
What will be the issued capital in this case; 6,000 OR 5,000.
In most books of 12th level, 6,000 has been treated as issued capital. In PC Tulsian's CPT accountancy, it says 5,000 is issued capital and explains why 6,000 cannot be the issued capital.
Please clarify this after consulting some colleagues.
24 November 2012
1.Authorized share capital /nominal share capital is the maximum amount of share capital which the company authorized to issue, It is stated in memorandum.
2.Share which are offered for public called issued capital.
3.Subscribed capital means shares that are taken up by public. Subscription maybe less.
The balance of issued capital which is not subscribed by the public called unsubscribed capital
26 November 2012
Suppose the company has authorised capital of 10,000 shares. It offers to the public 6,000 shares but the public applies for 5,000 shares. As per the above clarification the issued capital would be 6,000. Now check the following scenario: After sometine if the company >OFFERS< the remaining 5,000 shares then would the issued capital be 11,000 (6,000 offered earlier and 5,000 offered now).
From the above scenario, it seems that the issued capital would be 5,000 in the first case.
27 November 2012
"Issued capital means the capital actually issued by company."
It is the universal defination and is used by most of the authors. And from the above defination it is very clear that issued capital will be 10000 and not 11000. Pls do not get confused..........You can check the defination from any book of your choice.
29 November 2012
But in the above case if the company first offers 6,000 shares and public applies for 5,000 shares then what will be the issued capital shown in the balance sheet. Thanks
CAclubindia
