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Question

Difficulty: EasyClassification of Share Capital

Apex Nigeria Limited was registered with an authorized share capital of 800,000800,000 ordinary shares of ₦1.00\text{₦}1.00 each. The directors offered 500,000500,000 shares to the public, which were fully subscribed and called up. If calls in arrears on 10,00010,000 shares at ₦0.20\text{₦}0.20 per share remain unpaid, what is the value of the company's paid-up share capital in Naira (₦\text{₦})?

Answer: 498000 ₦

Answer

The total paid-up share capital of Apex Nigeria Limited is ₦498,000.
Paid-up share capital is determined by deducting calls in arrears from called-up capital. Given a called-up capital of ₦500,000 (500,000 shares at ₦1.00) and unpaid calls of ₦2,000 (10,000 shares at ₦0.20), the resulting paid-up capital is ₦500,000 - ₦2,000 = ₦498,000.

Step-by-Step Solution

1
Calculate the total called-up share capital
Called-up capital = 500,000 shares × ₦1.00 = ₦500,000
Called-up capital represents the total nominal value of shares for which payment has been demanded from shareholders.
2
Calculate the total calls in arrears
Calls in arrears = 10,000 shares × ₦0.20 = ₦2,000
Calls in arrears represent the unpaid portion of the called-up capital.
3
Deduct calls in arrears from called-up capital to determine paid-up share capital
Paid-up capital = ₦500,000 - ₦2,000 = ₦498,000
Paid-up share capital is the actual amount of money paid by shareholders toward their called-up shares.

Key Concept

Calculation of Paid-up Share Capital from Called-up Capital and Calls in Arrears
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Topics

Classification of Share Capital

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