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Question

Difficulty: MediumClassification of Share Capital

Goldline Enterprises Plc was registered with an authorized share capital of 1,500,0001,500,000 ordinary shares of ₦2.00\text{₦}2.00 each. The directors issued 900,000900,000 ordinary shares to the public, all of which were fully called up to ₦2.00\text{₦}2.00 per share. At the end of the financial year, all call payments were received except for a final call of ₦0.50\text{₦}0.50 per share on 50,00050,000 shares. What is the value of the paid-up share capital of the company in Naira?

Answer: 1775000 ₦

Answer

The paid-up share capital of Goldline Enterprises Plc is ₦1,775,000.
Paid-up share capital is the total amount of money actually paid by shareholders on the shares issued to them. It is calculated by deducting Calls in Arrears from Called-Up Capital. Here, Called-Up Capital is 900,000 shares×₦2.00=₦1,800,000900,000 \text{ shares} \times \text{₦}2.00 = \text{₦}1,800,000. Calls in Arrears equals 50,000 shares×₦0.50=₦25,00050,000 \text{ shares} \times \text{₦}0.50 = \text{₦}25,000. Subtracting ₦25,000\text{₦}25,000 from ₦1,800,000\text{₦}1,800,000 yields ₦1,775,000\text{₦}1,775,000.

Step-by-Step Solution

1
Calculate Total Called-Up Capital
₦1,800,000
Called-up capital equals the total number of issued shares multiplied by the called-up amount per share (900,000 shares × ₦2.00).
2
Calculate Calls in Arrears
₦25,000
Calls in arrears represent the unpaid portion of called-up capital (50,000 shares × ₦0.50).
3
Deduct Calls in Arrears from Called-Up Capital
₦1,775,000
Paid-up capital is determined by subtracting Calls in Arrears from Called-Up Capital (₦1,800,000 - ₦25,000).

Key Concept

Paid-up Share Capital Calculation
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Topics

Classification of Share Capital

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