Examkin

Question

Difficulty: MediumReserves and Capital Structure

Kano Logistics Plc has an authorized capital of 5,000,0005,000,000 ordinary shares of ₦0.50\text{₦}0.50 each. The company issued 3,000,0003,000,000 ordinary shares, with ₦0.40\text{₦}0.40 per share called up by the directors. If the total calls in arrears amount to ₦50,000\text{₦}50,000, what is the value of the paid-up share capital in Naira?

Answer: 1150000 ₦

Answer

The paid-up share capital is ₦1,150,000.
To determine paid-up capital, first calculate called-up capital by multiplying the issued shares (3,000,000) by the called-up price per share (₦0.40), giving ₦1,200,000. Then subtract calls in arrears (₦50,000), which represents unpaid amounts requested from shareholders. This gives a final paid-up share capital of ₦1,150,000.

Step-by-Step Solution

1
Calculate the total called-up share capital
₦1,200,000
Called-up capital is determined by multiplying the number of issued shares (3,000,000) by the called-up amount per share (₦0.40).
2
Deduct calls in arrears from called-up capital to find paid-up capital
₦1,150,000
Paid-up capital represents the actual amount received by the company from shareholders, calculated as called-up capital minus calls in arrears (₦1,200,000 - ₦50,000).

Key Concept

Paid-Up Share Capital Calculation
Rate this question

Topics

Reserves and Capital Structure

More questions from this topic