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Question
Give one word / Term / phrase for the following statement :
Shares having first right on surplus assets at the time of liquidation.
Solution
Preference Shares
Explanation: Preference shares are given priority over equity shares regarding the distribution of dividend and repayment of capital at the time of liquidation or winding up of a company. In other words, preference shareholders have the first right (preferential) in the surplus assets or the earnings of a company over equity shareholders.
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Select the most appropriate answer from the alternatives given below and rewrite the sentence :
Nominal value of shares allotted to the public is called _____________ capital.
Select the most appropriate answer from the alternatives given below and rewrite the sentence :
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(Calculation of different types of Capital):
From the following details calculate authorised capital, issued, subscribed, called up and paid up share Capital and also calls in arrear and uncalled capital :
Pankaj Ltd. was formed with a capital of Rs 5,00,000 divided in to 5,000 shares of Rs 100 each. Of these 1,000 shares were issued to the vendor as fully paid in payment of purchase of machinery. 3,000 shares were offered to the public and of these 2,500 shares were applied and allotted. Rs 10 was payable on application and Rs 25 on allotment. The balance was yet to be called. All the money called up was duly received with the exception of allotment money on 300 shares
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Under which of the following heading at liabilities side of the company's balance sheet, the balance in 'Calls-in-Advance' account is shown?
Assertion (A): Authorised share capital is not issued to the public at once.
Reason (R): Companies do not exhaust their authorised capital in the beginning but only a part of the authorised capital is issued for public subscription. Rest of the authorised capital is raised by the company in a phased manner depending on the need for funds.
A company has:
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Reason (R): As the equity shareholders are the owners and dividend form their earning.
