Equity Share Issue Details

Oct 13, 2025 by magicalceylontours.com 3 views

Introduction

In this article, we will discuss the equity share issue of Hema Company Ltd, which involves the issuance of 60,000 equity shares of ₹100 each at a premium of ₹10 per share. We will also calculate the share capital of the company based on the amount payable by the shareholders.

Equity Share Issue Details

Number of shares issued: 60,000
Face value of each share: ₹100
Premium per share: ₹10
Total premium: ₹60,000 (60,000 x ₹10)
Total face value: ₹6,000,000 (60,000 x ₹100)

Amount Payable by Shareholders

The amount payable by the shareholders is as follows:

On application: ₹20 per share
On allotment: ₹50 per share (including premium)
On first and final call: ₹40 per share

Total Amount Payable

The total amount payable by the shareholders is the sum of the amounts payable on application, allotment, and first and final call.

Total amount payable on application: ₹20 x 60,000 = ₹1,200,000
Total amount payable on allotment: ₹50 x 60,000 = ₹3,000,000
Total amount payable on first and final call: ₹40 x 60,000 = ₹2,400,000
Total amount payable: ₹1,200,000 + ₹3,000,000 + ₹2,400,000 = ₹6,600,000

Share Capital Calculation

The share capital of the company is calculated as follows:

Authorized share capital: ₹6,000,000 (60,000 x ₹100)
Issued share capital: ₹6,000,000 (60,000 x ₹100)
Paid-up share capital: ₹6,600,000 (total amount payable)
Premium received: ₹60,000 (total premium)

Conclusion

In conclusion, Hema Company Ltd issued 60,000 equity shares of ₹100 each at a premium of ₹10 per share. The amount payable by the shareholders is ₹20 on application, ₹50 on allotment, and ₹40 on first and final call. The total amount payable is ₹6,600,000, and the share capital of the company is ₹6,000,000.

Step-by-Step Calculation of Share Capital

Step 1: Calculate the Total Amount Payable

Total amount payable on application: ₹20 x 60,000 = ₹1,200,000
Total amount payable on allotment: ₹50 x 60,000 = ₹3,000,000
Total amount payable on first and final call: ₹40 x 60,000 = ₹2,400,000
Total amount payable: ₹1,200,000 + ₹3,000,000 + ₹2,400,000 = ₹6,600,000

Step 2: Calculate the Share Capital

Authorized share capital: ₹6,000,000 (60,000 x ₹100)
Issued share capital: ₹6,000,000 (60,000 x ₹100)
Paid-up share capital: ₹6,600,000 (total amount payable)
Premium received: ₹60,000 (total premium)

Importance of Share Capital Calculation

Share capital calculation is an essential aspect of a company's financial management. It helps in determining the company's financial position, profitability, and growth prospects. Accurate share capital calculation is crucial for investors, creditors, and regulatory bodies to make informed decisions.

Common Mistakes in Share Capital Calculation

Incorrect calculation of total amount payable
Failure to account for premium received
Incorrect calculation of share capital

Best Practices for Share Capital Calculation

Use a systematic approach to calculate total amount payable
Account for premium received in the calculation
Verify the calculation with multiple sources

Conclusion

Frequently Asked Questions

Q1: What is the face value of each share issued by Hema Company Ltd?

A1: The face value of each share issued by Hema Company Ltd is ₹100.

Q2: What is the premium per share issued by Hema Company Ltd?

A2: The premium per share issued by Hema Company Ltd is ₹10.

Q3: What is the total premium received by Hema Company Ltd?

A3: The total premium received by Hema Company Ltd is ₹60,000 (60,000 x ₹10).

Q4: What is the total amount payable by the shareholders on application?

A4: The total amount payable by the shareholders on application is ₹1,200,000 (₹20 x 60,000).

Q5: What is the total amount payable by the shareholders on allotment?

A5: The total amount payable by the shareholders on allotment is ₹3,000,000 (₹50 x 60,000).

Q6: What is the total amount payable by the shareholders on first and final call?

A6: The total amount payable by the shareholders on first and final call is ₹2,400,000 (₹40 x 60,000).

Q7: What is the total amount payable by the shareholders?

A7: The total amount payable by the shareholders is ₹6,600,000 (₹1,200,000 + ₹3,000,000 + ₹2,400,000).

Q8: What is the authorized share capital of Hema Company Ltd?

A8: The authorized share capital of Hema Company Ltd is ₹6,000,000 (60,000 x ₹100).

Q9: What is the issued share capital of Hema Company Ltd?

A9: The issued share capital of Hema Company Ltd is ₹6,000,000 (60,000 x ₹100).

Q10: What is the paid-up share capital of Hema Company Ltd?

A10: The paid-up share capital of Hema Company Ltd is ₹6,600,000 (total amount payable).

Q11: What is the premium received by Hema Company Ltd?

A11: The premium received by Hema Company Ltd is ₹60,000 (total premium).

Q12: Why is share capital calculation important?

A12: Share capital calculation is important because it helps in determining the company's financial position, profitability, and growth prospects.

Q13: What are the common mistakes in share capital calculation?

A13: The common mistakes in share capital calculation are incorrect calculation of total amount payable, failure to account for premium received, and incorrect calculation of share capital.

Q14: What are the best practices for share capital calculation?

A14: The best practices for share capital calculation are using a systematic approach to calculate total amount payable, accounting for premium received in the calculation, and verifying the calculation with multiple sources.

Q15: Why is it essential to follow best practices for share capital calculation?

A15: It is essential to follow best practices for share capital calculation to ensure accurate calculation of share capital, which helps in determining the company's financial position, profitability, and growth prospects.

Conclusion

In conclusion, the Q&A article provides answers to frequently asked questions related to Hema Company Ltd's equity share issue and share capital calculation. The article covers various aspects of share capital calculation, including face value, premium, total amount payable, authorized share capital, issued share capital, paid-up share capital, and premium received. The article also highlights the importance of share capital calculation, common mistakes, and best practices for accurate calculation.