Lesson eLearning

A company issues 12,000 shares of ₹50 each at ₹48 each. Calculate:

medium 2 marks Class 12 · Accountancy · Accounting for Share Capital
Answer
₹24,000, ₹12,000, ₹12,000, ₹600,000

The correct answer is ₹24,000, ₹12,000, ₹12,000, ₹600,000 — Share Capital credit = 12,000 × ₹50 = ₹600,000

Step-by-step solution

  1. Discount per share = ₹50 - ₹48 = ₹2
  2. Total discount = 12,000 × ₹2 = ₹24,000
  3. 50% of discount to Capital Reserve = ₹24,000 × 0.5 = ₹12,000
  4. 50% written off as loss = ₹12,000
  5. Share Capital credit = 12,000 × ₹50 = ₹600,000
Common mistake: Applying wrong percentage to discount

Concept tested: Discount on share issue

Published · How this solution was prepared and checked

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