Q27
1 markMCQSection A

The issued capital of the company is :

Accounting for Share Capital
Issued Share Capital

Options

(A)Rs. 3,00,000
(B)Rs. 30,00,000
(C)Rs. 9,00,000
(D)Rs. 33,00,000
Official Answer

Correct option: (C) Rs. 9,00,000.


  • Issued capital is the portion of authorised capital actually offered by the company to the public (or others) for subscription.
  • Dharma Ltd. offered 90,000 equity shares of Rs. 10 each for public subscription = 90,000 × Rs. 10 = Rs. 9,00,000.
issued capitalshares offered for subscriptionauthorised capitalface valueshare capital categories

Marking Scheme

  • 11 mark for selecting (C) Rs. 9,00,000.

Hint

Issued capital = number of shares actually offered to the public × face value, not the authorised limit.

Quick Oral Answer

Issued capital is the capital actually offered to the public — Dharma Ltd. offered 90,000 shares of Rs. 10 each, i.e. Rs. 9,00,000.

Analysis & Explanation

This continues the case's test of the capital hierarchy.


Why (C) is correct


  • Only 90,000 out of the authorised 3,00,000 shares were offered to the public, so issued capital = 90,000 × Rs. 10 = Rs. 9,00,000 — regardless of the fact that all 90,000 shares were fully subscribed.

Why the distractors are wrong


  • (A) Rs. 3,00,000 is not derived from any figure in the case.
  • (B) Rs. 30,00,000 is the Nominal/Authorised capital (Q26), not the issued capital.
  • (D) Rs. 33,00,000 has no basis in the case facts.

Common Mistakes

  1. 1Confusing issued capital with authorised capital and answering Rs. 30,00,000.
  2. 2Forgetting that issued capital is based on shares 'offered', not on shares later forfeited or fully paid.

Interesting Facts

A company need never issue its entire authorised capital at once — issued capital can be raised in tranches over several years as the business needs more funds.

Under Schedule III, issued capital must be shown in the Notes to Accounts even though the Balance Sheet total only reflects subscribed capital.

Spotted a mistake or something unclear?

Tell us — we fix reported answers fast.

Frequently Asked Questions

Why isn't issued capital equal to the authorised capital?

A company can choose to offer only part of its authorised capital to the public at any given time; here Dharma Ltd. offered only 90,000 of its 3,00,000 authorised shares, keeping the remaining 2,10,000 shares unissued for future use.