The authorised share capital is the maximum capital that a company can raise during its lifetime. Issued share capital is that capital which is offered to the public. Called up capital is that part of issued share capital which is called up by the company and paid up share capital is that part of called up capital which is paid by the equity shareholders.

 Directors are reposible for the affairs of the company, including allotment. Hence Directors shall be held liable to compensate the company or the allottee for any loss, damage or cost suffered through irregular allotment.

 The Directors are empowered by Articles of Association to forefeit shares due to non payment.

 The premium received at the time of issue of debentures is to be credited to the securities premim account and the premium which is to be paid at the time of redemtion of debentures is a loss to be provided at the time of issue of debentures and this loss is written off in equal installments during the lifetime of debentures.  Loss on issue of debentures= Rs 2,00,000 Life of debentures                 = 10 Years Loss to be written off every year= 200000/10                                                        = Rs 20,000

 The Net profit after tax is distributed among shareholders as dividends in their shareholding ratio. Dividends are distributed as a percentage of paid up share capital. 

 All of the above options represents characteristics of a Corporate form of business organisation.

 Assuming face value of shares =Rs 10 per share Since the shares are re-issued at Rs 9 per share Amount to be transferred to Share Capital Account out of Share Forefeiture A/c = Rs 1*2000 shares= Rs 2000 Balance amount remaing in Share forefeiture account is to be transferred to Capital reserve accounti.e Rs (3000-2000)=Rs 1000

 Underwriting is an agreement where by the underwriters ensure the company that in case the shares and debentures offered to the public, are not subscribed by the public to the extent, the balance of shares and debentures will be taken up by the underwriters.

 Amount payable on application  = Rs 2 Amount payable on allotment       =Rs 4 Amount payable on 1st Call         =Re1 Total                                                   =Rs 7 Amount payable on 2nd Call        = Rs (10-1-7)                                                             =Rs 2

 Preference Shareholders hold a preferential right over quity shares for the payment of dividend as well as repayment of capital.

 As per Section 55, no company shall issue irredeemable preference shares or preference shares redeemable after the expiry of 20 years from the date of such issue.

As per SEBI guidelines, a company must receive a minimum of 90% subscription against entire issue before making any allotment of shares, hence underwriting is mandatory to fulfill such requirement.

 As per Section 55, onl Fully Paid Preference Shares can be redeemed.

Those debentures which are secured by either a fixed charge or a floating charge on the assets of the company are called secured or mortgage debentures.

 According to Section 52 of the Companies Act,2013 Share premium can be used to write off any discount allowed on the issue of securities or debentures.Share premium                                                =Rs 2,00,000 Discount on issue of preference shares     =Rs(5%of 15,00,000)                                                                             =Rs 75000 Net Balance in Securities Premium A/c       =Rs (2,00,000-75000)                                                                             =Rs 125,000  

Preference shares can to be redeemed from the fresh issue of equity share or from divisible profits. Where divisible profits are used for the redemtion of debentures, same amount should be transferred to CRR a/c. Preoceeds of fresh issue of debentures cannot be used for the redemption of preference shares.Amount of Preference Shares                                =Rs 3,00,000 Amount of fresh proceeds of equity shares          =Rs 2,50,000 Amount to be transferred to CRR                           =Rs (3,00,000-2,50,00)                                                                                       =Rs 50,000

Purchase consideration includes face value as well as premium.thus,No of debentures= 28,80,000/(80+10)                                  =28,80,000/90                                 = 32,000 debentures

 The premium on debentures is credited to 'Securities Premium' Account and Securities Premium can be used to write off the discount on issue of shares or debentures or premium on redemption of shares or debentures or underwriting commission but cannot be used to pay dividends.

 Any balance remaining in the Share Forfeiture account after providing for any loss on re-issue is to be transferred to capital reserve account.

Profit of a company can be distributed either in the form of dividend to equity shareholders or issue of bonus shares. Since bonus shares themselves are a mode of distribution of profit, dividend on bonus shares is not a right term. Thus, profit of a company can be distributed as dividend to equity shareholders.