Question : Assertion A: Sun Flower Ltd. issued 10,000 equity shares of Rs.10 each. It received the nominal face value of the shares except the first and final call of Rs.3 per share on 1000 shares. These 1,000 equity shares will be shown as subscribed but not fully paid up under subscription capital.
Reason R: The company has not received Rs.3 per share on 1000 equity shares. hence, these shares are not fully paid up. They will be shown as subscribed but not fully paid under-subscribed capital.
In the context of the above two statements, which of the following is correct?
Option 1: Assertion A and Reason R are correct but the Reason R is not correct explanation of Assertion A
Option 2: Both Assertion A and Reason R are correct and Reason R is the correct explanation of Assertion A
Option 3: Only Assertion A is correct
Option 4: Both Assertion A and Reason R are not correct .
Correct Answer: Both Assertion A and Reason R are correct and Reason R is the correct explanation of Assertion A
Solution : Answer = Both Assertion A and Reason R are correct, and Reason R is the correct explanation of Assertion A
The company has not received Rs.3 per share on 1000 shares. These shares will be shown under the heading of subscribed but not fully paid up. The shares are considered subscribed but not fully paid up because the company has not received the full amount of the first and final call on these shares, making them partially paid up.
