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share capital

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › share capital

  • This topic has 3 replies, 2 voices, and was last updated 1 year ago by MikeLittle.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • January 14, 2024 at 7:59 pm #698024
    samiaasif942
    Participant
    • Topics: 31
    • Replies: 4
    • ☆

    In the context of share capital, which of the following may a company undertake to do freely without restriction?
    Extinguish or reduce liability on partly paid shares
    Cancel paid-up share capital which has been lost or which is no longer represented by available assets
    Cancel unissued shares
    Pay off part of paid-up share capital out of surplus assets

    kindly help me with this question the answer is statement 1
    i am still confused how and is it wrong or right
    thank you i will be helpful

    January 14, 2024 at 9:07 pm #698069
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23319
    • ☆☆☆☆☆

    I don’t agree with your choice. Where shares are in issue and are only partly paid, the act of cancellation of the unpaid element is taking away from the payables of the company the security of some liquidator of the company in the future from being able to call up the unpaid amounts of those partly paid shares and thus depriving the liquidator of the ability to swell the company’s funds.

    You’ll need to think again and this time, when you have selected your answer, justify your choice to me.

    OK?

    January 14, 2024 at 10:44 pm #698076
    samiaasif942
    Participant
    • Topics: 31
    • Replies: 4
    • ☆

    S? statement 3 is correct in this case right teacher

    January 15, 2024 at 10:20 am #698217
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23319
    • ☆☆☆☆☆

    The cancellation of unissued shares is correct.

    Good luck in your exam ‘in a few days’

    OK?

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