The allocation of additional Shares and its accounting

Hema Desai (PRACTICING CA AND ENTERPRENEUR)   (92 Points)

18 September 2007  

Hi


I need to know the accounting treatment for following situation:


Authorised Capital 20,00,000/-


Existing Issued and paid up capital Caiptal 10,00,000/- with 100% holding with promotors


Investor investing say 40,00,000/- with 5% holding in Company


i.e. Rs. 50,000/- towards Share Capital and balance amount is Share Premium


So the new Capital Holding would be


95% Promotors with 10,00,000/-


5% New Investor 50,000/-


How to determine no. of shares in revised Holding Patttern


Can the premium be as high as the balancing amount i.e. 39,50,000/-


 


Reply ASAP
Thanks
Hema