The share capital of Waugh Ltd 10 000 000 ordinary shares that had an issue price of $4.00 per share and they are currently paid to $1.00.
-On 31 December the directors of Waugh Ltd decided that its ordinary shares should be consolidated so that the share capital would comprise 2 500 000 ordinary shares.After the consolidation, the amount outstanding (uncalled) on each share will be:

Question

Quizplus · Accepted Answer

Before the consolidation, the total share capital was $40,000,000 (10,000,000 x $4.00). After the consolidation, the total share capital will still be $40,000,000 (2,500,000 x $16.00).

To find the amount outstanding (uncalled) on each share after the consolidation, we need to divide the total share capital by the number of consolidated shares.

$40,000,000 / 2,500,000 = $16.00.

However, the shares were previously paid up to $1.00, so we need to subtract that from the new amount outstanding:

$16.00 - $1.00 = $15.00.

Therefore, the correct answer is B) $12.00.

The Share Capital of Waugh Ltd 10 000 000 Ordinary