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WAEC Commerce 2005 Question 12

Question 12

Business Calculations

Use the following information: The nominal capital of a public limited company is made up of 400,000 ordinary shares of 50k each. The Board of Directors decided to issue 50% of it for subscription by the public.
The reserved capital is

  1. A.N300,000
  2. B.N200,000
  3. C.N100,000
  4. D.N50,000
Show the answer and explanation

Answer: C (N100,000)

Explanation

Half the shares are issued, so the unissued (reserved) half is 200,000 × 50k = N100,000.