Question

The authorized capital stock of a proposed corporation is P1,000,000 divided into 10,000 shares with a par value of P100 each. The minimum amount of subscription that must be paid up is

A. P62,500 or 625 shares
B. P50,000 or 500 shares
C. P75,000 or 750 shares
D. P87,500 or 875 shares

Answer 1

The minimum amount of subscription that must be paid up is C. P75,000 or 750 shares.

Step-by-step explanation:

To calculate the minimum amount of subscription that must be paid up, we can use the formula:

Minimum Subscription = Authorized Capital Stock x Minimum Percentage Required

Given that the authorized capital stock is P1,000,000 and the par value of each share is P100, we can calculate the number of shares as follows:

Number of Shares = Authorized Capital Stock / Par Value per Share Number of Shares = P1,000,000 / P100 Number of Shares = 10,000 shares

Now, to find the minimum amount of subscription, we need to determine the minimum percentage required. This is typically set by the corporation’s bylaws or regulations. In this case, if we assume a minimum percentage of 75%, we can calculate the minimum subscription as follows:

Minimum Subscription = P1,000,000 x 75% Minimum Subscription = P750,000

Converting this amount into shares gives us:

Minimum Subscription in Shares = P750,000 / P100 Minimum Subscription in Shares = 7,500 shares

Therefore, the correct answer is C. P75,000 or 750 shares.