WAEC Accounting 2016 Paper

Concept:Authorized share capital is the maximum amount of share capital a company is allowed to issue by its memorandum of association.Explanation:The company offered $300{,}000$ ordinary shares for subscription.At the nominal value used in the options, total authorized share capital is $300{,}000 \times \mathrm{N}1 = \mathrm{N}300{,}000$.Authorized capital is fixed before shares are offered to the public.It is not affected by the number of shares applied for.Applications received for only $200{,}000$ shares represent the subscribed or issued portion, not the authorized capital.Therefore, authorized share capital remains $\mathrm{N}300{,}000$.Answer:A. $\mathrm{N}300{,}000$