Assignment-Accounting of Share Capital

Q-1. Arti Ltd. Invited applications For Issuing 80,000 shares of Rs 10 each at a premium of Rs 4 Per Share.The Amount was payable as Follows:

On Application – Rs 5

On Allotment – Rs 9 (Including Premium)

Applications were received for 1, 40,000 shares.

Allotment was made on the Following basis:

(i)To applicants for 80,000 shares - 60,000 shares

(ii)To applicants for 60,000 shares -20,000 shares

Money Overpaid on applications was utilized towards sum due on allotment.

Rajiv who had applied for 1200 shares failed to Pay his Dues and His shares were Forfeited.

Pass Journal Entries in the books of Arti Ltd. To record the above transactions.

Q-2. ZX Ltd. Invited applications For Issuing 5,00,000 equity shares of 10 each at a Premium of Rs 10 each Payable with Final Call. Amount Per Share was Payable as Follows:

 

Application – Rs 2, Allotment – Rs 3 ,First Call – Rs 2, Second & Final Call – Balance

Application For 8,00,000 Shares were received .Applications For 50,000 shares were rejected & the application money was refunded .Allotment was made to the remaining applicants as Follows:

 Excess applications money received with applications was adjusted towards sums due on allotment .Balance, if any was adjusted towards Future calls. Govind a shareholder belonging to category I ,to whom 1,500 shares were allotted Paid his entire Share Money With allotment. Manohar belonging to category II ,who had applied for 11,000 shares failed to pay ‘Second & Final call Money’. Manohar’s shares were Forfeited after the final call. The Forfeited shares were reissued at Rs 10 per share as Fully paid up.

Assuming that the Company maintains “calls –in advance Account’’ and “Calls in arrears Account”. Pass Necessary Journal Entries for the Above transactions in the books of ZX Ltd.

Q-3. X Ltd. Issued for public subscription 1,00,000 equity shares of Rs 10 each at a Premium of Rs 5 per share payable as under:

On Application – Rs 5, On Allotment – Rs 7 ( Including Premium), On First & Final Call – Rs 3

Applications were received for 1,50,000 shares. Allotment was made Pro-rata to all the applicants and the money overpaid on application was utilized towards sums due on allotment.

Suruchi who applied for 1,800 shares failed to Pay the allotment and call money and the shares were subsequently forfeited .Two-Third of the Forfeited shares were re-issued to supriya as fully –Paid up at Rs 8 per share. Show the Journal Entries to record the above transactions.

Q- 4. On 1^st Jan.2017, Saraswati Ltd. Issued 50,000 equity shares of Rs 10 each at a Premium of Rs 4 per share ,Payable as follows:

Application-Rs 6 (Including Rs 1 Premium),Allotment –Rs 2 (Including Rs 1  premium),First Call – Rs 4 (Including Rs 1 Premium) ,Second & Final Call –Rs 2(Including Rs 1 Premium )

Applications were received for 65,000 shares of which applications for 5000 shares were rejected and their money was refunded. Rest of the applicants were issued shares on Pro-rata basis and their excess money was adjusted towards allotment.

Ashok, to whom 1000 shares were allotted ,failed to pay the allotment money and his shares were Forfeited after allotment .Rohan who, applied for 1800 shares failed to pay the Two calls and His Shares were Forfeited after the Final call.

1900 Forfeited shares were reissued as Fully Paid on receipt of Rs 9 Per share , the whole of Rohan’s shares being included. Pass Necessary Journal Entries.

Q-5. BG Limited issued 2,00,000 equity shares of Rs 20 each at a Premium of Rs 5 per share. The shares were allotted in the Proportion of  5 : 4 of shares applied and allotted to all the applicants .Deepak, who had applied for 900 shares ,failed to pay allotment money of Rs 7 per share (including premium) and on his Failure to pay First & Final call of Rs 2 Per share , his shares were Forfeited . 400 of the Forfeited shares were reissued at Rs 15 per share as fully paid up. Showing your working clearly, pass Necessary Journal Entries for the Forfeiture and reissue of Deepak’s share in the books of BG ltd. The Company ‘Calls-in-arrears Account ’ .

Q-6. R  ltd. Purchased the running Business of M/s Mukherjee Bros. for a Sum of Rs 60,00,000 Payable by the issue of equity shares of Rs 10 each at Rs 40. The assets and liabilities consisted of the following:

Land & Building =32,00,000    Plant & Machinery =16,00,000      Stock = 15,00,000

Sundry Debtors = 6,00,000      Sundry creditors = 4,00,000

Pass the Journal Entries in the Books of R ltd.

Q-7. X Ltd. Issued 20,000 , 7 % Preference shares of Rs 100 each at a Premium of 6 % Payments were to be made as – Rs 25 on application ; Rs 46 on allotment ; Rs 10 on First call and Rs 25 on final Call.

The Application for 18,000 shares were received and all were accepted. All the money was duly received except the First and Final call on 100 shares.

Give the Necessary Journal Entries and Prepare Cash Book of the Company .Also show the Share capital in the Balance sheet of the Company.

Q-8. Chandra Ltd. Issued 40,000 Equity shares of Rs 10 each at Par Payable as to :

Rs 2.5 on application ; Rs 2 on allotment ; Rs 2.5 on First call and Rs 3 on Final Call .

All the shares were allotted and amount received except Mohan holding 800 shares Paid the Final call money along with First call and Naresh Holding 300 shares did not pay the First call money in time. He Paid the first call money along with final call.  

Make Journal Entries for the First Call and Final call in the books of Company. 

Q-9.  A Company invited applications for 5,000 shares of Rs 100 each. The amount is Payable as Follows:

On application : Rs 20   On Allotment : Rs 30      On First Call : Rs 20     On Second & Final Call : Rs 30

Applications were received for 8,000 shares .Applications For 1,000 shares were rejected and Pro-rata allotment was made to the remaining applicants.

All calls were made and Duty paid except :

(i)Ganesh , the holder of 200 shares paid the two calls with allotment.

(ii)Shiva, the holder of 300 shares failed to pay the First and second call money.

Pass Necessary Journal Entry to record the above transactions.

Q-10. Luxury Cars ltd. Invited applications for issuing 10,000 Equity shares of Rs 50 each at a Premium of Rs 100 Per share . The amount was Payable as Follows:

On Application – Rs 75 per share ( including Rs 50 Premium )

On Allotment – The Balance

The issue was Fully subscribed. A shareholder holding 400 shares paid his entire share money at the time of application. Another shareholder holding 300 shares did not pay the allotment money. His shares were Forfeited . The Forfeited shares were Later on re-issued for Rs 90 per share as Fully paid up. Pass Necessary Journal Entries for the above transactions in the Books of the Company.