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Accountancy 4 Marks Question

Accounting for Share Capital · CBSE STD 12 Commerce (CBSE - English Medium). 24 questions.

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4 Marks Question

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24 questions · timed · auto-graded

Question 14 Marks
Himmat Ltd has authorised share capital of ₹ 50,00,000 divided into 5,00,000 Equity Shares of ₹ 10 each. It has existing issued and paid up capital of ₹ 5,00,000. It further issued to public 1,50,000 Equity Shares at par for subscription payable as under:
On Application: ₹ 3
On Allotment: ₹ 4 and
On Call: Balance Amount.
The issue was fully subscribed and allotment was made to all the applicants. Call was made during the year and was duly received.
Show share capital of the company in the Balance Sheet of the Company.
Answer

Notes of Account:
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Question 24 Marks
Pass necessary journal entries in the books of the company for the following transactions:
Vishesh Ltd. forfeited 1,000 Equity Shares of ₹ 10 each issued at a premium of ₹ 2 per share for non-payment of allotment money of ₹ 5 per share including premium. The final call of ₹ 2 per share was not yet called on these shares. Of the forfeited shares 800 shares were reissued at ₹ 12 per share as fully paid-up.
The remaining shares were reissued at ₹ 11 per share fully paid-up.
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Question 34 Marks
X Ltd. forfeited 900 Equity Shares of ₹ 100 each for the non-payment of allotment money of ₹ 30 per share and the first call of ₹ 20 per share. The second and final call of ₹ 25 per share has not been made. The forfeited shares were reissued for ₹ 90 per share, ₹ 75 paid-up. Journalise the above.
Answer
Application
25
Balancing Figure
Allotment
30
 
First Call
20
 
Final Call
25
Un-called
 
100
 
Called-up ₹ 75 per share

Working Note:
Share Forfeiture Acount credit = Share application money received for 900 shares
= ₹ 25 × 900 shares
= ₹ 22,500
Calculation of Capital Reserve
Share Forfeiture Acount credit = ₹ 22,500
Share Forfeiture Acount credit = NIL
Capital Reserve = ₹ 22,500
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Question 44 Marks
Show the forfeiture and reissue entries under the following cases:
Y Ltd. forfeited 400 shares of ₹ 10 each, fully called-up, held by Mr. B for non-payment of final call money of ₹ 4 per share. These shares were reissued to Mr. T at ₹ 12 per share as fully paid-up.
Answer

Working Notes:
Share Forfeiture Credit (at the time of forfeiture of shares)
₹ 2400
Less: Share Forfeiture Debit (at the time of re-issue shares)
NIL
Balance in Share Forfeiture after re-issue of shares
₹ 2,400
Capital Reserve = Balance in Share Forfeiture of re-issue shares
= ₹ 2,400
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Question 54 Marks
Lennova Ltd. has authorised share capital of ₹ 1,00,00,000 divided into 1,00,000 Equity Shares of ₹ 100 each. It has existing issued and paid up capital of ₹ 25,00,000. It further issued to public 25,000 Equity Shares at a premium of 20% for subscription payable as under:
On Application: ₹ 30
On Allotment: ₹ 60 and
On Call: Balance Amount.
The issue was fully subscribed and allotment was made to all the applicants. The company did not make the call during the year.
Show share capital of the company in the Balance Sheet of the Company.
Note: Problems related to Disclosure of share Capital in compny's balance sheet are also given under the head issue of shares at per and at premium.
Answer

Notes to Account:
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Question 64 Marks
Commerce Publications Ltd. issued 50,000 Equity Shares of ₹ 10 each at a premium of 10% payable as under:
On application
₹ 2,
On first call
₹ 2,
On allotment
₹ 5,
On final call
₹ 2.
The calls were made by the company and all the money was duly received except the allotment and call money on 500 shares. These shares were, therefore, forfeited and later reissued @ ₹ 9 per share as fully paid-up.
Pass necessary journal entries to record the above transactions.
Answer
Issued and applied 50,000 equity shares at ₹ 10 each at a premium ₹ 1.
Application
₹
2
 
Allotment
₹
5
(4 + 1)
First Call
₹
2
 
Final Call
₹
2
 
 
₹
11
(10 + 1) called-up

Working Note:
Share Forfeiture Credit
1,000
Less: Share Forfeiture Debit
500
Balance in Share Forfeiture (after re-issue)
500
Capital Reserve = Balance in Share Forfeiture (after re-issue) = ₹ 500
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Question 74 Marks
A share of ₹ 100 issued at a premium of ₹ 10 on which ₹ 80 (including premium) was called and ₹ 60 (including premium) was paid, has been forfeited. This share was afterwards reissued as fully paid-up for ₹ 70. Give Journal entries to record the above.
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Question 84 Marks
SRCC Ltd. was registered with a capital of ₹ 25,00,000 in shares of ₹ 10 each. It issued a prospectus inviting applications for 25,000 shares at 40% premium payabl;e as follows:
On application ₹ 5 (including ₹ 1 premium), on Allotment ₹ 4 (including ₹ 1 premium), on first call ₹ 3 (including ₹ 1 premium), on second and final call ₹ 2 (including ₹ 1 premium).
Applications were received for 25,000 shares. All money was duly received. Pass the necessary Journal entries.
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Question 104 Marks
Show the forfeiture and reissue entries under the following cases:
Z Ltd. forfeited 250 shares of ₹ 10 each, fully called-up held by Mr. C for non-payment of allotment money of 3 per share and first and final call money of 4 per share. these shares were reissued @ ₹ 8 per share as fully paid-up to Mr.P.
Answer

Working Notes:
Share Forfeiture Credit (at the time of forfeiture of shares)
₹ 750
Less: Share Forfeiture Debit (at the time of re-issue shares)
₹ 500
Balance in Share Forfeiture after re-issue of shares
₹ 250
Capital Reserve = Balance in Share Forfeiture of re-issue shares
= ₹ 250
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Question 114 Marks
Pass journal entries in the following cases:
M. Ltd forfeited 200 Equity Shares of ₹ 10 each, issued at a premium of ₹ 5 per share, held by Ram for non-payment of the final call of ₹ 3 per share. Of these, 100 shares were reissued to Vishu at a discount of ₹ 4 per share.
Answer

Working Note:
Share Forfeiture of re-issued shares
Share Forfeiture
Cr.
₹ 7
per share
Share Forfeiture
Dr.
₹ 4
per share
Balance in share forfeiture after re-issue
Cr.
₹ 3
per share
Capital Reserve = Balance in Share Forfeiture after re-issue × No. of shares re-issued
= ₹ 3 × 100 shares
= ₹ 300
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Question 124 Marks
Citizen Watches Ltd. invited applications for 50,000 shares of ₹ 10 each payable ₹ 3 on application, ₹ 4 on allotment and balance on first and final call. Applications were received for 60,000 shares. Applications were accepted for 50,000 shares and remaining applications were rejected. All calls were made and received except First and Final call on 500 shares.
Pass the journal entries in the books of Citizen Watches Ltd.
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Question 144 Marks
X Ltd. forfeited 100 shares of ₹ 10 each (₹ 8 called-up) issued at a premium of ₹ 2 per share to Mr. R, on which he had paid applications money of ₹ 5 per shar , for non-payment of allotment money of ₹ 5 per share (including premium). Out of these, 70 shares were reissued to Mr. Sanjay as ₹ 8 called-up for ₹ 7 per share. Give necessary journal entries relating to forfeiture and reissue of shares.
Answer

Working Notes:
Share Forfeiture Credit
₹ 5
 per share
Less: Share Forfeiture Debit
₹ 1
 per share
Balance in Share Forfeiture of re-issued shares
₹ 4
 per share
Capital Reserve = Balance in Share Forfeiture Account of re-issue shares × No. of shares re-issued
= 70 × 4
= ₹ 280
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Question 154 Marks
The Directors of M Ltd resolved on 1st May, 2015 that 2,000 Equity Shares of ₹ 10 each, ₹ 7.50 paid be forfeited for non-payment of final call of ₹ 2.50. On 10th June, 2015, 1,800 of these shares were reissued for ₹ 6 per share. Give necessary Journal entries.
Answer

Working Notes:
Share Forfeiture
7.5
Cr.
Share Forfeiture
(4.0)
Dr.
Balance in Share Forfeiture Account after re-issue
₹ 3.5
Cr. per share
Capital Reserve = No. of Shares reissued × Balance in Share Forfeiture Account after reissue (per share)
= 1,800 × ₹ 3.5 (per share)
= ₹ 6,300
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Question 164 Marks
Marigold Ltd. was registered with the authorized capital of ₹ 3,00,000 divided into 3,000 shares of ₹ 100 each, which were offered to the public. Amount payable as ₹ 30 per share on application, ₹ 40 per share on allotment and ₹ 30 per share on first and final call. These shares were fully subscribed and all money was dully received. Prepare journal and Cash Book.
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Question 174 Marks
Star Ltd. forfeited 500 Equity Shares of ₹ 100 each for non-payment of first call of ₹ 30 per share. The final call of ₹ 10 per share was not yet made. Out of these, 60% shares were reissued for ₹ 39,000 fully paid. journalise the forfeiture and reissue of shares.
Answer

Working Notes:
Amount transferred to Capital Reserve
Shares Re-issued = 300
Shares Forfeited = 500
Amount forfeited in respect of 300 shares $=\text{Amount Forfeited}\times\frac{\text{Shares Re-issued}}{\text{Shares Forfeited}}$
$=30,000\times\frac{300}{500}=18,000$
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Question 184 Marks
A Limited Company forfeited 100 Equity Shares of the face value of ₹ 10 each, ₹ 6 per share called-up, for non-payment of first call of ₹ 2 per share. The forfeited shares were subsequently reissued as fully paid-up @ ₹ 7 each.
Give necessary entries in the company's journal.
Answer

Working Notes:
Share Forfeiture Credit
₹ 400
Less: Share Forfeiture Debit
₹ 300
Balance in Share Forfeiture of re-issued shares
₹ 100
Capital Reserve = Balance in Share Forfeiture Account of re-issue shares
= ₹ 100
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Question 194 Marks
Z Ltd. issued 20,000 Equity Shares of ₹ 10 each at par payable: On application ₹ 2 per share; on allotment ₹ 3 per share; on first call ₹ 3 per share; on second and final call ₹ 2 per share.
Mr. Gupta was allotted 100 shares. Pass necessary journal entry relating to the forfeiture of shares in each of the following alternative cases:
Case I: If Mr. Gupta failed to pay the allotment money and his shares were forfeited.
Case II: If Mr. Gupta failed to pay allotment money and on his subsequent failure to pay the first call, his shares were forfeited.
Case III: If Mr. Gupta failed to pay the first call and on his subsequent failure to pay the second and final call, his shares were forfeited.
Answer
Application
₹
2
Allotment
₹
3
First Call
₹
3
Final Call
₹
2
Total
₹
10
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Question 204 Marks
Gaurav applied for 5,000 shares of ₹ 10 each at a premium of 2.50 per share. But he was allotted only 2,500 shares on pro rata basis. After having paid ₹ 3 per share on application, he did not pay allotment money of ₹ 4.50 per share (including premium) and on his subsequent failure to pay the first call of ₹ 2 per share, his shares were forfeited. These shares were reissued at the rate of ₹ 8 per share credited as fully paid.
Pass journal entries to record the forfeiture and reissue of shares.
Answer

Working Note:
Calculation of Amount unpaid on Allotment
Amount received on application (5,000 × 3) = 15,000
Less: Amount adjusted on application (2,500 × 3) = 7,500
Excess amount received on application = 7,500
Amount due on allotment (2,500 × 4.5) = 11,250
Amount unpaid on allotment = 3,750 (11,250 – 7,500)
Note:
₹ 7,500 received on application will be transferred to allotment, but first of all we have to transfer such amount to Capital A/c and rest would be transferred to Securities Premium A/c. Capital on allotment is ₹ 5,000 (2,500 × 2) that is fully received and balance amount of advance ₹ 2,500 will be transferred to Securities Premium A/c. So, amount of premium unpaid is ₹ 3,750 (2,500 × 2.5 – 2,500).
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Question 214 Marks
On 1st May, 2014, Directors of a Limited Company forfeited 200 shares of ₹ 20 each, ₹ 15 per share called-up, on which ₹ 10 per share has been paid by A, the amount of the first call of ₹ 5 per share being unpaid. Ten days Later, the Directors reissued the forfeited shares to B credited as ₹ 15 per share paid-up, for a payment of ₹ 10 per share.
Give journal entries in the company's books to record the forfeited shares and their reissue.
Answer

Working Notes:
Share Forfeiture Credit (at the time of forfeiture)
₹ 2,000
Less: Share Forfeiture Debit (at the time of re-issue)
₹ 1,000
Balance in Share Forfeiture Account after re-issue
₹ 1,000
Capital Reserve = Balance in Share Forfeiture Account after re-issue
= ₹ 1,000
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Question 224 Marks
Authorized capital of Suhani Ltd. is ₹ 45,00,000 divided into 30,000 shares of ₹ 150 each. Out of these company issued 15,000 shares of ₹ 150 each at a premium of ₹ 10 per share. the amount was payable as follows:
₹ 50 per share on application, ₹ 40 per share on allotment (including premium ), ₹ 30 per share on firs t call and balance on final call. Public applied for 14,000 shares. All the money was duly received.
Prepare an extract of Balance Sheet of Suhani Ltd. as per Schedule III, Part I of the companies Act, 2013 disclosing the above information. Also prepare 'Notes to Accounts' for the same.
Answer

NOTES TO ACCOUNTS:
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Question 234 Marks
Gopal Ltd. was registered with an authorised capital of ₹ 50,00,000 divided into Equity Shares of ₹ 100 each. The company offered for public subscription all the shares. Public applied for 45,000 shares and allotment was made to all the applicants. All the calls were made and were duly received except the final call of ₹ 20 per share on 500 shares.
Prepare the Balance Sheet of the company showing the different types of share capital.
Answer

Notes of Account:
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Question 244 Marks
JCV Ltd., forfeited 200 shares of ₹ 10 each issued at a premium of ₹ 2 per share for the non-payment of allotment money of ₹ 3 per share (including premium). The first and final call of ₹ 4 per share has not been made as yet. 50% of the forfeited shares were reissued at ₹ 8 per share as fully paid-up. Pass necessary Journal entries for the forfeiture and reissue of shares.
Answer
Application
₹
5
 
Allotment
₹
3
(1 + 2)
First and Final Call
₹
4
 
Total
 ₹
12
(10 + 2)
Called-up = Application + Allotment
= ₹ 5 + 3 (including premium ₹ 2)

Working Note:
Share Forfeiture of Re-issued Shares
Share Forfeiture (at the time of forfeiture)
Cr.
5
 
Less: Share Forfeiture (at the time of re-issue)
Dr.
2
 
Balance in Share Forfeiture after re-issue
Cr.
3
per share
Capital Reserve,
$=\frac{\text{Amount of share forfeiture}}{\text{Total share forfeited}}$ × Shares reissued- Loss on reissue of for feited shares
$=\frac{1000}{200}\times100-100\times2=500-200=300$
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