Accountancy 4 Marks Question

The partnership between A & B was dissolved on March 31, 2005. Their capitals on that date were Rs. 1,70,000 and Rs. 30,000 respectively. Rs. 1,00,000 was owed by the firm to A, and B owed to the firm Rs. 20,000. Creditors on that date were Rs. 2,00,000. The assets realised Rs. 4,50,000 exclusive of what was owed by B. Find the profit or loss on realisation.

Pass necessary journal entries for the following transactions in the books of Gopal Ltd:

1. Purchased furniture for ₹ 2,50,000 from M/s Furniture Mart. The payment to M/s Furniture Mart was made by issuing equity shares of ₹ 10 each at a premium of 25%.
2. Purchased a running business from Aman Ltd. for a sum of ₹ 15,00,000. The payment of ₹ 12,00,000 was made by issue of fully paid equity shares of ₹ 10 each and balance by a bank draft.

The assets and liabilities consisted of the following:

Plant ₹ 3,50,000; Stock ₹ 4,50,000; Land and Building ₹ 6,00,000; Sundry Creditors ₹ 1,00,000.

The authorised capital of Suhas Ltd. is ₹ 50,00,000 divided into 25,000 shares of ₹ 200 each. Out of these, the company issued 12,000.shares of ₹ 200 each at a premium of 10%. The amount per share was payable as follows: Prepare an extract of Balance Sheet of Suhas Ltd. as per Revised Schedule VI Part I of the. Companies Act 1956 disclosing the above information. Also prepare 'notes to accounts' for the same.

Nikhil Ltd. purchased a running business from Sonia Ltd. for a sum of ₹ 22,00,000 by issuing 20,000 fully paid equity shares of ₹ 100 each at a premium of 10%. The assets and liabilities consisted of the following:
Machinery ₹ 7,00,000, Debtors ₹ 2,50,000, Stock ₹ 5,00,000, Building ₹ 11,50,000 and· Bills Payable ₹ 2,50,000.
Pass necessary Journal entries in the books of Nikhil Ltd. for the above transactions.

Sagar Ltd. was registered with an authorised capital of Rs. 1,00,00,000 divided into 1,00,000 equity shares of Rs. 100 each. The company offered for public subscription 60,000 equity shares. Applications for 56,000 shares were received and allotment was made to all the applicants. All the calls were made and were duly received except the second and final call of Rs. 20 per share on 700 shares. Prepare the Balance Sheet of the company showing the different types of share capital.

Pass necessary journal entries for the following transactions in the books of Rajan Ltd:

1. Rajan Ltd. purchased machinery of ₹ 7,20,000 from Kundan Ltd. The payment was made to Kundan Ltd. by issue of equity shares of ₹100 each at 10% discount.
2. Rajan Ltd. purchased a running business from Vikas Ltd. for a sum of ₹ 2,50,000 payable as ₹ 2,20,000 in fully paid equity shares of ₹ 10 each and balance by a bank draft. The assets and liabilities consisted of the following:

Plant & Machinery ₹ 90,000; Building ₹ 90,000; Sundry Debtors ₹ 30,000; Stock ₹ 50,000; Cash ₹ 20,000; Sundry Creditors ₹ 20,000.

The authorised capital of Suhani Ltd. is ₹ 45,00,000 divided into 30,000 shares of ₹ 150 each. Out of these company issued 15,000 shares oft 150 each at a premium of ₹ 1O per share. The amount was payable as follow:
₹ 50 per share on application, ₹ 40 per share on allotment (including premium), ₹ 30 per share on first 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 Revised Schedule VI Part - I of the Companies Act 1956 disclosing the above information. Also prepare 'notes to accounts' for the same.

Madhav Ltd. issued fully paid equity shares of ₹ 80 each at a discount of ₹ 5 per share for the purchase of a running business from Gupta Bros. for a sum of ₹ 15,00,000. The assets and liabilities consisted of the following:
Plant ₹ 5,00,000; Trucks ₹ 7,00,000; Stock ₹ 3,00,000; Machinery ₹ 6,00,000 and Sundry Creditors ₹ 5,00,000.
You are required to pass necessary journal entries for the above transactions in the books of Madhav Ltd.

A Co. issued to the public for subscription 40,000 shares of ₹ 10 each at a discount of 10% payable as ₹ 2 each on application, Allotment and First call and ₹ 3 on the Final call. Applications were received for 60,000 shares and allotment was made pro-rata to 80% of applicants. R to whom 1,600 shares were allotted paid only the application money, and S who had applied for 2,400 shares paid the entire call money due along with the allotment. Pass necessary Journal entries to record the above transactions.

Petromax Ltd., issued 50,000 shares of ₹ 10 each at a premium of ₹ 2 per share payable as ₹ 3 on application ₹ 5 including premium on allotment and the balance in equal instalments over two calls. Applications were received for 92,000 shares and the allotment was done as under:

A	:	Applicants of 40,000 shares	-	Allotted 30,000 shares
B	:	Applicants of 40,000 shares	-	Allotted 20,000 shares
C	:	Applicants of 12,000 shares	-	Nil

Suresh who had applied for 2,000 shares (Category A) did not pay any money other than application money.
Chandar who was allotted 800 shares (Category B) paid the call money due along with allotment.
All other allottees paid their dues as per schedule.
Pass necessary journal entries in the books of Petromax Ltd. to record the above.

S Ltd. was registered with an authorised capital of Rs. 4,00,000 divided into 40,000 equity shares of Rs. 10 each. The company offered to the public for subscription 30,000 equity shares. Applications for 28,000 equity shares were received and allotment was made to all the applicants. All calls were made and were duly received except the final call of Rs. 2 per share on 200 shares.
Prepare the Balance Sheet of the company showing the different categories of Share Capital.

Raunit Styles Ltd. was registered with a capital of ₹ 85,00,000 divided into equity shares of ₹ 100 each. The company invited applications for issuing 45,000 shares.
The amount was payable as ₹ 25 on application, ₹ 35 on allotment, ₹ 25 on first call and balance on final call.
Applications were received for 42,000 shares and allotment was made to all the applicants. Kavi, to whom 3,300 shares were alloted, failed to pay both the calls. His shares were forfeited.
Present the Share Capital in the Balance Sheet of the company as per Schedule III of the Companies Act, 2013.

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.

Can forfeited shares be re-issued at a discount? If so, to what extent? Where would you transfer the balance left in the share forfeited account after the re-issue of such shares?

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.

Give journal entries for forfeiture and re-issue of shares:
X Ltd. forfeited 300 shares of ₹ 100 each, ₹ 75 called-up, issued at 10% premium (to be paid at the time of allotment) for non-payment of allotment money of ₹ 30 per-share (including premium) and first call of ₹ 20 per share Out of these, 100 shares were re-issued as fully paid-up in such a way that ₹ 3,100 were transferred to capital reserve.

What are the uses of securities premium?

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.

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.

Fill in the missing figures in the following journal entries:

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.

M M Limited is registered with an Authorised capital of ₹ 200 Crores divided into equity shares of ₹ 100 each. On 1st April, 2016 the Subscribed and Called up capital of the company is ₹ 10,00,00,000. The company decided to help the unemployed youth of the naxal affected areas of Andhra Pradesh, Chhattisgarh and Odisha by opening 100 'Skill Development Centres'. The company also decided to provide free medical services to the villagers of these status by starting mobile dispensaries. To meet the capital expenditure of these activities the company issued 1,00,000 equity shares during the financial year 2016-17. These shares were fully subscribed and paid.
Present the share capital of the company in its Balance Sheet. Also identify any two values that the company wants to propagate.

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.

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.

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.

Complete the missing (?) figures in the following Extract of Balance Sheet:

Bansal Heavy machine Ltd purchased machine worth ₹ 3,20,000 from Handa Trader. Payment was made as ₹ 50,000 cash and remaining amount by issue of equity share of the face value of ₹ 100 each fully paid at an issue price of ₹ 90 each.

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.

Show the Share Capital in Company's balance sheet with imaginary figures.

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.

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.

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.

Jaya Ltd. issued 60,000 shares of ₹ 10 each at a premium of ₹ 2 per share payable as ₹ 3 on Application, ₹ 5 (including primium) on allotment and the balance on first and final call. Applications were received for 82,000 shares. The Directors resolved to allot as follows:

(A) Applicants of 30,000 shares	20,000 shares
(B) Applicants of 50,000 shares	40,000 shares
(C) Applicants of 2,000 shares	Nil

Ramesh who had applied for 900 shares in category.

1. And Suresh who was allotted 600 shares in category.
2. Failed to pay the allotment money. Calculate the amount received on Allotment.

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.

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.

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.

X Ltd. forfeited 1,000 shares of ₹ 20 each issued at a premium of ₹ 2 per share to Ashok (₹ 18 called-up) on which he did not pay allotment of ₹ 6 (including premium) and 1st Call of ₹ 4. Give Journal Entries forforfeiture and re-issue in the following cases:

1. 600 shares were re-issued to Mohan at ₹ 14 per share as ₹ 18 paid up;
2. 200 shares to Sohan as fully paid-up for ₹ 24 per share; and
3. 200 shares to Suresh as, fully paid-up for ₹ 10 per share at different intervals of time.

To provide employment to the youth and to develop the Naxal affected backward areas of Chhattisgarh, X Ltd. decided to set-up a power pIant. For raising funds the company decided to issue 7,50,000 equity shares of ₹ 10 each at a premium of 50%. The whole amount was payable on application. Applications for 20,00,000 shares were received.
Applications for 50,000 shares were rejected and shares were allotted to the remaining applicants on pro-rata basis.
Pass necessary Journal entries for the above transactions in the books of the company and identify any two values which X Ltd. wants to propagate.

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.

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.

Write three points of differences between an equity share and a preference share.

A limited company forfeited 400 shares of Mr. X, who had applied for 600 shares on account of non-payment of allotment money ₹ 3 + ₹ 2.50 (premium) and first call ₹ 2. Only ₹ 4 per share was received with application. Out of these, 200 shares were re-issued to Mr. Y at ₹ 8 per share, ₹ 9 paid-up.
Give journal entries relating to forfeiture and re-issue.