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Book Keeping & Accountancy Do as instructed

Company Accounts – Issue of Shares · Maharashtra Board STD 12 Commerce / Arts (MSBSHSE - English Medium). 17 questions.

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17 questions · self-marked practice — reveal the answer and mark yourself.

Question 18 Marks
Dhananjay Electronic Caompany Ltd. Forfeited 500 equity shares of ₹ 10 each on which ₹ 6 per share were received. Show journal entries regarding re-issue of all these shares if -
(a) Shares are re-issued at ₹ 8 per share fully paid-up
(b) Share are re-issued at ₹ 7, ₹ 8 called up
(c) Shares are re-issued at ₹ 5.50, ₹ 7 celled up
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Question 28 Marks
Show Journal Entries in the following cases -
(a) Prashant Trading Company Ltd. Forfeited 100 equity shares of ₹ 100 each due to nonpayment of Final Call of ₹ 30 and the same were re-issued at ₹ 50 per share fully paid.
(b) Swanand Trading Company Ltd. forfeited 1000 equity shares of ₹ 10 each on which application money ₹ 2 and allotment money of ₹ 4 per share was paid. The first call money of ₹ 2 per share remained unpaid. The company re-issued all the forfeited shares @ ₹ 5 per share, ₹ 8 paid-up.
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Question 38 Marks
Archana Ltd. issues 10000 shares of ₹ 10 each at ₹ 12 payable as
₹ → 3 on Application
₹ → 5 on Allotment (with premium)
₹ → 4 on First Final Call
Applications were received for 8000 shares only. Ketan a holder of 400 shares made the full
payment at the time of Allotment.
Record the above transactions in the Books of Archana Ltd
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Question 48 Marks
Girish & Co. Ltd. Invited applications for 25000 equity shares of ₹ 10 each payable as
₹ 2.50 on Application
₹ 5 on Allotment
₹ 2.50 on First & Final call
₹ Applications were received for 30000 equity shares and pro-rata allotment were made to all.
All the money was duly received except First and Final call on 2500 equity shares.
Enter the above transactions in the books of a company and show the Balance sheet.
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Question 58 Marks
XYZ & Company Ltd. issued 4000 shares of ₹ 100 each payable as follows -
₹ 25 on Application
₹ 60 on Allotment
₹ 15 on first and final call
Public applied for 3000 shares. All the money on allotment and call were received.
Give necessary Journal Entries.
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Question 68 Marks
Sanika Company Ltd issued 10000 equity shares to the public of ₹ 10 each. Payable as ₹ 2 on
Application, ₹ 5 on Allotment, and ₹ 3 on 1st and Final Call. All the calls were made and money
received.
Company received applications for 20,000 shares. Directors decided to allot shares to all applicants
on pro-rata basis.
Pass Journal Entries in the Books of Sanika Co. Ltd.
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Question 78 Marks
Vaishali Ltd. Issued 10000 equity shares of ₹ 10 each at par payable ₹ 3 on Application, ₹ 4 on Allotment and ₹ 3 on First and Final call. The company received applications for 15000 shares. The Board of Directors rejected 5000 applications and application money was refunded. All the money was duly received.
Show Journal Entries in the Books of Vaishali Ltd.
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Question 88 Marks
Ankita Ltd. Offered for public 10,000 equity shares of ₹ 10 each at a premium of ₹ 12 per share
payable as under
On Application - ₹ 4
On Allotment - ₹ 4 (including premium)
On First & Final call - Balance amount
Company received all the money. The issue was fully subscribed. Give Journal entries to record the above transactions and also show Balance Sheet.
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Question 98 Marks
Gajanan Ltd. Issued 60,000 equity shares of ₹ 10 each payable as ₹ 2 on Application, ₹ 3 on Allotment, ₹ 3 on First Call, ₹ 2 on final call. The shares subscribed and all the amount due was received.
Pass necessary Journal the book of Gajanan Ltd.
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Question 108 Marks
Pass Journal Entries for the forfeiture and re-issue of shares in the following cases:
(A) Asha Ltd. forfeited 100 equity shares of ₹ 20 each fully called-up for non-payment of the first call of ₹ 3 per share and final call of ₹ 5 per share. 80 shares of these were re-issued at ₹ 15 per share as fully paid.
(B) Bhakti Ltd. forfeited 100 equity shares of ₹ 10 each, ₹ 6 called-upon which the shareholder paid application and allotment of ₹ 5 per share. Of these 80 shares were re-issued as fully paid-up for ₹ 16 per share.
(C) Konark Ltd. forfeited 50 shares of ₹ 10 each, ₹ 8 called-up. The shareholder failed to pay the first call of ₹ 3 per share. Later on, 30 shares of these were re-issued at ₹ 7 per share.
Answer
Journal Entries [For Asha Ltd.]
Image
Working Notes for A:
1. Out of 100 forfeited shares, 80 shares were re-issued accordingly Equity Share Capital A/c is debited and credited.
2. To find the proportionate amount for Forfeiture A/c:
For 100 shares-share forfeiture amount = ₹ 1,200
∴ 80 shares – share forfeiture amount = ₹ 960
Now, out of this ₹ 960 we used ₹ 400 from Share Forfeiture A/c at the time of re-issue of shares.
So, balance of Share Forfeiture A/c = ₹ 960 – ₹ 400 = ₹ 560

Journal Entries [For Bhakti Ltd.]
Image
Working Notes for B:
1. Out of 100 forfeited shares, 80 shares were re-issued accordingly Equity Share Capital $A / C$ is debited for $₹ 600$ and credited for $₹ 480$.
2. The proportionate amount debited to Forfeiture $A / C$ :
For 100 shares-share forfeiture amount debited $=₹ 5001$ Qn $\therefore 80$ shares - share forfeiture amount $=₹ \frac{80}{100} \times \frac{500}{1}=₹ 400$
Now, shares were re-issued at $₹ 6$ per share which is a called-up amount.
$\therefore$ The proportionate amount for Forfeiture $A / C ₹ 400$ will be transferred to Capital Reserve $A / C$.
Journal Entries (For Konark Ltd.)
Image
Working Note for C:
The proportionate amount debited to Forfeiture $A / c$ :
For 50 shares - share forfeiture amount debited is $₹ 250$
$\therefore 30$ shares-share forfeiture amount $=₹ \frac{30}{50} \times 250=₹ 150$
Out of this $₹ 30$ used for re-issue of forfeited shares.
$\therefore$ Balance of Share Forfeiture $A / C=₹ 150-₹ 30=₹ 120$.

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Question 118 Marks
Subhash Company Limited issues 2000 Equity shares of ₹ 100 each payable as ₹ 30 on application, ₹ 30 on the allotment, ₹ 40 on first and final call.
All the shares were subscribed and duly allotted. The company made all the calls. All cash was duly received except the first and final call on 100 equity shares. These shares were forfeited by the company and were re-issued as fully paid for ₹ 75 per share.
Show the Journal Entries in the books of Subhash Company Ltd.
Answer
Journal Entries in the books of Subhash Company Limited
Image
Working Notes:
1. Amount forfeited by the company on 100 shares forfeited = 100 × (30 + 30)
= 100 × 60
= ₹ 6,000

2. Calls-in-Arrears = 100 × 40 = ₹ 4,000.

3. Amount received on re-issue of 100 forfeited shares = 100 × 75 = ₹ 7,500.
Balance of ₹ 2,500 (i.e. loss 25 × 100) is transferred to Share Forfeiture A/c.

4. Amount transfer from Share Forfeiture A/c to Capital Reserve is ascertained by preparing Share Forfeiture A/c.
Image

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Question 128 Marks
Suhas Limited issued 10,000 equity shares of ₹ 10 each at a premium of ₹ 2 per share payable ₹ 3 on application, ₹ 5 (including premium) on the allotment, and the balance in two calls of an equal amount. Applications were received for 11,000 equity shares and pro-rata allotment was made for all the applicants. The excess application money was adjusted towards allotment.
Mrs. Shobha who was allowed 200 equity shares failed to pay F/F/C and her shares were forfeited after the final call.
Show Journal Entries in the books of Suhas Ltd. and also show its presence in Balance
Sheet.
Answer
Journal Entries in the books of Suhas Limited
Image
Working Notes:
1. Excess amount received at the time of application ₹ 3,000 adjusted at allotment stage, so allotment amount received in the bank is ₹ 47,000.

2. Amount called-up per share: ₹ 3 on application, ₹ 5 (including premium) on allotment i.e. ₹ 2 premium + ₹ 3 capital and balance amount ₹ 4 in two calls of the equal amount i.e. ₹ 2 on the first call and ₹ 2 on final call.

3. Mrs. Shobha was not able to pay F/F/C i.e. first and final call means 200 × ₹ 2 first call money = ₹ 400 and 200 × ₹ 2 final call money = ₹ 400.
Mrs. Shobha paid ₹ 6 per share towards capital which the company received and the company has the right to forfeit only paid amount means the company forfeited ₹ 1,200 of Mrs. Shobha.

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Question 138 Marks
Sucheta Company Limited issued ₹ 20,00,000 new capital divided into ₹ 100 equity shares at a premium of ₹ 20 per share payable as ₹ 10 on Application, ₹ 40 on Allotment and ₹ 10 premium ₹ 50 on Final call and ₹ 10 premium.
The issue was oversubscribed to the extent of 26,000 equity shares. The applicants on 2,000 shares were sent a letter of regret and their application money was refunded.
The remaining applicants were allotted shares on a Pro-rata basis. All the money due on Allotment and Final call was only received.
Make necessary Journal Entries in the books of Sucheta Company Ltd.
Answer
Journal Entries in the books of Sucheta Company Limited
Image
Working Note:
Calculation of Application money transferred to Share Allotment:
Application money received (26,000 × 10) = 2,60,000
Less: Application money refunded (2,000 × 10) = 20,000
Less: Application money transferred to Share Capital: (20,000 × 10) = 2,00,000
Excess money received on application transferred to Share Allotment = 40,000
Bifurcation of calls amount:
Image
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Question 148 Marks
Deepak Manufacturing Co. Ltd. issued a prospectus inviting applications for 1,00,000 equity shares of ₹ 10 each payable as follows :
₹ 2 on Application
₹ 4 on Allotment
₹ 2 on the First call
₹ 2 on Final call
The application was received for 1,20,000 equity shares. The Directors decided to reject excess applications and refunded application money on that. The company received all money.
Pass Journal Entries in the books of a company.
Answer
Journal Entries in the books of Deepak Manufacturing Co.Ltd
Image
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Question 158 Marks
Rohini Company Limited issued 25,000 equity shares of ₹ 100 each payable as follows:
On Application ₹ 20
On Allotment ₹ 30
On First call ₹ 20
On the Second & Final call ₹ 30
The application was received for 22,000 equity shares and allotment of shares was made to them. All money was received by the company.
Pass Journal Entries in the books of Rohini Co. Ltd.
Answer
Journal Entries in the books of Rohini Company Limited
Image
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Question 168 Marks
Anand Company Limited issued 1,00,000 preference shares of ₹ 10 each payable as-
On Application ₹ 4
On Allotment ₹ 3
On First call ₹ 2
On Second & Final call?
The company received applications for all these shares and received all money.
Pass Journal Entries in the books of Anand Company Ltd.
Answer
Journal Entries in the books of Anand Company Ltd.
Image
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Question 178 Marks
Vijay Ltd. was registered with an authorized capital of ₹ 15,00,000 divided into 1,50,000 equity shares of ₹ 10 each.
The company issued 1,00,000 equity shares of ₹ 10 each at a premium of ₹ 2 per share. The company received applications for 80,000 equity shares and was allotted the shares.
The company received application money ₹ 3 per share, allotment money ₹ 4 per share
(Including premium) and first, call money ₹ 3 per share.
The Directors have not made the final call of ₹ 2 per share. All money was received except one shareholder holding 500 shares did not pay the first call.
Show Authorised Capital, Issued Capital, Subscribed Capital, Called-up Capital,
Paid-up Capital, Calls in Arrears, and Share Premium amount in the company balance sheet.
Answer
In the books of Vijay Ltd.
Balance Sheet as on ______________
Image

Working Notes:
1. Bank balance at the end = Amount received on application + Amount received on allotment + Amount received on 1st call + Premium amount received
= 80,000 × 3 + 80,000 × 2 × 79,500 × 3 + 80,000 × 2
= 2,40,000 + 1,60,000 + 2,38,500 + 1,60,000
= ₹ 7,98,500

2. Directors have not made the final call of ₹ 2 per share means total called-up amount = ₹ 10 – ₹ 2 = ₹ 8

3. Calls-in-Arrears on 500 shares at ₹ 3 = ₹ 1,500 of the first call

4. Share premium on 80,000 shares @ ₹ 2 received at allotment stage i.e. share premium amount = 80,000 x ₹ 2 = ₹ 1,60,000

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