Issue of shares (Question Bank)

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 Issue of shares 



Which of the following statement is incorrect about Preference Shares?

  1. No Dividend
  2. Right to receive Dividend
  3. Return of capital on winding up of company
  4. Can be converted

 

The subscribed capital of a company is ₹ 80,00,000 and the nominal value of the share is ₹ 100 each. There were no calls in arrear till the final call was made. The final call made was paid on 77,500 shares only. The balance in the calls in arrear amounted to ₹ 62,500. Calculate the final call on share.

  1. ₹ 7
  2. ₹ 20
  3. ₹ 22
  4. ₹ 25

 

Specify the rate of interest to be used on calls in arrear as per the TABLE - F.

  1. 10% p.a.
  2. 16% p.a.
  3. 20% p.a.
  4. 26 % p.a.

 

When shares are forfeited, Share Capital Account is debited with:

  1. nominal value of shares
  2. called-up value of shares
  3. paid-up value of shares
  4. market value of shares

 

Which of the following is not true about a company?

  1. Company is a Natural Person
  2. Company is an Artificial Person
  3. Company has a separate entity
  4. Company has a common seal

 

At the time of forfeiture of shares, with what amount share capital account will be debited, if shares of Rs.20 on which Rs.16 called and Rs.12 is paid and is forfeited?

  1. 16
  2. 20
  3. 12
  4. 08

 

If a company purchases any fixed asset or a running business and makes payment to the vendor in form of issue of shares in place of cash it is called ________.

  1. issue of shares other than cash
  2. issue of shares for cash
  3. private placement of shares
  4. issue of shares in form of assets

 

When shares issued are 10,000 but applied shares are 8,000 then it is a case of:

  1. under subscription
  2. Over-subscription
  3. pro-rata
  4. None of the above

 

________ Shares are issued by a company at discount to its employees or directors for their hard work and dedication towards the company.

  1. Sweat Equity Shares
  2. Bonus Shares
  3. Employees Stock Option Scheme
  4. Preference Shares

 

Balance of forfeiture a/c after the shares have been re-issued is transferred to:

  1. Capital reserve
  2. general reserve
  3. securities premium reserve
  4. None of these

 

Which of the following is not a purpose for which the Securities Premium amount can be used?

  1. Issuing fully paid bonus shares to shareholders
  2. Issuing partly paid-up bonus shares to shareholders
  3. Writing off preliminary expenses of the company
  4. In purchasing its own shares (buy back)

[2020]

 

Which type of shares is not convertible?

  1. Equity Shares
  2. Preference Shares
  3. Redeemable preference shares
  4. Both Preference Shares and Equity Shares

 

If a shareholder does not pay his dues on allotment, for the amount due, there will be a:

  1. Credit balance in the Shares Allotment Account.
  2. Debit balance in the Shares Forfeiture Account.
  3. Credit balance in the Shares Forfeiture Account.
  4. Debit balance in the Shares Allotment Account.

 

That part of capital which is uncalled capital of the company and can be called up only in the event of its winding up of a company is ________.

  1. Reserve capital
  2. Issued capital
  3. Nominal capital
  4. Capital reserve

 

Find out the amount of second & final call When a company issue its shares @ 100 each at a premium of 30%. Payable on Application Rs.40. On Allotment Rs.30. On First Call Rs.20.

  1. Second & final call Rs. 40
  2. Second & final call Rs. 4
  3. Second & final call Rs. 10
  4. Second & final call Rs. 1

 

Under which head Share capital is shown in the balance sheet.

  1. Shareholders’ Funds
  2. Reserves and Surplus
  3. Non-current Assets
  4. Non-current liabilities

 

When will following journal entry be recorded?
Share Applications A/c ... Dr.
To Bank A/c

  1. When Application money is refunded
  2. When Application money is received
  3. When Applicants gives whole amount
  4. When Full amount is received on application

 

At the time of forfeiture of accounts share Capital Account should be debited with:

  1. Called up amount
  2. Face Value
  3. Paid-up amount
  4. Not called up amount

 

First call amount received in advance from the shareholders before it is actually called up by the directors is:

  1. Debited to calls-in-advance account
  2. Credited to share allotment account
  3. Debited to first call account
  4. Credited to calls-in-advance account

[2020]

 

What journal entry will take place at the time of receipt of calls in arrears?

  1. Bank A/c ... Dr.
    To Calls in Arrears A/c
  2. Bank A/c ... Dr.
    To Share Application A/c
  3. Bank A/c ... Dr.
    To Calls in Advance A/c
  4. Calls in arrears A/c ... Dr.
    To Bank A/c

 

Swarna Limited invited applications for subscription of 10,000 Equity shares @ Rs.100 each. Applications were received for 25,000 shares. This situation is called as ________.

  1. Oversubscription of shares
  2. Under subscription of shares
  3. Full Allotment of shares
  4. Prorata allotment

 

What is the formula to be used to calculate the number of shares to be issued to the Vendor?

  1. Purchase ConsiderationIssue Price of a sharePurchase ConsiderationIssue Price of a share
  2. Purchase ConsiderationFacae Value of sharePurchase ConsiderationFacae Value of share
  3. Purchase ConsiderationPremium on sharePurchase ConsiderationPremium on share
  4. Purchase ConsiderationCalled up capitalPurchase ConsiderationCalled up capital

 

What is the alternative name of Authorized share capital?

  1. Nominal Capital
  2. Issued capital
  3. Paid-up capital
  4. Subscribed capital

 

20,000 shares having face value Rs.10. Shares are issued for public subscription at a premium of 10%. The full amount was payable on application. Applications were received for 30,000 shares and pro-rata allotment was made. Find the amount to be adjusted in securities premium?

  1. 20,000
  2. 10,000
  3. 1,00,000
  4. 30,000

 

Which capital should be stated in the Memorandum of Association of a company?

  1. Authorised Capital
  2. Issued Capital
  3. Subscribed capital
  4. Paid-up capital

 

What should be deducted from subscribed share capital while preparing notes to account in the balance sheet.

  1. Calls-in-arrears
  2. Calls-in-advance
  3. Paid-up value of shares
  4. Share Forfeiture A/c

 

RT Ltd. Issued 20,000 Equity shares of ₹10 each at a premium of ₹3 payable as follows: On Application ₹4; On Allotment ₹5 (including premium) On 1st call ₹2; On 2nd Call ₹ 2. Applications were received for 30,000 shares and pro-rata allotment was made to all. Pass necessary Journal entry for the amount due on the allotment:

  1. Share Allotment A/c ... Dr. ... 1,00,000
    To Equity Share Capital A/c ... 40,000
    To Securities premium A/c ... 60,000
  2. Share Allotment A/c ... Dr. ... 1,00,000
    To Equity Share Capital A/c ... 30,000
    To Securities premium A/c ... 70,000
  3. Share Allotment A/c ... Dr. ... 1,00,000
    To Equity Share Capital A/c ... 50,000
    To Securities premium A/c ... 50,000
  4. Share Allotment A/c ... Dr. ... 1,00,000
    To Equity Share Capital A/c ... 60,000
    To Securities premium A/c ... 40,000

 

Premium on issue of shares can be used for:

  1. issue of fully paid bonus shares.
  2. writing off preliminary expenses.
  3. writing off discount/loss on Issue of debentures.
  4. All of these

 

When will following entry takes place during the issue of shares:
Bank A/c ... Dr.
To Share Application A/c

  1. When application money is received
  2. Application money is adjusted
  3. Application money is refunded
  4. Allotment money is received

 

Subscribed capital is:

  1. That part of authorised capital which is issued to the public for subscription.
  2. That part of issued capital which has been actually subscribed by the public.
  3. That part of subscribed capital which has been called up on the shares.
  4. That part of subscribed capital which has not yet been called up on the shares.
  1. Only A
  2. Only B
  3. Only C
  4. Only D

hat part of capital which is uncalled capital of the company and can be called up only in the event of its winding up of a company is ________.

  1. Reserve capital
  2. Issued capital
  3. Nominal capital
  4. Capital reserve

 

The subscribed capital of a company is ₹ 80,00,000 and the nominal value of the share is ₹ 100 each. There were no calls in arrear till the final call was made. The final call made was paid on 77,500 shares only. The balance in the calls in arrear amounted to ₹ 62,500. Calculate the final call on share.

  1. ₹ 7
  2. ₹ 20
  3. ₹ 22
  4. ₹ 25

 

Minimum directors a public company can have compulsorily ________.

  1. 3
  2. 2
  3. 15
  4. 7

 

Specify the rate of interest to be used on calls in arrear as per the TABLE - F.

  1. 10% p.a.
  2. 16% p.a.
  3. 20% p.a.
  4. 26 % p.a.

 

Which of the following is not a purpose for which the Securities Premium amount can be used?

  1. Issuing fully paid bonus shares to shareholders
  2. Issuing partly paid-up bonus shares to shareholders
  3. Writing off preliminary expenses of the company
  4. In purchasing its own shares (buy back)

[2020]

 

Other name for registered capital is:

  1. nominal capital
  2. Issued capital
  3. reserve capital
  4. None of the above.

 

Which of the following statement is incorrect about Preference Shares?

  1. No Dividend
  2. Right to receive Dividend
  3. Return of capital on winding up of company
  4. Can be converted

 

What should be deducted from subscribed share capital while preparing notes to account in the balance sheet.

  1. Calls-in-arrears
  2. Calls-in-advance
  3. Paid-up value of shares
  4. Share Forfeiture A/c

 

What is the correct order of the following items under head share capital in notes to accounts in the balance sheet?

  1. Authorised Capital
  2. Subscribed but not fully paid-up
  3. Issued Capital
  4. Subscribed and Fully paid-up
  1. (A), (C), (D), (B)
  2. (A), (D), (C), (B)
  3. (C), (A), (D), (B)
  4. (C), (C), (D), (A)

 

Which of the following is not true about a company?

  1. Company is a Natural Person
  2. Company is an Artificial Person
  3. Company has a separate entity
  4. Company has a common seal

 

First call amount received in advance from the shareholders before it is actually called up by the directors is:

  1. Debited to calls-in-advance account
  2. Credited to share allotment account
  3. Debited to first call account
  4. Credited to calls-in-advance account

[2020]

 

Deepak Ltd. offered 5,50,000 equity shares of ₹10 each. The public applied for 5,00,000 shares. The call 8 per share) was received except from Gopal, who holds 4,000 shares has not paid after application money of ₹2 per share and from Shyam who holds 1,000 shares has paid only ₹6 per share. Gopal's shares were forfeited. The amount of subscribed capital to be disclosed in the Balance Sheet is:

  1. ₹39,96,000
  2. ₹39,74,000
  3. ₹49,46,000
  4. ₹49,74,000

 

Sumo Ltd. was formed with an authorised Share Capital of ₹40,00,000 divided into 4,00,000 shares of Rs 10 each. The Company offers 130000 shares to the public payable ₹3 per share on Application, ₹3 per share on Allotment and the balance on First and Final Call. Applications were received for 120000 shares. All money payable on the allotment was duly received, except on 200 shares held by Y. First and Final Call was not made by the Company. Call in arrears will be of:

  1. ₹600
  2. ₹400
  3. ₹500
  4. ₹800

 

Agro Ltd. invited application for 20,000 shares of the value of Rs.10 each. The amount is payable as Rs.3 on application and Rs.5 on allotment and balance on First and Final call. Applications were received for 30,000 shares. Find out the amount received on the application.

  1. Bank A/c ... Dr. 90,000
    To Share Application A/c ... 90,000
  2. Share Application A/c ... Dr.  40,000
    To Share Capital A/c ... 40,000
  3. Share Capital A/c ... Dr. 20,000
    To Share ApplicationA/c ... 20,000
  4. Share Capital A/c ... Dr. ... 10,000
    To Share ApplicationA/c ... 10,000

 

X Limited forfeited 1,000 shares of 10 each for the non-payment of the final call of Rs.2 per share. These shares were reissued @ Rs.8 per share fully paid up. Find out the amount of capital reserve.

  1. Capital Reserve ₹6,000
  2. Capital Reserve ₹4,000
  3. Capital Reserve ₹10,000
  4. Capital Reserve ₹8,000

 

Where shares can be sold by a company?

  1. Stock Exchange
  2. Media
  3. Only Newspapers
  4. RBI

 

What is the nature of the amount of discount which arises when a company issues shares at discount?

  1. Capital loss
  2. Capital receipt
  3. Revenue Expense
  4. Revenue receipt

 

Nominal share capital is:

  1. That part of authorised capital which is issued by the company.
  2. The amount of capital which is actually applied by prospective shareholders.
  3. The amount of capital which is paid by the shareholders.
  4. The maximum amount of share capital that a company is authorised to issue.
  1. Only A
  2. Only B
  3. Only C
  4. Only D

[2020]

 

Among following which statement is not true about a private company?

  1. Minimum paid-up capital is 5,00,000
  2. The private company ends with the words ‘Private Limited’.
  3. Atleast 2 directors 
  4. Restriction on the right to transfer its shares

 

When shares issued are 10,000 but applied shares are 8,000 then it is a case of:

  1. under subscription
  2. Over-subscription
  3. pro-rata
  4. None of the above

 

Which type of shares is not convertible?

  1. Equity Shares
  2. Preference Shares
  3. Redeemable preference shares
  4. Both Preference Shares and Equity Shares

 

What is the alternative name of Authorized share capital?

  1. Nominal Capital
  2. Issued capital
  3. Paid-up capital
  4. Subscribed capital

 

Is there any limit of Securities Premium on the issue of shares. If yes then what is the limit.

  1. Unlimited
  2. 10%
  3. 25%
  4. 20%

 

In case of private placement of shares to raise the amount of capital, a company:

  1.  Does not invite the public
  2. Invites the public through prospectus
  3. Invite the public through advertisement
  4. None of the above

 

At the time of forfeiture of accounts share Capital Account should be debited with:

  1. Called up amount
  2. Face Value
  3. Paid-up amount
  4. Not called up amount

 

Reissue of forfeited shares can be done at ________.

  1. Par, premium or discount
  2. Par and premium only
  3. Par and discount only
  4. Only at par

 

Which capital should be stated in the Memorandum of Association of a company?

  1. Authorised Capital
  2. Issued Capital
  3. Subscribed capital
  4. Paid-up capital

 

Pass necessary journal entry for reissue of forfeited shares at discount.

  1. Bank A/c ... Dr.
    Share Forfeiture A/c ... Dr.
    To Share Capital A/c
  2. Bank A/c ... Dr.
    Share Capital A/c ... Dr.
    To Share Forfeited A/c
  3. Bank A/c ... Dr.
    To Share Capital A/c
  4. Share Capital A/c ... Dr.
    Share Forfeited A/c ... Dr.
    To Bank A/c

 

Premium on issue of shares can be used for:

  1. issue of fully paid bonus shares.
  2. writing off preliminary expenses.
  3. writing off discount/loss on Issue of debentures.
  4. All of these

 

Pragya Ltd. forfeited 8,000 equity shares of ₹100 each issued at a premium of 10% for non-payment of first and final call of ₹30 per share. The maximum amount of discount at which these shares can be reissued will be:

  1. ₹80,000
  2. ₹3,20,000
  3. ₹5,60,000
  4. ₹2,40,000

 

                      

Mohan Limited forfeited the following Equity Shares of Rs. 10 each issued at a premium of Rs. 2 per share:

  1. 700 shares issued to X for the non-payment of second and final call of Rs. 3 per share.
  2. 500 shares issued to Z for the non-payment of the first call of Rs. 2 per share and second and final call of Rs. 3 per share.

The forfeited shares were reissued to Y for Rs. 11 per share fully paid. Pass entries to record the forfeiture and reissue of shares.

[2006]

 

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.

 

A limited company forfeited 300 shares of Mr. X who had applied for 500 shares on account of non-payment of allotment money ₹3 + 2 (premium) and first call ₹2. Only ₹3 per share was received with application. Out of these, 200 shares were re-issued to Mr. Y as fully paid in such a way that ₹600 were transferred to capital reserve.
Give journal entries relating to forfeiture and re-issue.

 

Alfa Ltd. issued 5,000 shares of ₹ 100 each at par. The amount payable was as under:
₹ 25 on application;
₹ 25 on allotment;
₹ 20 on first call; and
₹ 30 on final call.
The company did not make final call. A, a holder of 100 shares, failed to pay allotment and first call money. Directors forfeited his shares and immediately re-issued the forfeited shares at ₹ 6,500.
Pass Journal entries in the books of the company and show the Share Capital in the Balance Sheet.

 

Pass journal entries for the following:

  1. X Ltd. purchased Land and Building from R. Sundram for ₹ 5,00,000 payable in fully paid shares of ₹ 100 each at a premium of 25%.
  2. Y Ltd. decided to issue 2,000 shares of ₹ 100 each to the Unit Trust of India as underwriting commission.

 

To provide employment to the youth and to develop the Naxal affected backward areas of Chattisgarh, X Ltd, decided to set-up a power plant. For raising funds the company decided to issue 7,50,000 equity shares of Rs. 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 alloted 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.

[2016]

 

Ankit Ltd. issued 20,000 equity shares of 10 each at a premium of ₹ 2 per share, payable as:
On Application : ₹ 3
On Allotment : ₹ 5 (including premium)
On First Call : ₹ 2
On Second and Final Call : ₹ 2

Vijay was allotted 500 shares. Pass the necessary Journal entries relating to the forfeiture of shares in following cases.

Case I : Vijay did not pay allotment money and his shares were immediately forfeited.
Case II : Vijay did not pay allotment and first call, his shares were forfeited after first call.
Case III : Vijay failed to pay first call and his shares were forfeited immediately.
Case IV : Vijay failed to pay both the calls and his shares were forfeited.

 

Distinguish between Equity Share and Preference Share.

[2018]

 

Black Stone Ltd. issued 10,000 Equity Shares of ₹ 10 each at a premium of ₹ 3 per share payable ₹ 5 on application, ₹ 5 (including premium) on allotment and the balance on first call. All the shares offered were applied for and allotted. All the money due on allotment was received except on 200 shares. Call was made. All the amount due thereon was received except on 300 shares. Directors forfeited 200 shares on which both allotment and call money were not received.
Pass necessary Journal entries to record the above.

 

Sico Ltd. took over the assets of ₹4,80,000 and liabilities of ₹80,000 of Mittal Ltd. for a consideration of ₹3,20,000; ₹20,000 were paid by an acceptance in favour of Mittal Ltd. payable after 3 months and the balance by the issue of fully paid 8% Preference Shares of ₹ 100 each at a premium of 50%. Pass the necessary journal entries for the above transactions in the books of Sico Ltd.

 

DSC Power Ltd. Offered to public on 1st April, 2019, 1,00,000 Equity Shares and 50,000 Preference Shares of ₹ 10 each payable as under:

 

Equity Shares (₹)

Preference Shares (₹)

On application

3

3

On allotment (1st May)

3

4

On first and final call (1st September)

4

3

Subscription was received for 1,20,000 Equity Shares and 45,000 Preference Shares. Applications for Preference Shares were accepted in full. Out of applications for Equity Shares, applications for 10,000 shares were rejected, applications for 85,000 shares accepted in full and 15,000 shares were allotted to the remaining applicants.
All amounts were received except the amount due on call on 1,000 Equity Shares and 500 Preference Shares. Pass entries in the Cash Book and Journal.

 

Ram holding 10 shares of Rs. 10 each. He paid Rs. 2 on application and Rs. 3 on allotment but could not pay Rs. 3 on first call. His shares were forfeited by the Directors. The Final call is not made as yet. Give Journal entries in the book of company.

 

V Ltd. Issued 20,000 Equity shares of Rs. 10 each at a premium of Rs. 3 payable as follows:
On Application Rs. 4
On Allotment Rs. 5 (including Premium)
On First Cell Rs. 2
On Final Call Rs. 2
All shares were duly subscribed and all money duly received. Pass necessary Journal Entries.

 

Z Ltd. was registered with an authorised capital of ₹ 10,00,000 divided into 10,000 shares of ₹ 100 each. The Company offered 5,000 of these shares to the public, which were payable ₹25 per share on application, ₹ 50 per share on allotment and the balance three months later. Applications for 7,100 shares were received on which the directors allotted as follows:

Applications for 4,000 Shares

Full

Applications for 3,000 Shares

1,000

Applications for 100 Shares

Nil

₹ 1,85,000 was realised on account of allotment money (excluding the amount carried from application money) and ₹ 1,15,000 on account of call. The Directors decided to forfeit those shares on which allotment money was overdue.
Show the entries in the company’s books.

 

Navnirman Ltd. issued 4,00,000 equity shares of ₹ 10 each at par. The amount per share was payable as follows:
₹ 3 on application; ₹ 2 on allotment; ₹ 2 on first call and ₹ 3 on final call. The issue was fully subscribed and the shares were allotted fully to all the applicants. All calls were made Mahi, a shareholder holding 6,000 shares paid the final call money along with the first call. Shrey holding 700 shares did not pay the first call on the due date. Shrey paid the first call along with the final call. The accountant of the company had correctly passed the entries till receipt of allotment money. After that the following entries were left incomplete by him. Complete these entries.

Date

Particulars

 

L.F.

Dr.

Cr.

2015

 

 

 

₹

₹

 

Equity share first call A/c

Dr.

 

8,00,000

 

 

To ?
(First call due on 4,00,000 shares @ ₹ 2 per share)

 

 

 

8,00,000

 

Bank A/c

Dr.

 

?

 

 

?

Dr.

 

?

 

 

To Equity Share first call A/c

 

 

 

?

 

To ?
(?)

 

 

 

?

 

Equity Share second and final call A/c

Dr.

 

?

 

 

To Equity Share Capital A/c
(Final call due on 4,00,000 shares @ ₹ 3 per share)

 

 

 

?

 

Bank A/c

Dr.

 

?

 

 

?

Dr.

 

?

 

 

To Equity Share second and final call A/c

 

 

 

?

 

To ?
(?)

 

 

 

?

[2018]

 

U.P. Sugar Works Ltd. was registered on 1st January, 2019 with an authorised capital of ₹ 15,00,000 divided into 15,000 shares of ₹ 100 each. The company issued on 1st April, 2019, 5,000 shares of ₹ 100 each at a premium of ₹ 5 per share payable ₹ 25 per share on application, ₹ 30 (including premium) on allotment and the balance in two equal installments of ₹ 25 each on 1st July and 1st October respectively. All the allotments and call moneys were paid when due, except in case of one shareholder who failed to pay the final call on 100 shares held by him. His shares were forfeited on 1st November after giving him a due notice. Show necessary entries in the books of the company to record these transactions.

 

AB Ltd. invited applications for 1,00,000 Equity Shares ₹ 10 each payable as ₹ 2 application, ₹ 3 on Allotment and the balance on first and final call. Application were received for 3,00,000 shares and shares were allotted on pro rate basis. The excess application money was to be adjusted against allotment only. M, a shareholder who has applied for 3,000 shares failed to pay the call money and his shares were forfeited and re-issued at ₹ 8 per share as fully paid.
Pass necessary journal entries in the books of company.

 

S.S.C. Ltd. has a paid-up share capital of ₹ 60,00,000 and a balance of ₹ 15,00,000 in the Securities Premium Account. The company management does not want to carry over the balance. State the purposes for which the balance can be utilised.

 

Give journal entries to record the following transaction of forfeiture and reissue of shares and open share forfeiture account.
L Ltd forfeited 470 equity shares of ₹ 10 each issued at premium of ₹ 5 per share for non-payment of allotment money ₹ 8 per share (including share premium ₹ 5 per share) and the first and final call of ₹ 5 per share. Out of these, 60 equity shares were subsequently reissued @ ₹ 14 per shares.

[2011]

 

A company issued 15,000 fully paid up equity shares of Rs. 100 each for the purchases of the following assets and liabilities from Gupta Bros.
Plant – Rs. 3,50,000; Stock Rs. 4,50,000
Land and Building Rs. 6,00,000; Sundry Creditors Rs. 1,00,000
Pass necessary Journal entries.

 

Shipra Limited invited applications for 80,000 shares of ₹ 10 each payable as follows:

₹2.50 on Application

(on 1st May, 2015);

₹2.50 on Allotment

(on 1st June, 2015);

₹2 on First Call

(on 1st Nov, 2015); and

₹3 on Second Call

(on 1st Feb, 2016)

All the shares were applied and allotted. Shankar, holding 600 shares paid the whole of the amount along with allotment.
Pass Cash Book and Journal entries assuming that books are closed on 31 st March every year.

 

X Ltd. was formed with a capital of ₹ 15,00,000 divided into equity shares of ₹ 10 each. Out of these 6,000 shares were issued to the vendors as fully paid as purchase consideration for a building acquired and 3,000 shares were issued to signatories to the Memorandum of Association as fully paid. The Directors offered 19,500 shares to the public and called up ₹ 6 per share and received the entire called up the amount on shares allotted. Prepare a Balance Sheet showing Share Capital as per Schedule III Part I of Companies Act, 2013 from the above transactions in the books of X Ltd.

 

X Ltd. issued 60,000 shares of 10 each, at a maximum discount permitted by the Companies Act, payable as follows:
on the application: Rs. 4 per share,
on allotment: Rs. 3 per share
and on final call: the balance.
All money was duly received except final call on 1,000 shares. Pass necessary Journal entries in the books of the company.

[2007]

 

  1. Virender Limited forfeited 400 shares of ₹100 each (₹60 called-up) issued at par to Mukesh on which he had paid ₹25 per share. Out of these, 300 shares were re-issued to Sanjeev as ₹60 paid-up for ₹45 per share. Pass entries for forfeiture and re-issue of shares.
  2. The Directors of Devendra Ltd. resolved on 1st April, 2016 that 1,000 equity shares of ₹10 each, ₹8 per share called-up be forfeited for non-payment of first call of ₹2 per share. On 1st May, 2016, 600 of these shares were re-issued at ₹7 per share fully paid-up. Pass entries for forfeiture and re-issue of shares.

 

Sandesh Ltd took over the assets of ₹ 7,00,000 and liabilities of ₹ 2,00,000 from Sanchar Ltd for a purchase consideration of ₹ 4,59,500, ₹ 8,500 were paid by accepting a draft in favour of Sanchar Ltd. payable after three months and the balance was paid by issue of equity shares of ₹ 10 each at a premium of 10% in favour of Sanchar Ltd.
Pass necessary journal entries for the above transactions in the books of Sandesh Ltd.

[2016]

 

Tagore Ltd. purchased a running business from Tulsi Bros. for a sum of ₹ 48,00,000 payable by the issue of fully paid equity shares of ₹ 20 each at a premium of 20%. The assets and liabilities consisted of the following:

 

₹

Plant and Machinery

25,00,000

Stock

15,00,000

Sundry Debtors

8,60,000

Sundry Creditors

3,00,000

Pass the necessary journal entries in the books of Tagore Ltd.

 

A Ltd. forfeited 400 shares of Mr. X who had applied for 600 shares on account of non-payment of allotment, first call and final call. Shares were issued at ₹ 2 premium payable as follows:
On Application ₹ 3, on Allotment ₹ 3 + 2, on First call ₹ 2 and Final Call ₹ 2. Out of these, 300 shares were re-issued to Mr. Y at the rate of ₹ 12 per share as fully paid shares. Give journal entries in the books of company to record above transactions.

 

Atlas Co. Ltd. Purchased a machine from HMT Co. for Rs 64,000. It was decided to pay Rs. 10,000 in cash and balance will be paid by issue of shares of Rs. 10 each,

Pass journal entries shares

  1. Issued at par
  2. Issued at premium of 20%

 

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.

[2011]

 

Akash Ltd is registered with an authorised capital of Rs. 8,00,00,000 divided into equity shares of Rs. 10 each. Subscribed and fully paid up share capital of the company was Rs. 4,00,00,000. For providing employment to the local youth and for the development of the rural areas of the Jammu and Kashmir State, the company decided to set up a food processing unit in Anantnag district. The company also decided to open skill development centres in Ladakh, Srinagar and Punch. To meet its new financial requirements the company decided to issue 1,00,000 equity shares of Rs. 10 each and 10,000, 9% debentures of Rs. 100 each. The debentures were redeemable after five years. The issue of equity shares and debentures was fully subscribed. A shareholder holding 1,000 shares failed to pay the final call of Rs. 2 per share. Present the share capital in the balance sheet of the company as per the provisions of Schedule III of the Companies Act, 2013. Also, identify any two values that the company wishes to propagate.

[2017]

 

                                                   6 marks

D Ltd. offered to the public 20,000 shares of ₹ 100 each at a premium of ₹ 20 per share payable as follows:

 

₹

On Application

30

On Allotment

40 (including premium)

On First Call

25, and

On Final Call

25

Issue was over-subscribed and pro-rata allotment was made to all applicants.
Final Call was not made and a shareholder holding - shares to whom allotment was made on pro-rata basis failed to pay the allotment and first call money.
His shares were forfeited and were re-issued at - per share as ₹ 75 paid-up.
You are required to fill in the missing figures in the Cash Book and Journal of the Company.

CASH BOOK

Particulars

₹

Particulars

₹

To Share Application A/c (- ×× ₹ 30)

7,50,000

By Balance c/d

-

To Share Allotment A/c

6,24,000

 

 

To Share First Call A/c

?

 

 

To Share Capital A/c

?

 

 

 

?

 

?

JOURNAL

Date

Particulars

 

L.F.

Dr.

Cr.

 

 

 

 

₹

₹

 

Share Application A/c

Dr.

 

?

 

 

To Share Captial A/c

 

 

 

?

 

To Share Allotment A/c
(Transfer of application money)

 

 

 

?

 

Share Allotment A/c

Dr.

 

?

 

 

To Share Capital A/c

 

 

 

?

 

To Securities Premium A/c
(Allotment money due on - shares @ ₹ - per share including premium of ₹ - per share)

 

 

 

?

 

Share First Call A/c

Dr.

 

?

 

 

To Share Capital A/c
(First Call due on - shares @ ₹ - per share)

 

 

 

?

 

Share Capital A/c

Dr.

 

?

 

 

Securities Premium A/c

Dr.

 

?

 

 

To Share Allotment A/c

 

 

 

?

 

To Share First Call A/c

 

 

 

?

 

To Share Forfeiture A/c
(- shares forfeited for non-payment of Allotment and First Call)

 

 

 

30,000

 

Share Forfeiture A/c

Dr.

 

?

 

 

To Share Capital A/c
(Forfeited shares reissued at ₹ - per share as ₹ - paid-up)

 

 

 

?

 

Share Forfeiture A/c

Dr.

 

26,000

 

 

To Capital Reserve A/c
(Profit on - reissued shares transferred to Capital Reserve A/c)

 

 

 

26,000

 

Star Ltd was registered with a capital of ₹ 5,00,000 in shares of ₹ 10 each and issued 20,000 such shares at a premium of ₹ 2 per share, payable as ₹ 2 per share on application, ₹ 5 per share on allotment (including premium) and ₹ 2 per share on first call made three months later. All the money payable on application and allotment was duly received but when the first call was made, one shareholder paid the entire balance on his holding of 300 shares and another shareholder holding 1,000 shares failed to pay the first call money.
Pass journal entries to record the above transactions and show how they will appear in the company's Balance Sheet.

 

Super Star Ltd. issued a prospectus inviting applications for 2,000 shares of ₹ 10 each at a premium of ₹ 2 per share, payable as:

On application

-

₹ 3 per share (including ₹ 1 premium),

On allotment

-

₹ 4 per share (including ₹ 1 premium),

On first call

-

₹ 3 per share

On second and final call

-

₹ 2 per share.

Applications were received for 3,000 shares and pro rata allotment was made on the applications for 2,400 shares . It was decided to utilise excess application money towards the amount due on allotment .
Ramesh, to whom 40 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited.
Rajesh, who applied for 72 shares failed to pay the two calls and on such failure, his shares were forfeited .
Of the shares forfeited, 80 shares were sold to Krishan credited as fully paid-up for ₹ 9 per share, the whole of Ramesh's shares being included.
Give journal entries to record the above transactions (including cash transactions).

 

New Company Ltd. has a nominal capital of ₹ 2,50,000 in shares of ₹ 10. Of these, 4,000 shares were issued as fully paid in payment of building purchased, 8,000 shares were subscribed by the public and during the first year ₹ 5 per share were called-up, payable ₹ 2 on the application, ₹ 1 on the allotment, ₹ 1 on the first call and ₹ 1 on the second call. The amounts received in respect of these shares were:

On 6,000 shares

Full amount called

On 1,250 shares

₹ 4 per share

On 500 shares

₹ 3 per share

On 250 shares

₹ 2 per share

The Directors forfeited the 750 shares on which less than ₹ 4 had been paid. The shares were subsequently reissued at ₹ 3 per share.
Pass journal entries recording the above transactions and prepare the company's Balance Sheet.

 

X Ltd. invited applications for 50,000 Equity Shares of ₹ 10 each, payable ₹ 3.50 on application; ₹ 5 on allotment (including premium ₹ 2.50); and ₹ 4 on first and final call.
The company received applications for 65,000 shares. It was decided:

  1. to refuse allotment to the applicants for 5,000 shares;
  2. to allot in full to the applicants for 20,000 shares;
  3. to allot balance of the available shares pro-rata among the other applicants; and
  4. to utilise the excess application money in part payment of allotment money.

All the money due was received except from one applicant to whom shares had been allotted on pro-rata basis. He failed to pay allotment and call money and his 300 shares were forfeited. These shares were re-issued at ₹ 9 as fully paid. Give journal entries to record the above transactions in the books of the company.

 

AT Ltd. invited applications for issuing 50,000 equity shares of ₹ 10 each. The amount was payable as follows :

On Application

₹ 3 per share

On Allotment 

₹ 4 per share

On First and Final Call

₹ 3 per share

Applications were received for 75,000 shares and pro-rata allotment was made as follows:
Applicants for 40,000 shares were allotted 30,000 shares on pro-rata basis.
Applicants for 35,000 shares were allotted 20,000 shares on pro-rata basis.
Ramu, to whom 1,200 shares were allotted out of the group applying for 40,000 shares failed to pay the allotment money. His shares were forfeited immediately after allotment.
Shamu, who had applied for 700 shares out of the group applying for 35,000 shares failed to pay the first and final call. His shares were also forfeited. Out of the forfeited shares 1,000 shares were re-issued @ ?8 per share fully paid up. The re-issued shares included all the forfeited shares of Shamu.
Pass necessary journal entries to record the above transactions.

 

Jeevan Dhara Ltd invited applications for issuing 1,20,000 equity shares of ₹ 10 each at a premium of ₹ 2 per share. The amount was payable as follows
On application - ₹ 2 per share
On allotment - ₹ 5 per share (including premium)
On first and final call - Balance
Applications for 1,50,000 shares were received. Shares were allotted to all the applicants on pro-rata basis. Excess money received on applications was adjusted towards sums due on allotment. All calls were made. Manu who had applied for 3,000 shares failed to pay the amount due on allotment and first and final call. Madhur who was allotted 2,400 shares failed to pay the first and final call. Shares of both Manu and Madhur were forfeited. The forfeited shares were reissued at ₹ 9 per share as fully paid-up.
Pass necessary journal entries for the above transactions in the books of Jeevan Dhara Ltd.

[2015]

 

On February 1, 2018, the Directors of Alpha Limited issued 5,00,000 Equity Shares of ₹10 each at ₹12 per share, payable ₹5 on application (including premium), ₹4 on allotment and the balance on 1st May, 2018.
The lists closed on February 10, 2018 by which date applications for 7,00,000 shares were received. Of the cash received, ₹4,00,000 was returned and ₹ 6,00,000 was applied to the amount due on allotment, the balance of which was paid on February 16, 2018.
All shareholders paid the call due on May 1, 2018 with the exception of one allottee of 500 shares. These shares were forfeited on September 29, 2018 and reissued as fully paid at ₹ 8 per share on November 1, 2018.
Record journal entries in the books of Alpha Limited using a combined account of application and allotment.

 

X Ltd. issued for Public subscription 1,00,000 equity shares of ₹ 10 each at a premium of ₹ 5 per share payable as under:
On Application ₹ 5
On Allotment ₹ 7 (including premium ₹ 5)
On First & Final Call ₹ 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 utilised 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 ₹ 8 per share. Show the journal entries to record the above transactions.

 

Give journal entries for forfeiture and re-issue of shares:

  1. A Ltd. forfeited 1,000 shares of ₹ 10 each, ₹ 7 called up, issued at a premium of 20 % (to be paid at the time of allotment) for non-payment of a first call of ₹ 2 per share. Out of these, 600 shares were re-issued as ₹ 7 paid up for ₹ 4 per share.
  2. B Ltd. forfeited 1,000 shares of ₹ 10 each, ₹ 7 called up, issued at a premium of 20 % (to be paid at the time of allotment) for non-payment of allotment money of ₹ 4 per share (including premium) and first call of ₹ 2 per share. Out of these, 600 shares were re-issued as fully paid in such a way that ₹ 900 were transferred to capital reserve.

[2020]

 

K.N. Ltd. invited applications for issuing 6,00,000 equity shares of ₹10 each at a premium of ₹3 per share. The amount was payable as follows: 

On Application and Allotment

₹3 per share.

On First Call

₹4 per share.

On Second and Final Call

Balance (including premium).

Applications for 8,00,000 shares were received. Applications for 50,000 shares were rejected and the application money was refunded. Shares were allotted to the remaining applicants as follows:
Category I: Those who had applied for 4,00,000 share were allotted 3,00,000 shares on pro-rata basis.
Category II: The remaining applicants were allotted the remaining shares on pro-rata basis. Excess application money received with applications was adjusted towards sums due on first call. Rakesh to whom 6,000 shares were allotted failed to pay the first call money. Rakesh belonged to category I. His shares were forfeited. The forfeited shares were re-issued at ₹13 per share fully paid up. The second call was made afterwards and was duly received.
Pass necessary journal entries for the above transactions in the books of K.N. Ltd.

[2020]

 

Karur Ltd. invited applications for issuing 2,40,000 equity shares of ₹ 10 each at a premium of ₹ 4 per share. The amount was payable as under:

On application

₹ 4 per share (including premium ₹ 2)

On allotment

₹ 4 per share

On first and final call

₹ 6 per share (including premium ₹ 2)

Applications for 3,00,000 shares were received and pro-rata allotment was made to all the applicants. Excess application money received on application was adjusted towards sums due on allotment. All calls were made and were duly received except from Rohini, who failed to pay allotment and first and final call on 7,500 shares applied by her. These shares were forfeited. Afterwards, 40% of the forfeited shares were re-issued at ₹ 11 per share as fully paid-up.
Pass the necessary journal entries in the books of Karur Ltd. Open call-in-arrears and call-in-advance accounts wherever necessary.

[2020]

 

Telecom Ltd.' issued 20,000 Equity Shares of ₹ 10 each at a premium of ₹ 5 per share, payable as:
₹ 7 (including premium) on application, ₹ 5 on allotment and the balance after three months of allotment. A shareholder to whom 200 shares were allotted failed to pay the allotment and call money and his shares were forfeited. 160 of the forfeited shares were reissued for ₹ 1,600.
Give necessary entries in company's Journal and the Balance Sheet.

 

X Ltd. issued 8,000 shares of ₹ 100 each at a premium of ₹40 per share. Amount was payable as follows:

 

₹

 

On application 

20

(including premium ₹ 10 per share)

On allotment 

50

(including premium ₹30 per share)

On first call 

30

 

On second & final call 

40

 

Applications were received for 7,500 shares and all were accepted. All money was received except

  1. Ashwin, holding 100 shares failed to pay allotment money and his shares were
  2. forfeited after allotment.
  3.  Monika, holding 200 shares failed to pay first call money and her shares were forfeited after first call.
  4. Ruchi, holding 300 shares failed to pay first and second call money and her shares were forfeited.

All the forfeited shares were reissued at a discount of 5% as fully paid-up. 

 

Concept Stationary Ltd. invited applications for issuing 3,00,000 shares of ₹ 10 each at a premium of ₹ 3 per share. The amounts were payable as follows :
On application and allotment – ₹ 7 per share.
On first & final call – balance (including premium of ₹ 3)
Applications were received for 4,00,000 shares & allotment was made as follows :

  1. To applicants for 80,000 shares – 80,000 shares.
  2. To applicants for 40,000 shares – nil
  3. Balance of the applicants were allotted shares on pro-rata basis.

Excess money received with applications was adjusted towards sums due on first and final call.
Amit, who belonged to category (i) and was allotted 4,000 shares and Veni, who belonged to category (iii) and was allotted 4,400 shares failed to pay the first and final call money. Their shares were forfeited. The forfeited shares were re-issued at ₹ 7 per share fully paid-up.
Pass necessary journal entries for the above transactions in the books of the company

[2020]

 

‘BMY Ltd’ invited applications for issuing 1,00,000 equity shares of ₹ 10 each at a premium of ₹ 10 per share. The amount was payable as follows
On application - ₹ 10 per share (including ₹ 5 premium)
On allotment - The balance
The issue was fully subscribed. A shareholder holding 300 shares paid the full share money with application. Another shareholder holding 200 shares failed to pay the allotment money. His shares were forfeited. Later on these shares were reissued for ₹ 4,000 as fully paid-up.
Pass necessary journal entries for the above transactions m the books of BMY Ltd.

[2015]

 

Konark Ltd. invited applications for issuing 3,00,000 shares of ₹10 each. The amount per share was payable as follows: ₹3 on application, ₹3 on allotment, and ₹4 on first and final call. The company received applications for 4,00,000 shares. Allotment was done as follows:

  1. Applicants of 2,40,000 shares were allotted 2,00,000 shares.
  2. Applicants of 1,20,000 shares were allotted 80,000 shares.
  3. Remaining applicants were allotted 20,000 shares.

Money overpaid on applications was adjusted towards sums due on allotment. Divij, a shareholder, belonging to group (ii), who had applied for 6,000 shares, failed to pay allotment and call money. Faisal, another shareholder, who was allotted 10,000 shares, paid the call money along with allotment. Faisal belonged to group (i).
Divij’s shares were forfeited after the first and final call. Half of the forfeited shares were reissued @ ₹10 per share fully paid. Pass the necessary journal entries to record the above transactions in the books of the company.

[2020]

 

Spencer Paints Ltd. was registered with an authorised capital of ₹ 50,00,000 divided in 5,00,000 equity shares of ₹ 10 each. Company issued 2,00,000 equity shares at a premium of ₹ 3 per share, payable as follows: ₹ 4 on Application; ₹ 5 on Allotment (including premium); ₹ 2 on First Call and ₹ 2 on Second and Final Call. All shares were subscribed and all the money was duly received. Share issue expenses amounted to ₹ 75,000 which were fully written off against Securities Premium. Prepare necessary Journal Entries and Bank Account.

 

AXN Ltd invited applications for issuing 1,00,000 equity shares of ₹ 10 each at a premium of ₹ 6 per share. The amount was payable as follows:
On application - ₹ 4 per share (including ₹ 2 premium);
On allotment - ₹ 5 per share (including ₹ 2 premium);
On first call - ₹ 4 per share (including ₹ 2 premium); and
On second and final call - Balance amount
The issue was fully subscribed.
Kumar, the holder of 400 shares did not pay the allotment money and Ravi, the holder of 1,000 shares paid his entire share money along with allotment money. Kumar’s shares were forfeited immediately after allotment. Afterwards first call was made. Gupta, a holder of 300 shares failed to pay the first call money and Gopal, a holder of 600 shares paid the second call money also along with first call. Gupta’s shares were forfeited immediately after the first call. Second and final call was made afterwards. The whole amount due on second call was received. All the forfeited shares were re-issued at ₹ 9 per share fully paid up.
Pass necessary journal entries for the above transactions in the books of the company.

 

RK Ltd invited applications for issuing 80,000 equity shares of Rs. 10 each at a premium of Rs. 35 per share. The amount was payable as follows
On application — Rs. 8 (including Rs. 5 premium) per share
On allotment — 12 (including Rs. 10 premium) per share
On first and final call — Balance
Applications for 75,000 shares were received and allotment was made to all the applicants Rahim, a shareholder who was allotted 3,000 shares failed to pay allotment money and his shares were immediately forfeited.
Afterwards, the first and final call was made. Suhani who held 3,000 shares failed to pay the final call. Her shares were also forfeited. All the forfeited shares were reissued for a sum of Rs. 62,000 as fully paid up. Pass necessary journal entries for the above transactions in the books of RK Ltd.

[2016]

 

A limited Company was registered with an authorised capital of ₹ 2,00,000 in ₹ 10 shares, of these 6,000 shares were issued as fully paid to the vendors for the purchase of buildings. 8,000 shares were subscribed for by the public and during the first year ₹6 per share were called up, payable ₹3 on application, ₹1 on allotment, ₹ 1 on first call, and ₹ 1 on second call. The amounts received in respect of these shares were as follows :
On 6,000 shares the full amount called.
On 1,200 shares ₹ 5 per share.
On 500 shares ₹ 4 per share.
On 300 shares ₹ 3 per share.
The directors forfeited 800 shares on which less than ₹ 5 per share had been paid. Show journal entries in the books of the company and also show the Share Capital, as it would appear in the Balance Sheet.

 

On 1st April 2019, Sangita Ltd. issued 30,000 Equity Shares of ₹ 10 each at a premium of ₹ 4 per share, payable as follows:
₹ 6 on application (including ₹ 1 premium),
₹ 2 on the allotment (including ₹ 1 premium),
₹ 3 on the first call (including ₹ 1 premium ), and
₹ 3 on second and final call (including ₹ 1 premium).
Applications were received for 45,000 shares, of which applications for 9,000 shares were rejected and their money was refunded. The rest of the applicants were issued shares on pro-rata basis and their excess money was adjusted towards allotment.
Hari, to whom 600 shares were allotted, failed to pay the allotment money and his shares were forfeited after allotment. Mohan, who applied for 1,080 shares failed to pay the two calls and on his such failure, his shares were forfeited.
1,200 forfeited shares were reissued as fully paid-up on receipt of ₹ 9 per share, the whole of Mohan's shares being included.
Prepare Cash Book and Pass necessary Journal entries. Also, show share capital in the Balance Sheet of the company.

 

Fast Food Ltd. issued a prospectus offering 10,000 equity shares of ₹50 each at par payable as follows:

 

₹

On Application

15

On Allotment

10

On First Call

15

On Final Call

10

Ram, the holder of 500 equity shares did not pay the amount due on both the calls. These 500 shares were forfeited by the Board of Directors and 300 of these shares were subsequently re-issued at ₹ 55 per share.
Show the entries in the Cash Book and Journal of the Company.

 

Zee Ltd. invited applications for issuing 3,40,000 equity shares of ₹10 each at a premium of ₹5 per share. The amount was payable as follows:
On application ₹4 per share (including ₹2 premium)
On allotment ₹5 per share (including ₹2 premium)
On First and Final call - Balance.
Applications for 6,00,000 shares were received. Application for 1,80,000 shares were rejected and application money was refunded. Shares were allotted on prorata basis to the remaining applicants. Excess money received with applications was adjusted towards sum due on allotment. Yamini who had applied for 2100 shares failed to pay allotment money and her shares were forfeited immediately. Vani to whom 6800 shares were allotted paid her entire share money due on allotment. Afterwards First and Final call was made and was duly received. Out of the forfeited shares 850 shares were reissued to Vansh at ₹8 per share fully paid up. Pass necessary journal entries for the above transactions in the books of the company by opening calls-in-arrears and calls-in-advance accounts.

[2020]

 

'Y Ltd. invited applications for issuing 15,000 equity shares of ₹10 each ion which ₹6 per share were called up, which were payable as follows
On application — ₹2 per share
On allotment — ₹1 per share
On first call — ₹3 per share
The issue was fully subscribed and the amount was received as follows
On 10,000 shares — ₹6 per share
On 3,000 shares — ₹3 per share
On 2,000 shares — ₹2 per share
The directors forfeited those shares on which less than ₹6 per share were received. The forfeited shares were reissued at ₹9 per share, as ₹6 per share paid-up.
Pass necessary journal entries for the above transactions in the books of the company.

[2015]

 

X Ltd. invited applications for the issue of 10,00,000 equity shares of ₹ 10 each payable as follows:

On application and allotment

₹ 3 per share

On first call

₹ 4 per share

On second and final call

₹ 3 per share

Applications for 15,00,000 shares were received and pro-rata allotment was made to all the applicants. Excess application money was adjusted on the sums due on first call. When the first call was made one shareholder who had applied for 15,000 shares did not pay the first call money. Pass necessary journal entries in the books of the company.

 

New Industries Limited issued a prospectus, inviting applications for 1,00,000 shares of ₹ 10 each at a premium of ₹ 5 per share, payable as follows: On Application ₹ 4.50; On Allotment ₹ 7.50 (including Premium); On 1st Call ₹ 2.00 and On Final Call ₹ 1.00.
Applications were received for 1,25,000 shares and allotment was made pro-rata to the applicants of 1,20,000 shares, the remaining applications being refused. Money received in excess on the application was adjusted towards the amount due on allotment.
D, to whom 2,000 shares were allotted, failed to pay allotment money and on his failure to pay the first call, his shares were forfeited. M, the holder of 3,000 shares, failed to pay the two calls, and so his shares were also forfeited. All these shares were
sold to R, credited as fully paid for ₹ 8 per share.
Pass Cash Book and journal entries (with narrations) to record the above issue of shares by the company.

 

Software Ltd. company with registered capital of ₹ 5,00,000 in shares of ₹ 10 each issued 20,000 of such shares payable ₹ 2 on application, ₹ 4 on allotment, ₹ 2 on first call ₹ 2 on final call. All the money payable on allotment was duly received but on the first call being made, one shareholder paid the entire balance on his holding of 300 shares and five shareholders with a total holding of 1,000 shares failed to pay their dues on the first call. These shares were forfeited for non-payment of first call money. Final call was made and all the money due was received. Later on, forfeited shares were reissued @ ₹ 6 per share as fully paid-up.
Record the above in the company's Journal and prepare the Balance Sheet.

 

Manvet Ltd. invited applications for issuing 10,00,000 equity shares of ₹10 each payable as follows:
On application and allotment ₹4 per share (including premium ₹1),
On first call ₹4 per share,
On second and final call ₹3 per share.
Applications for 15,00,000 shares were received and pro-rata allotment was made to all the applicants. Excess application money was adjusted on the sums due on calls. A shareholder who had applied for 6,000 shares did not pay the first, and the second and final call. His shares were forfeited. 90% of the forfeited shares were reissued at ₹8 per share fully paid up.
Pass necessary journal entries for the above transactions in the books of the company.

 

Anishka Ltd. invited applications for 2,00,000 equity shares of ₹10 each at a premium of ₹4 per share. The amount was payable as follows:
On Application ₹6 (including premium ₹2)
On Allotment ₹7 (including premium ₹2)
Balance on first and final call.
Applications for 3,00,000 shares were received. Allotment was made to all the applicants on pro-rata basis.
Mehak, to whom 400 shares were allotted failed to pay allotment and call money. Khushboo, who had applied for 300 shares failed to pay the call money. Their shares were forfeited after final call. 400 of the forfeited shares (including all shares of Khushboo) were reissued @ ₹8 per share as fully paid up.
Pass the necessary journal entries by opening ‘Calls in Arrears A/c’ wherever necessary.

 

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