Practice Questions on Issue of Shares
- List any two limitations of sole proprietorship and partnership business which makes company form a suitable choice.
- Under what head, will share capital be shown in a company's balance sheet?
- How are calls in arrears shown in a company's balance sheet?
- How are calls in advance shown in a company's balance sheet?
- "Authorised capital may be equal to or greater than the issued capital." True or False?
- Issued capital is always greater than the registered capital. True or False?
- What is the maximum amount of a call according to Table F of Schedule I?
- What is the minimum time interval between two consecutive calls according to Table F?
- A company issued 50,000 shares and received application for 60,000 shares. What is this situation called?
- State any three purposes other than 'issue of bonus shares' for which securities premium can be utilized. (CBSE 2015)
- What do you mean by ESOP? State its objective.
- Define private placement of shares.
Sooraj Ltd. was registered with an authorised capital of Rs 5,00,000 divided into 50,000 equity shares of Rs 10 each. The company decided to offer to the public for subscription 30,000 equity shares of Rs 10 each at a premium of Rs 20 per share. Applications for 28,000 shares were received and allotment was made to all the applicants. All calls were made and duly received except the final call of Rs 2 per share on 200 shares. Show the Share Capital in the balance sheet of Sooraj Ltd. Also prepare notes to accounts for the same.
A company was formed with an authorised capital of Rs 1, 00, 00,000 divided into 2, 00,000 equity shares of Rs 50 each. The company invited applications for 1, 80,000 shares. The amount was payable on application Rs 15, allotment Rs 20 and balance on final call. The company did not make the call during the year. Show the share capital in balance sheet. Also prepare notes to accounts.
D Ltd issued Rs 40, 00,000 shares of Rs 10 each out of its registered capital of Rs 10, 00, 00,000. Amount payable on these shares was as follows:
On application: Rs 1 per share
On allotment: Rs 2 per share
On first call: Rs 3 per share
On second and final call: Rs 4 per share
All calls were made and duly received except second and final call on 1000 shares held by Vipul. These shares were forfeited. Present ‘share capital’ in the balance sheet. Also prepare notes to accounts.
Subash Ltd. invited applications for issuing 5,000 equity shares of Rs 10 each at a premium of Rs 2 each. The whole amount was payable on application. The issue was fully subscribed. Pass the necessary journal entries.
If the amount of purchase consideration is more than the net assets, the difference will be written in _____ account.
If the amount of purchase consideration is lower than the net assets, the difference will be written in _____ account.
A building has been purchased for Rs.1,10,000 from X Ltd. X Ltd., has been issued 12% preference shares of Rs 100 each in Purchase Consideration at a Premium of 10% Journalize the above transaction.
D ltd took over assets of Rs 25,00,000 and liabilities of Rs 6,00,000 of M Ltd. D Ltd. paid the purchase consideration by issuing 10,000 equity shares of Rs 100 each at a premium of 10% and Rs 11,00,000 by bank draft. Calculate the purchase consideration and pass necessary journal entries in the books of D Ltd.
D Ltd issued Rs 40, 00,000 shares of Rs 10 each out of its registered capital of Rs 10, 00, 00,000. Amount payable on these shares was as follows: Application: Rs 1 per share, allotment: Rs 2 per share, first call: Rs 3 per share, second and final call: Rs 4 per share. All calls were made and duly received except second and final call on 1000 shares held by Vipul. Pass the necessary journal entries.
Give journal entries for forfeiture and reissue of shares:
a. X ltd forfeited 1,000 equity shares of Rs. 10 each, issued at premium of Rs 3 per share for non-payment of final call of Rs 6 (including premium) per share. The forfeited shares were reissued as fully paid up at Rs 7 per share.
b. X Ltd forfeited 1,000 shares of Rs 10 each, Rs 8 called up, for non-payment of allotment money of Rs. 5 per share (including Rs 2 as premium). Out of these, 800 shares were re-issued at Rs 7 per share as Rs 8 called up.
N Ltd issued 2,000 shares of Rs 100 each. All the money was received except on 200 shares on which only Rs 90 per share was received. These shares were forfeited and out of the forfeited shares 100 shares were reissued at Rs 80 each as fully paid up. Pass the necessary journal entries and prepare forfeited share account.
A co. invited applications for issuing 10,000 equity shares of Rs 50 each at a premium of Rs 100 per share. The amount was payable as follows:
On application – Rs 75 per share (including Rs 50 per share)
On allotment – Balance
The issue was fully subscribed. A shareholder holding 400 shares paid his entire share money at the time of application. Another shareholder holding 300 shares did not pay the allotment money. His shares were forfeited. The forfeited shares were later reissued for Rs 90 per share as fully paid up.
Journalise in the books of the company.
S ltd. invited applications for issuing 70,000 shares of Rs 10 each on which Rs 7 per share were called up, which were payable as follows:
Application- Rs 2 per share
Allotment- Rs 3 per share
First call- Balance
The amount was received as follows:
On 40,000 shares- Rs 7 per share
On 20,000 shares – Rs 5 per share
On 10,000 shares- Rs 2 per share
The directors forfeited 30,000 shares on which less than Rs 7 per share were received. Later on the forfeited shares were reissued at Rs 5 per share as Rs 7 per share paid up.
Journalise in the books of the company.
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