- Anish Limited issued 30,000 equity shares of Rs.100 each payable at Rs.30 on application, Rs.50 on allotment and Rs.20 on 1st and final call. All money was duly received. Record these transactions in the journal of the company.
Solution:-
Books of Ashis Limited
2. The Adarsh control Device Ltd. Was registered with the authorized capital of Rs.3,00,000 divided into 30,000 shares of Rs.10 each, which offered to the public. Amount payable as Rs.3 per share on application, Rs.4 per share on allotment and Rs.3 per share on first and final call. These share were fully subscribed and all money was dully received. Prepare journal and Cash Book.
Solution:-
Books of Adarsh Control Device Ltd.
Journal
3. Software solution India Ltd. Inviting application for 20,000 equity share of Rs.100 each, payable Rs.40 on application, Rs.30 on allotment and Rs.30 on call. The company received applications for 32,000 shares. Application for 2,000 shares were rejected and money returned to Applicants. Applications for 10,000 shares were accepted in full and applicants for 20,000 share allotted half of the number of shared applied and excess application money adjusted into allotment. All money received due on allotment and call. Prepare journal and cash book.
Solution:-
Books of Software solution India Ltd.
Journal
Working Note:
4. Rupak Ltd. Issued 10,000 shares of Rs.100 each payable Rs.20 per share on application, Rs.30 per share on allotment and balance in two calls of Rs.25 per share. The application and allotment money were duly received. On first call all member pays their dues except one member holding 200 shares, while another member holding 500 shares paid for the balance due in full. Final call was not made. Give journal entries and prepare cash book.
Solution:-
Books of Rupak Ltd.
Journal
Working Note:
5. Mohit Glass Ltd. Issued 20,000 shares of Rs.100 each at Rs.110 per share, payable Rs.30 on application, Rs.40 on allotment (including Premium), Rs.20 on first call and Rs.20 on final call. The applications were received for Rs.24,000 shares and allotted 20,000 shares and reject 4,000 shares and amount returned thereon. The money was duly received. Give journal entries.
Solution:-
Books of Mohit Glass Ltd.
Journal
6. A limited company offered for subscription of 1,00,000 equity shares of Rs.10 each at a premium of Rs.2 per share 2,00,000. 10% Preference shares of Rs.10 each at par.
The amount on share was payable as under:
All the share were fully subscribed, called-up and paid. Record these transactions in the journal and cash book of the company.
Solution:-
Books of A Limited
Journal
Dr. Cash Book (bank column) Cr.
7. Eastern company Limited, having and authorized capital of Rs.10,00,000 in share of Rs.10 each, issued 50,000 shares at a premium of Rs.3 per share payable as follows:
On Application Rs.3 per share
On Allotment (including premium) Rs.5 per share
On first call (due three months after allotment) Rs.3 per share and the balance as and when required.
Applications were received for 60,000 shares and the directors allotted the shares as follows:
- Applicants for 40,000 shares received shares, in full.
- Applicants for 15,000 shares received and allotment of 8,000 shares.
- Applicants for 500 shares received 200 shares on allotment, excess money being returned.
All amounts due on allotment were received.
The first call was duly made and the money was received with the exception of the call due on 100 shares.
Give journal and cash book entires to record these transacitons of the company. Also prepare the Balance Sheet of the company.
Solution:-
Books of Eastern Company Ltd.
Journal
8. Sumit Machine Ltd issued 50,000 shares of Rs.100 each at discount of 5%. The shares were payable Rs.25 on application. Rs.40 on allotment and Rs.30 on first and final call. The issue were fully subscribed and money were duly received except the final call on 400 shares. The discount was adjusted on allotment.
Give journal entires and prepare balance sheet.
Solution:-
Books of Sumit Machine Ltd.
Journal
9. Kumar Ltd. Purchases assets of Rs.6,30,000 from Bhanu Oil Ltd. Kumar Ltd. Issued equity share of Rs.100 each fully paid in consideration. What journal entires will be made, if the share are issued, a) at par, b) at discount of 10% and c) at premium of 20%.
Solution:-
Case a) Books of Kumar Ltd.
Journal
Case b)
Journal
Case b)
Journal
10. Bansal Heavy machine Ltd purchased machine worth Rs.3,20,000 from Handa Trader. Payment was made as Rs.50,000 cash and remaining amount by issue of equity share of the face value of Rs.100 each fully paid at an issue price of Rs.90 each. Give journal entires to record the above transaction.
Solution:-
Books of Bansal Heavy Machine Ltd.
Journal
11. Naman Ltd issued 20,000 shares of Rs.100 each, payable Rs.25 on application, Rs.30 on allotment, Rs.25 on first call and The balance on final call. All money duly received except Anubha, who holding 200 shares did not pay allotment and calls money and Kumkum, who holding 100 shares did not pay both the calls. The directors forfeited shares of Anubha and kumkum. Give journal entires.
Solution:-
Books of Naman Glass Ltd.
Journal
Working Note:
Forfeited Amount
Amount on application (300 Shares @ 25 each) = 7500
Amount on allotment (100 Shares @ 30 each = 3,000
12. Kishna Ltd issued 15,000 shares of Rs.100 each at a premium of Rs.10 per share, payable as follows:
On application Rs.30
On allotment Rs.50 (including premium)
On first and final call Rs.30
All the shares subscribed and the company received all the money due, With the exception of the allotment and call money on 150 shares. These shares were forfeited and reissued to Neha as fully paid share of Rs.12 each. Give journal entires in the books of the company.
Solution:-
Books of Krishna Ltd.
Journal
13. Arushi Computers Ltd issued 10,000 equity shares of Rs.100 each at 10% discount. The net amount payable as follows:
On application Rs.20
On allotment Rs.30 (Rs.40 – discount Rs.10)
On first call Rs.30
On final call Rs.10
A shareholder holding 200 shares did not pay final call. His shares Were forfeited. Out of these 150 shares were reissued to Ms. Sonia at Rs.75 per shares. Give journal entires in the books of the company.
Solution:-
Books of Krishna Ltd.
Journal
Working Notes:
Amount Transferred to Capital Reserve A/c
Amount Credited share forfeiture Rs.80 per share
Less: Amount debited to Share forfeiture Rs.(15) per share
Balance after adjustment Rs.65 per share
Amount transferred to Capital Reserve Account = Balance per share after adjustment x Number of Shares reissued Rs.9,750 = Rs.65 x Rs.150 per sh
14. Raunak Cotton Ltd. Issued a prospectus inviting applications for 6,000 equity shares of Rs.100 each at a premium of Rs.20 per shares, payable as follows:
On application Rs.20
On allotment Rs.50 (including premium)
On first call Rs.30
On final call Rs.20
Application were received for 10,000 shares and allotment was made Pro-rata to the applicants of 8,000 shares, the remaining applications Being refused. Money received in excess on the application was adjusted toward the amount due on allotment. Rohit, to whom 300 shares were allotted failed to pay allotment and calls money, his shares were forfeited. Itika, who applied for 600 shares, failed to pay the two calls and her share were also forfeited. All these shares were sold to Kartika as fully paid for Rs.80 per shares. Give journal entires in the books of the company.
Solution:-
Books of Krishna Ltd.
Journal
15. Himalaya Company Limited issued for public subscription of 1,20,000 equity shares of Rs.10 each at a premium of Rs.2 per share payable as under:
With Application Rs.3 per share
On allotment (including premium) Rs.5 per share
On first call Rs.2 per share
On Second and Final call Rs.2 per share
Application were received for 1,60,000 shares. Allotment was made on pro-rata basis. Excess money on application was adjusted against the amount due on allotment.
Rohan, whom 4,800 shares were allotted, failed to pay for the two calls. These shares were subsequently forfeited after the second call was made. All the shares forfeited were reissued to Teena as fully paid at Rs.7 per share.
Record journal entries in the books of the company to record these transactions relating to share capital. Also show the company’s balance sheet.
Solution:-
Books of Himalya Company Ltd.
Journal
16. Prince Limited issued a prospectus inviting applications for 2,00,000 equity shares of Rs.10 each at a premium of Rs.3 per share payable as follows:
With Application Rs.2
On allotment (including premium) Rs.5
On first call Rs.3
On second call Rs.3
Applications were received for 30,000 shares and allotment was made on pro-rata basis. Money overpaid on application was adjusted to the amount due on allotment.
Mr. ‘Mohit’ whom 400 shares were allotted, failed to pay the allotment money and the first call, and her share were forfeited after the first call. Mr. ‘Joly’, whom 600 shares were allotted, failed to pay for the two calls and hence, his shares were forfeited. Of the shares forfeited, 800 shares were reissued to Supriya as fully paid for Rs.9 per share, the whole of Mr. Mohit’s shares being included. Record journal entries in the books of the Company and prepare the Balance Sheet.
Solution:-
Books of Prince Ltd.
Journal
