Chapter 8 - Company Accounts - Issue of Shares [Latest edition] Book-keeping and Accountancy 12th Standard HSC Maharashtra State Board

Balbharati solutions for Book-keeping and Accountancy 12th Standard HSC Maharashtra State Board Chapter 8 - Company Accounts - Issue of Shares [Latest edition]


Select the appropriate answer from the alternative given below and rewrite the sentence.

 

The balance of Share Forfeiture A/c is transferred to ______________ account after re-issue of these shares.

 

Reserve Capital

Capital Reserve

Profit & Loss

Share capital


Premium received on issue of shares is shown to______________.

 

Liability side of Balance Sheet

Asset side of Balance Sheet

Profit & Loss Account debit side

Profit & Loss A/c credit side


Shareholders get_______________ on shares.

 

Interest

Commission

Rent

Dividends


The document inviting to subscribe to the shares of a company is______________

 

Prospectus

Memorandum of Association

Articles of Association

Share certificate


As per SEBI guidelines minimum amount payable on share application should be_______________ of Nominal Value of shares.

10%

15%

2%

5%


The liability of shareholder in Joint Stock Company is___________

Joint and Sever

Limited

Unlimited

huge


The Share Capital which a company is authorised to issue by its Memorandum of Association is__________.

Nominal capital/Authorised capital

Issued capital

Paid-up capital

Reserve capital


The unpaid amount on allotment and calls may be transferred to_____________account.

calls in advance

calls

calls in arrears

allotment


There must be provision in _____________ for forfeiture of shares.

Article of Association

Memorandum of Association

Prospectus

Balance Sheet


Give one word/term/phrase for the following statement.

 

Amount called-up on shares by the company but not received.


Calls-in-Arrears.


Issue of share at its face value


Issue at par.


The person who purchase the shares of a company.


Shareholder


The form of business organisation where huge amount of capital can be raised.


Joint-stock company.


The capital which is subscribed by the public.


Subscribed capital.


The shares having preferential right at the time of winding up of the company


Preference shares.


The shares on which dividend is not fixed.


Equity shares.



The part of subscribed capital which is not called-up by the company.


Uncalled capital.


State true or false with reason.


Directors can forfeit the shares for any reason.

Options

True

False


This statement is False.

After paying money on a share application, When a share applicant fails to pay the call money or premium on shares in spite of repeated reminders and warnings directors/company can forfeit the shares.


Once the application money is received, directors can immediately proceed for allotment of shares.

Options

True

False


This statement is False.

Directors can proceed for allotment of shares only after receiving the minimum subscription amount of the issued amount by cheque or other instrument complying all legal requirements.


Joint-stock company form of the business organisation came into existence after the industrial revolution.

Options

True

False


This statement is True.

As the volume and scale of trade and industry expanded, specially after the industrial revolution, a very large unit of commercial organisation requiring large capital and greater managerial skill, called Joint stock company came into existence.


Equity shareholders get a guaranteed rate of dividend every year.

Options

True

False


This statement is False.

One of the features for equity shares is the rate of dividend payable on equity shares keeps on changing from one year to another. So, there is no question of guaranteed dividend every year for equity shareholders.


Face value of shares and market value of shares is always the same.

Options

True

False


This statement is False.

Face value of shares means issue price of shares while market value of shares means trading price of shares at stock exchange. Face value of shares remains the same and fixed. However, market price changes as per the performance of the company. Hence face value and market value of shares are not the same.


Sweat shares are issued to the public.

Options

True

False


This statement is False.

Sweat shares are issued by a company to its directors or employees at a discount or for consideration other than cash. Sweat shares are not issued to public.


State whether you agree or disagree with following statement:


In case of Pro-rata allotment the excess application money received must be refunded.

Agree

Disagree


Calls in Advance account are shown on the Asset side of the Balance sheet.

Agree

Disagree


The Authorised capital is also known as Nominal Capital.

Agree

Disagree


Paid-up capital can be more than Called up Capital.

Agree

Disagree


When shares are forfeited Shares Capital Account is credited.

Agree

Disagree


Directors can reissue forfeited shares.

Agree

Disagree


When the issued price of share is ₹ 12 and face value is ₹ 10, the share is said to be issued at premium.

Agree

Disagree


Public limited company can issue its share without issuing its prospectus.

Agree

Disagree


Shares can be issued for consideration other than cash.

Agree

Disagree


Answer in one sentence only

 

What is Preference shares?


Preference Shares is a type of a share which enjoys priority or preference over equity share for the repayment of dividend at a predetermined fixed rate and for the repayment of capital.


What is Registered Capital?


Registered Capital or Authorised Capital means maximum limit up to which a company is authorised to raise share capital.


What is Reserve Capital?


Reserve Capital is that part of the subscribed capital which is reserved to be called-up only at the time of winding up or liquidation of the company.


What is Over subscription of shares?


When a company received more applications of shares than those actually offered or issued to the public, known as Over Subscription of Shares.


Which account is debited when share first call money is received?


Bank accounts will be debited when share first call money is received.

When are shares allotted on a pro-rata basis?


Shares are said to be allotted on a pro-rata basis when the applications are received for more shares than the number of shares issued and shares are allotted in proportion to the number of shares applied for.


What is Forfeiture of Shares?


When a shareholder fails to pay the call money or premium on the shares in spite of repeated reminders and warnings, the company forfeits the shares of such defaulters known as forfeiture of shares.


What is Calls-in-Arrears?


Non-payment of allotment or call money by the applicants in spite of repeated reminders are called Calls-in-Arrears.


What do you mean by Shares Issued at Premium?


When shareholders are supposed to pay a price higher than the face value of the shares, then shares are said to be issued at premium.


What is Paid-up Capital?


Part of the called-up capital which is actually paid by the shareholders is called Paid-up Share Capital.


Complete the following sentence.


When the face value of the share is ₹ 100 and the issued price is ₹ 120, then it is said that the shares are issued at premium.



Authorised Capital is the Capital which a company is authorised to issue by its Memorandum of Association.


The difference between Called-up Capital and Paid-up Capital is known as Calls-in-Arrears.


Preference shareholders get fixed rate of dividend.


Equity shareholders are the real owners of the company.


Joint-stock company form of business organisation in which Capital is raised through the issue of shares.


Subscribed Capital is the part of issued capital which is subscribed by the public.


The part of Authorised Capital which is not issued to the public is known as Unissued Capital.



Calculate the following.

 

One shareholder holding 500 equity shares paid share application money @ ₹ 3 Allotment money @ ₹ 4 per share and failed to pay final call of ₹ 3 per share, his shares were forfeited. Calculate the amount of share forfeiture.

 

Solution: 

 

Amount of forfeiture = Amount received by company (In case of non-payment of ‘calls’)

Here, shareholder paid  ₹ 3 per share on application and ₹ 4 per share on allotment on 500 shares. So, total amount received by company.

= 500 × ₹  3 + 500 × ₹ 4

= 1,500 + 2,000

= ₹ 3,500.

∴ Amount of share forfeiture =  ₹ 3,500.


10000 equity shares of ₹ 10 each issued at 10% premium. Calculate the total amount of share premium.


Solution: 


Equity shares = 10,000

Face value = ₹ 10 per share

Premium @ 10 % = 10,000 × 10 × (10/100) = ₹ 10,000.

So, premium 10,000 shares of ₹ 10 each at 10 % = ₹ 10,000.



Company received an excess application for 5000 shares @ ₹4 per share. Applications of 1000 shares were rejected and a pro-rata allotment was made. Calculated the amount of application money adjusted with allotment.


Solution: 


Excess application money received for 5000 shares @ ₹ 4 per share

= ₹ 20,000

Less: Application of 1000 shares rejected and money refunded

= ₹ 4,000

Excess money received to be adjusted with allotment

₹ 16,000

 


80000 Equity shares of ₹ 10 each issued and fully subscribed and called up at 20% premium. Calculate the amount of Equity share Capital.


Solution: 

Equity Share capital = No. of equity shares × face value of each share

= 80,000 × ₹ 10

= ₹ 8,00,000

Note: Equity Share capital has no concern with premium or discount amount.



Directors issued 20000 equity shares of ₹ 100 each at par. These were fully subscribed and called up. All money received except one shareholder holding 100 equity shares failed to pay final call of ₹ 20 per share. Calculate the amount of paid-up capital of the company.



Solution: 

Fully subscribed and called-up amount = 20,000 equity shares × ₹ 100 each share

= ₹ 20,00,000

But one shareholder failed to pay final call of ₹ 20 per share of 100 equity shares means Non-payment of shares = 100  equity shares × ₹  20 per share

= ₹ 2,000

∴ Total Paid-up capital amount = ₹ 20,00,000 – ₹ 2,000

= ₹ 19,98,000



Company sends Regret letter for 100 shares and Allotment letter to 25000 shareholders. Application money was ₹ 20 per share. Calculate the amount of application money which company is refunding.


Solution: 


Company send Regret letter for 100 shares for ₹ 20 per share application money received

i.e. only that much amount company will refund.

Amount of refund = No. of shares ×  Value of per share

= 100 × ₹ 20

= ₹ 2,000


PRACTICAL PROBLEM 

[PAGES 341 - 342]


Balbharati solutions for Book-keeping and Accountancy 12th Standard Hsc Maharashtra State Board Chapter 8 Company Accounts - Issue of Shares Practical problem [Pages 341 - 342]


Practical problem | Q 1 | Page 341


Vijay Ltd. was registered with an authorised capital of  15,00,000 divided into 1,50,000 equity shares of  10 each. Company issued 1,00,000 equity shares of  10 each at a premium of  2 per share.


Company received applications for 80,000 equity shares and were allotted the shares.


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 final call of  2 per share. All money were received except one shareholder holding 500 shares did not pay first call.


Show Authorised Capital, Issued Capital, Subscribed Capital, Called-up Capital, Paid-up Capital, Calls in Arrears, and Share Premium amount in company balance sheet.


Solution: 


In the books of Vijay Ltd. Balance Sheet as on ----------------------



Liabilities

Amount (₹)

Assets

Amount (₹)

Authorised Capital :


Cash at Bank

7,98,500

1,50,000 equity shares of ₹10 each

15,00,000



Issued Capital :




1,00,000 equity shares of ₹10 each

10,00,000



Subscribed Capital :




80,000 equity shares of ₹10 each

8,00,000



Called-up Capital :




80,000 equity shares of ₹ 8 each

6,40,000



Paid-up Share Capital :





(80,000 equity shares at 8 per shares)

6,40,000




Less: Calls-in-Arrears

(500 shares at ₹3 per share)

1,500

6,38,500



Share Premium / Securities A/c

(80,000 shares at ₹2 per share)

1,60,000




7,98,500


7,98,500

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 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 first call

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



Practical problem | Q 2 | Page 341


Anand Company Limited issued 1,00,000 Preference shares of ? 10 each payable as -


On On Application  4


On Allotment  3


On First call  2


On Second & Final call 1


Company received application for all these share and received all money.


Pass Journal Entries in the books of Anand Company Ltd.


Solution: 


Journal Entries in the books of Anand Company Limited



Date

Particulars

L.F

Debit Amount (₹)

Credit Amount (₹)

1

Bank A/c Dr.


4,00,000


To Preference Share Application A/c



4,00,000

( Being application money on 1,00,000 preference shares @ ₹ 4 per share received)




2

Preference Share Application A/c Dr.


4,00,000


To Preference Share Capital A/c



4,00,000

( Being application money received on 1,00,000 preference share @ ₹ 4 per share transferred to Preference Share Capital Account)




3

Preference Share Allotment A/c Dr


3,00,000


To Preference Share Capital A/c



3,00,000

( Being allotment money on 1,00,000 preference shares @ ₹ 3 per share due)




4

Bank A/c Dr.


3,00,000


To Preference Share Allotment A/c



3,00,000

( Being allotment money on 1,00,000 preference share @ ₹ 3 per share received)




5

Preference Share First Call A/c Dr.


2,00,000


To Preference Share Capital A/c



2,00,000

( Being first call money on 1,00,000 preference shares @ ₹ 2 per share due)




6

Bank A/c Dr


2,00,000


To Preference Share First Call A/c



2,00,000

( Being first call money on 1,00,000 preference share @ ₹ 2 per share received)




7

Preference Share Second & Final Call A/c Dr


1,00,000


To Preference Share Capital A/c



1,00,000

( Being second & final call money on 1,00,000 Preference Shares @ ₹ 1 per share due)




8

Bank A/c Dr.


1,00,000


To Preference Share Second & Final Call A/c



1,00,000

( Being Second and final call money on 1,00,000 Preference Shares @ ₹ 1 per share received)







2000000

2000000



Practical problem | Q 3 | Page 341


Rohini Company Limited issued 25000 equity shares of  100 each payable as follows -


On Application  20


On Allotment  30


On First call  20


On Second & Final call  30


Applications were received for 22,000 equity shares and allotment of shares were made to them. All money was received by the company.


Pass Journal Entries in the books of Rohini Co. Ltd.


Solution: 


Journal Entries in the books of Rohini Company Limited



Date

Particulars

L.F

Debit Amount (₹)

Credit Amount (₹)

1

Bank A/c Dr.


4,40,000


To Equity Share Application A/c



4,40,000

( Being equity share application money on 22,000 shares @ ₹ 20 per share received)




2

Equity Share Application A/c Dr


4,40,000


To Equity Share Capital A/c



4,40,000

( Being equity share application money on 22,000 equity shares @ ₹ 20 per share transferred to Equity Share Capital Account)




3

Equity Share Allotment A/c Dr.


6,60,000


To Equity Share Capital A/c



6,60,000

( Being allotment money on 22,000 equity shares @ ₹ 30 per share due)




4

Bank A/c Dr


6,60,000


To Equity Share Allotment A/c



6,60,000

( Being equity share allotment money on 22,000 shares @ ₹ 30 per share received)




5

Equity Share First Call A/c Dr.


4,40,000


To Equity Share Capital A/c



4,40,000

( Being equity share first call money on 22,000 shares @ ₹ 20 due)




6

Bank A/c Dr.


4,40,000


To Equity Share First Call A/c



4,40,000

( Being equity share first call money on 22,000 shares @ ₹ 20 per share received)




7

Equity Share Second & Final Call A/c Dr.


6,60,000


To Equity Share Capital A/c



6,60,000

( Being equity share second & final call money on 22,000 shares @ ₹ 30 due)




8

Bank A/c Dr


6,60,000


To Equity Share Second & Final Call A/c



6,60,000

( Being equity share second & final call money on 22,000 shares @ ₹ 30 per share received)







4400000

4400000



Practical problem | Q 4 | Page 341


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 first call


 2 on final call


Applications were received for 1,20,000 equity shares. The Directors decided to reject excess applications and refunded application money on that. Company received all the money.


Pass Journal Entries in the books of a company.


Solution: 


Journal Entries in the books of Deepak Manufacturing Co. Ltd.



Date

Particulars

L.F

Debit Amount (₹)

Credit Amount (₹)

1

Bank A/c Dr.


2,40,000


To Equity Share Application A/c



2,40,000

( Being equity share application money on 1,20,000 shares @ ₹ 2 per share received)




2

Equity Share Application A/c Dr.


2,00,000


To Equity Share Capital A/c



2,00,000

( Being application money on 1,00,000 shares transferred to equity share capital account)




3

Equity share Application A/c Dr.


40,000


To Bank A/c



40,000

( Being application money on excess 20,000 shares @ ₹2 per share refunded)




4

Equity Share Allotment A/c Dr


4,00,000


To Equity Share Capital A/c



4,00,000

( Being equity share allotment money on 1,00,000 shares @ ₹4 per share due)




5

Bank A/c Dr.


4,00,000


To Equity Share Allotment A/c



4,00,000

( Being allotment money on 1,00,000 shares @ ₹4 per share received)




6

Equity Share First Call A/c Dr.


2,00,000


To Equity Share Capital A/c



2,00,000

( Being equity share first call money on 1,00,000 shares @ ₹2 per share due)




7

Bank A/c Dr.


2,00,000


To Equity Share First Call A/c



2,00,000

( Being equity first call money on 1,00,000 shares @ ₹2 per share received)




8

Equity Share Final Call A/c Dr.


2,00,000


To Equity Share Capital A/c



2,00,000

( Being equity share final call money on 1,00,000 shares @ ₹2 per share due)




9

Bank A/c Dr.


2,00,000


To Equity Share Final Call A/c



2,00,000

( Being equity share final call money on 1,00,000 shares @ ₹ 2 per share received)







2080000

2080000



Practical problem | Q 5 | Page 342


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 26000 equity shares. The applicants on 2000 shares were sent letter of regret and their application money was refunded. Remaining applicants were allotted shares on a pro-rata basis. All the money due on Allotment and Final call was duly received.


Make necessary Journal entries in the books of Sucheta Company Ltd.



Solution: 


Journal Entries in the books of Sucheta Company Limited



Date

Particulars

L.F

Debit Amount (₹)

Credit Amount (₹)

1

Bank A/c Dr.


2,60,000


To Equity Share Application A/c



2,60,000

( Being application money on 26,000 equity shares @ ₹ 10 per share received)




2

Equity Share Application A/c Dr.


20,000


To Bank A/c



20,000

( Being application money on 2,000 equity shares @ ₹ 10 per share refunded)




3

Equity Share Application A/c Dr.


2,40,000


To Equity Share Capital A/c



2,00,000

To Equity Share Allotment A/c



40,000

( Being application money on 20,000 equity shares transferred to equity share capital and application money on 2,000 equity shares adjusted against Share Allotment A/c)




4

Equity Share Allotment A/c Dr.


10,00,000


To Equity Share Capital A/c



8,00,000

To Share Premium A/c



2,00,000

( Being allotment money (including premium) on 20,000 equity shares @ ₹ 50 per share due)




5

Bank A/c Dr.


9,60,000


To Equity Share Allotment A/c



9,60,000

( Being allotment money on 20,000 equity shares, after adjusting excess application money received)




6

Equity Share Final Call A/c Dr.


12,00,000


To Equity Share Capital A/c



10,00,000

To Share Premium A/c



2,00,000

( Being share final call money (including premium) on 20,000 equity shares @ ₹ 60 per share due)




7

Bank A/c Dr


12,00,000


To Equity Share Final Call A/c



12,00,000

( Being share final call money on 20,000 equity shares @ ₹ 60 per share received)







4880000

4880000


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


2,40,000

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 :



Per-share value ₹ 100

Premium amount ₹ 20

On Application: ₹ 10 per share

On Allotment: ₹ 40 per share for Capital + ₹ 10 per share for Premium

On final call: ₹ 50 per share for Capital + ₹ 10 per share for Premium



Practical problem | Q 6 | Page 342


Suhas Limited issued 10000 equity shares of  10 each at a premium of  2 per share payable  3 on application,  5 (including premium) on allotment and the balance in two calls of equal amount. Applications were received for ll,000 equity shares and pro-rata allotment was made for all the applicants. The excess application money was adjusted towards allotment. Mrs. Shobha who were allotted 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 presentation in Balance sheet.


Solution: 


Journal Entries in the books of Suhas Limited



Date

Particulars

L.F

Debit Amount (₹)

Credit Amount (₹)

1

Bank A/c Dr


33,000


To Equity Share Application A/c



33,000

( Being application money on 11,000 equity shares @ ₹ 3 per share received)




2

Equity Share Application A/c Dr.


33,000


To Equity Share Capital A/c



30,000

To Equity Share Allotment A/c



3,000

( Being application money on 10,000 shares transferred to Share Capital A/c and remaining amount adjusted against allotment)




3

Equity Share Allotment A/c Dr


50,000


To Equity Share Capital A/c



30,000

To Share Premium A/c



20,000

( Being allotment money on 10,000 equity shares @ ₹ 5 per share, including premium of ₹ 2 per share, due)




4

Bank A/c Dr


47,000


To Equity Share Allotment A/c



47,000

( Being share allotment money received after adjusting excess application money received)




5

Equity Share First Call A/c Dr


20,000


To Equity Share Capital A/c



20,000

( Being equity share first call money on 10,000 shares @ ₹ 2 per share due)




6

Bank A/c Dr.


19,600


To Equity Share First Call A/c



19,600

( Being share first call money received @ ₹ 2 per share except 200 shares of Mrs Shobha)




7

Equity Share Final Call A/c Dr.


20,000


To Equity Share Capital A/c



20,000

( Being equity share final call money on 10,000 shares @ ₹ 2 per share due)




8

Bank A/c Dr.


19,600


To Equity Share Final Call A/c



19,600

( Being share final call money received @ ₹ 2 per share except 200 shares of Mrs. Shobha)




9

Equity Share Capital A/c Dr


2,000


To Equity Share First Call A/c



400

To Equity Share Final Call A/c



400

To Equity Share Forfeiture A/c



1,200

( Being 200 shares of Mrs. Shobha forfeited due to non-payment of first and final call @ ₹ 2 each i.e. paid amount ₹ 6 per share forfeited by company)







244200

244200


Balance Sheet of Suhas Limited



Liabilities

Amount (₹)

Assets

Amount (₹)

Share Capital

98,000

Bank

1,19,200

Share Premium

20,000



Share forfeiture

1,200




1,19,200


1,19,200


Working Notes :

(1) Excess amount received at the time of application  3,000 adjusted at allotment stage, so allotment amount received in 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 equal amount i.e.  2 on 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 company received and company has right to forfeit only paid amount means company forfeited  1,200 of Mrs Shobha.



Practical problem | Q 7 | Page 342


Subhash Company Limited issues 2000 Equity shares of 100 each payable as  30 on application,  30 on allotment,  40 on first and final call. All the shares were subscribed and duly allotted. Company made all the calls. All cash was duly received except the first & 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.


Solution: 


Journal Entries in the books of Anand Company Limited



Date

Particulars

L.F

Debit Amount (₹)

Credit Amount (₹)

1

Bank A/c Dr.


60,000


To Equity Share Application A/c



60,000

(Being application money on 2,000 equity shares @ ₹ 30 per share received)




2

Equity Share Application A/c Dr


60,000


To Equity Share Capital A/c



60,000

(Being application money received on 2,000 equity shares transferred to equity share capital)




3

Equity Share Allotment A/c Dr.


60,000


To Equity Share Capital A/c



60,000

(Being equity share allotment money on 2,000 shares @ ₹ 30 per share due)




4

Bank A/c Dr


60,000


To Equity Share Allotment A/c



60,000

(Being equity share allotment money on 2,000 shares @ ₹ 30 per share received)




5

Equity Share First and Final Calls A/c Dr.


80,000


To Equity Share Capital A/c



80,000

(Being equity share first and final call money on 2,000 shares @ ₹ 40 per share due)




6

Bank A/c Dr.


76,000


To Equity Share First and Final Call A/c



76,000

(Being equity share first and final call money on 1900 shares @ ₹ 40 per share received)




7

Equity Share Capital A/c Dr.


10,000


To Equity Share First and Final Call A/c



4,000

To Equity Share Forfeiture A/c



6,000

( Being forfeiture of 100 shares due to non-payment of first and final call)




8

Bank A/c Dr


7,500


Equity Share Forfeiture A/c Dr


2,500


To Equity Share Capital A/c



10,000

(Being re-issue of 100 forfeited shares @ ₹ 75 per share)




9

Equity Share Forfeiture A/c Dr


3,500


To Capital Reserve A/c



3,500

(Being balance of Share Forfeiture A/c transferred to Capital Reserve A/c)







419500

419500

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.


Share Forfeiture A/c



Date

Particulars

J.F

Amount (₹ )

Date

Particulars

J.F

Amount (₹ )

8

To Equity Share Capital A/c


2,500

7

By Equity Share Capital A/c


6,000

9

To Capital Reserve A/c (Balancing figure)


3,500








6,000




6,000



Practical problem | Q 8 | Page 342


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 first call of  3 per share and final call of  5 per share. 80 shares of these were reissued at  15 per share fully paid


B) Bhakti Ltd. forfeited 100 equity shares of  10 each,  6 called-up on 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 first call of  3 per share. Later on 30 shares of these were re-issued at  7 per share.


Solution: 

Journal Entries [For Asha Ltd.]


Date

Particulars

L.F

Debit Amount (₹)

Credit Amount (₹)

(A)(i)

Equity Share Capital A/c Dr.


2,000


To Equity Share First Call A/c



300

To Equity Share Final Call A/c



500

To Equity Share Forfeiture A/c



1,200

( Being forfeiture of 100 equity shares due to non-payment of first call @ ₹3 and final call @ ₹5 per share)




(ii)

Bank A/c Dr.


1,200


Equity Share Forfeiture A/c Dr


400


To Equity Share Capital A/c



1,600

( Being re-issue of 80 forfeited shares @ ₹15 per share as fully paid-up)




(iii)

Equity Share Forfeiture A/c Dr.


560


To Capital Reserve A/c



560

( Being proportion balance of Share Forfeiture A/c transferred to Capital Reserve A/c)







4160

4160

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.]

 

Date

Particulars

L.F

Debit Amount (₹ )

Credit Amount (₹ )

(B)(i)

Equity Share Capital A/c (100 × ₹ 6) Dr


600


To Calls-in-Arrears A/c



100

To Equity Share Forteifure A/c (100 × ₹ 5)



500

(ii)

Bank A/c (80 × ₹ 6) Dr.


480


To Equity Share Capital A/c



480

( Being re-issue of 80 forfeited shares @ ₹ 6 per share as fully paidup)




(iii)

Equity Share Forfeiture A/c Dr.


400


To Capital Reserve A/c



400

( Being proportionate balance of Share Forfeiture A/c transferred to Capital Reserve A/c)







1480

1480

 

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 = ₹ 500

 80 shares – share forfeiture amount =? = ₹ 400

 

 (80 x 500) / 100 =  400


Now, shares were re-issued at  16 per share which is the called-up amount.

 Proportionate amount for Forfeiture A/c  400 will be transferred to Capital Reserve A/c.

 

Journal Entries [For Konark Ltd.]

Date

Particulars

L.F

Debit Amount (₹ )

Credit Amount (₹ )

(c)(i)

Equity Share Capital A/c (50 × ₹ 8) Dr


400


To Equity Share First Call A/c (50 × ₹ 3)



150

To Equity Share Forteifure A/c



250

( Being forfeiture of 50 equity shares due to non-payment of first call @ ₹ 3 per share)




(ii)

Bank A/c (30 × ₹ 7) Dr.


210


Equity Share Forfeiture A/c Dr


30


To Equity Share Capital A/c (30 × ₹ 8)



240

( Being re-issue of 30 forfeited shares @ ₹ 7 per share)




(iii)

Equity Share Forfeiture A/c Dr.


120


To Capital Reserve A/c



120

( Being proportionate balance of Share Forfeiture A/c transferred to Capital Reserve A/c)







760

760

 

Working Note: For C :

The proportionate amount debited to Forfeiture A/c :


For 50 shares – share forfeiture amount debited is ₹ 250

30 shares – share forfeiture amount =? = ₹ 150


 (30 x 250) / 50 =  150


Out of this  30 used for re-issue of forfeited shares.

 Balance of Share Forfeiture A/c =  150 –  30 =  120.


Book-keeping and Accountancy 12th Standard 

HSC Maharashtra State Board. Latest Syllabus.

Chapter 1: Introduction to Partnership and Partnership Final Accounts

Chapter 2: Accounts of ‘Not for Profit’ Concerns

Chapter 3: Reconstitution of Partnership (Admission of Partner)

Chapter 4: Reconstitution of Partnership (Retirement of Partner)

Chapter 5: Reconstitution of Partnership (Death of Partner)

Chapter 6: Dissolution of Partnership Firm

Chapter 7: Bills of Exchange

Chapter 8: Company Accounts - Issue of Shares

Chapter 9: Analysis of Financial Statements

Chapter 10: Computer In Accounting

 

ACCOUNTS BOARD PAPERS

HSC Accounts March 2020 Board Paper With Solution

MARCH 2014 : View | PDF Download

OCTOBER 2014 View | PDF Download

MARCH 2015 View | PDF Download

JULY 2015 View | PDF Download

MARCH 2016 View | PDF Download

JULY 2016 View | PDF Download

JULY 2017 View | PDF Download

MARCH 2017 View | PDF Download

MARCH 2018 View | PDF Download

JULY 2018 View | PDF Download

MARCH 2019 View | PDF Download

MARCH 2020 View | PDF Download

 

ACCOUNTANCY PAPER PATTERN: New 2020, Old View | PDF Download

PROFORMA OF TRADING ACCOUNT: View | PDF Download

PROFORMA OF PROFIT & LOSS ACCOUNT: View | PDF Download

PROFORMA OF BALANCE SHEET: View | PDF Download

FINAL ACCOUNT ADJUSTMENTS: View | PDF Download

SINGLE ENTRY: View : PDF Download

FINAL ACCOUNT: View | PDF Download

NPO : View | PDF Download

BILL OF EXCHANGE: View | PDF Download

FORMAT OF BILL: View | PDF Download

ADMISSION OF A PARTNER: View | PDF Download

RETIREMENT OF PARTNER: View | PDF Download

DEATH OF PARTNER: View | PDF Download

ACCOUNTING FOR SHARES : View | PDF Download

DISSOLUTION OF PARTNERSHIP FIRM : View | PDF Download

VALUATION OF GOODWILL WITH SOLUTION: View | PDF Download

FORMAT OF FINAL ACCOUNT : View | PDF Download

INTRODUCTION TO PARTNERSHIP: View | PDF Download 

 

ACCOUNTANCY PAPER PATTERN

SINGLE ENTRY

FINAL ACCOUNT

NPO

BILL OF EXCHANGE

BILL OF EXCHANGE [FORMAT].

ADMISSION OF A PARTNER

RETIREMENT OF PARTNER

DEATH OF PARTNER

ACCOUNTING FOR SHARES

DISSOLUTION OF PARTNERSHIP FIRM

VALUATION OF GOODWILL WITH SOLUTION

FORMAT OF FINAL ACCOUNT

INTRODUCTION TO PARTNERSHIP

 

ACCOUNTS BOARD PAPERS WITH SOLUTION

 

MARCH 2014, OCTOBER 2014, MARCH 2015, JULY 2015, MARCH 2016, JULY 2016.JULY 2017, MARCH 2017, MARCH 2018,  JULY 2018  MARCH 2019 MARCH 2020

 

IMPORTANT PRACTICE PAPER FOR BOARD EXAM 2020

 

ACCOUNTS SAMPLE PAPER ONE  

ACCOUNTS SAMPLE PAPER TWO

ACCOUNTS SAMPLE PAPER THREE

OBJECTIVE QUESTIONS

ANSWER IN ONE SENTENCE EACH

SELECT THE MOST APPROPRIATE ALTERNATIVE

WRITE THE WORD/ TERM / PHRASE

STATE TRUE OR FALSE

No comments:

Post a Comment

PDF FILE TO YOUR EMAIL IMMEDIATELY PURCHASE NOTES & PAPER SOLUTION. @ Rs. 50/- each (GST extra)

HINDI ENTIRE PAPER SOLUTION

MARATHI PAPER SOLUTION

SSC MATHS I PAPER SOLUTION

SSC MATHS II PAPER SOLUTION

SSC SCIENCE I PAPER SOLUTION

SSC SCIENCE II PAPER SOLUTION

SSC ENGLISH PAPER SOLUTION

SSC & HSC ENGLISH WRITING SKILL

HSC ACCOUNTS NOTES

HSC OCM NOTES

HSC ECONOMICS NOTES

HSC SECRETARIAL PRACTICE NOTES

2019 Board Paper Solution

HSC ENGLISH SET A 2019 21st February, 2019

HSC ENGLISH SET B 2019 21st February, 2019

HSC ENGLISH SET C 2019 21st February, 2019

HSC ENGLISH SET D 2019 21st February, 2019

SECRETARIAL PRACTICE (S.P) 2019 25th February, 2019

HSC XII PHYSICS 2019 25th February, 2019

CHEMISTRY XII HSC SOLUTION 27th, February, 2019

OCM PAPER SOLUTION 2019 27th, February, 2019

HSC MATHS PAPER SOLUTION COMMERCE, 2nd March, 2019

HSC MATHS PAPER SOLUTION SCIENCE 2nd, March, 2019

SSC ENGLISH STD 10 5TH MARCH, 2019.

HSC XII ACCOUNTS 2019 6th March, 2019

HSC XII BIOLOGY 2019 6TH March, 2019

HSC XII ECONOMICS 9Th March 2019

SSC Maths I March 2019 Solution 10th Standard11th, March, 2019

SSC MATHS II MARCH 2019 SOLUTION 10TH STD.13th March, 2019

SSC SCIENCE I MARCH 2019 SOLUTION 10TH STD. 15th March, 2019.

SSC SCIENCE II MARCH 2019 SOLUTION 10TH STD. 18th March, 2019.

SSC SOCIAL SCIENCE I MARCH 2019 SOLUTION20th March, 2019

SSC SOCIAL SCIENCE II MARCH 2019 SOLUTION, 22nd March, 2019

XII CBSE - BOARD - MARCH - 2019 ENGLISH - QP + SOLUTIONS, 2nd March, 2019


BUY FROM PLAY STORE

DOWNLOAD OUR APP


HOW TO PURCHASE OUR NOTES?



S.P. Important Questions For Board Exam 2020


O.C.M. Important Questions for Board Exam. 2020


Economics Important Questions for Board Exam 2020


Chemistry Important Question Bank for board exam 2020


Physics – Section I- Important Question Bank for Maharashtra Board HSC Examination


Physics – Section II – Science- Important Question Bank for Maharashtra Board HSC 2020 Examination


MUST REMEMBER THINGS on the day of Exam


Are you prepared? for English Grammar in Board Exam.


Paper Presentation In Board Exam


How to Score Good Marks in SSC Board Exams


Tips To Score More Than 90% Marks In 12th Board Exam


How to write English exams?


How to prepare for board exam when less time is left


How to memorise what you learn for board exam


No. 1 Simple Hack, you can try out, in preparing for Board Exam

How to Study for CBSE Class 10 Board Exams Subject Wise Tips?

JEE Main 2020 Registration Process – Exam Pattern & Important Dates

NEET UG 2020 Registration Process Exam Pattern & Important Dates

How can One Prepare for two Competitive Exams at the same time?

8 Proven Tips to Handle Anxiety before Exams!