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प्रश्न
Fully convertible debentures are converted into __________ shares on maturity.
पर्याय
(a) equity
(b) deferred
(c) bonus
उत्तर
Fully convertible debentures are converted into equity shares on maturity.
APPEARS IN
संबंधित प्रश्न
Pass necessary journal entries in the following cases
Kay Ltd. converted 3,000, 12% debentures of Rs 100 each issued at a premium of 10% into equity shares of Rs 100 each issued at a premium of 25%.
What is meant by a 'Share' ? Give any two differences between 'Preference Shares' and 'Equity Shares'.
From the following information, calculate any two of the following ratios:
(a) Debt-Equity Ratio
(b) Working Capital Turnover Ratio and
(c) Return on Investment
Information: Equity Share capital Rs 10,00,000, General Reserve Rs 1,00,000; Profit and Loss Account after tax and interest Rs 3,00,000; 12% Debenture Rs 4,00,000; Creditors Rs 3,00,000; Land and Building Rs 13,00,000; Furniture Rs 3,00,000; Debtors Rs 2,00,00 and Cash Rs 1,10,000 and Preliminary expenses Rs 1,00,000
Sales for the year ended 31-3-2011 was Rs 30,00,000. Tax Paid 50%.
Draft a letter of allotment of shares to the applicant.
State, with reason, whether the following statement is True or False.
Preference shareholders do not enjoy normal voting rights.
Define Equity Shares and explain its features.
Write notes on Features of equity shares.
Match the correct pairs
| Group A | Group B |
| (a) Fixed Capital | 1) Share Certificate holder |
| (b) Equity share Capital | (2) Share warrant holder |
| (c) Share Certificate | (3) Investment in current assets |
| (D) Debentures | (4) Investment in fixed assets |
|
(e) Dividend warrant |
(5)Redeemable capital |
| (6) Permanent Capital | |
| (7) Bearer Document | |
| (8) Registered Document | |
| (9) Interest | |
| (10) Dividend at a fixed rate |
A company must issue __________ shares.
Long Answer Question
What is a ‘Preference Share’? Describe the different types of preference shares.
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 :
|
|
Equity Shares |
Preference Shares |
|
On Application |
Rs 3 per share |
Rs 3 per share |
|
On Allotment |
Rs 5 per share |
Rs 4 per share |
|
|
(including a premium) |
|
|
On First Call |
Rs 4 per share |
Rs 3 per share |
All the shares were fully subscribed, called-up and paid. Record these transactions in the journal and cash book of the company:
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.
Raja 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 --- ₹ 5 per share, On first and final call --- Balance. |
Applications for 70,000 shares were received . Allotment was made to all applicants on pro rata basis. Excess money received on application was adjusted towards sums due on allotment . Ramesh, who had applied for 700 shares , did not pay the allotment money and on his failure to pay the allotment money his shares were forfeited. Afterwards , the first and the final call was made . Adhar, who had been allotted 500 shares, did not pay the first and final call . His shares were also forfeited . Out of the forfeited shares 900 shares were reissued at ₹ 8 per share as fully paid-up . The reissued shares included all the shares of Ramesh.
Pass necessary journal entries for the above transactions in the books of the company.
Equity shares and Preference shares.
What is meant by participating preference shares?
On the basis of information given by Aradhana Ltd., prepare a Cash Flow Statement for the year ending 31st March 2021:
| Aradhana Ltd. Balance Sheet as on 31st March, 2021 | |||
| Particulars | Note No. | 31st March, 2020 | 31st March, 2021 |
| I. Equity and Liabilities | |||
| 1. Shareholder’s Funds | |||
| (a) Share Capital | 5,00,000 | 7,30,000 | |
| (b) Reserves and Surplus | 1 | 3,50,000 | 3,70,000 |
| 2. Non-current Liabilities | |||
| Long-term Borrowings | 2 | 4,00,000 | 2,00,000 |
| 3. Current Liabilities | |||
| (a) Trade Payables | 3 | 3,60,000 | 4,60,000 |
| (b) Short Term provisions | 4 | 3,25,000 | 3,20,000 |
| Total | 19,35,000 | 20,80,000 | |
| II. Assets | |||
| 1. Non-current Assets | |||
| (a)Fixed Assets | 5 | ||
| (i) Tangible Assets | 6 | 4,50,000 | 5,00,000 |
| (ii) Intangible Assets | 3,10,000 | 3,02,000 | |
| (b)Long-term Loans and Advances | 4,00,000 | 4,30,000 | |
| 2. Current Assets | |||
| (a) Inventories | 2,70,000 | 2,90,000 | |
| (b) Trade Receivables | 2,40,000 | 2,60,000 | |
| (c) Cash and Cash Equivalents | 2,65,000 | 2,98,000 | |
| Total | 19,35,000 | 20,80,000 | |
Note to Accounts
| Particulars | 31st March 2020 | 31st March 2021 |
| 1. Reserves and Surplus Statement of Profit and loss | 3,50,000 | 3,70,000 |
| 2. Long-term Borrowings 10% Debentures | 4,00,000 | 2,00,000 |
| 3. Trade Payables | ||
| Creditors | 2,40,000 | 2,60,000 |
| Bills Payable | 1,20,000 | 2,00,000 |
| 3,60,000 | 4,60,000 | |
| 4. Short-Term Provisions Provision for Tax | 3,25,000 | 3,20,000 |
| 5. Tangible Fixed Assets | ||
| Machinery | 5,50,000 | 6,60,000 |
| Less: Provision for Depreciation | 1,00,000 | 1,60,000 |
| 4,50,000 | 5,00,000 | |
| 6. Intangible Fixed Assets Patents | 3,10,000 | 3,02,000 |
Additional Information:
- Debentures were redeemed on 1st April,2020.
- Tax paid during the year ₹2,80,000.
When Equity Shares dominate the capital structure, the capital is considered as high geared.
Anjum is a first-time investor wanting to invest 10 lakhs in long term capital appreciation. She is willing to take risks in return for high growth.
Which type of security should she invest in? Suggest any four features of this type of security.
