Advertisements
Advertisements
प्रश्न
What are preference shares?
उत्तर
As the name indicates, these shares have certain preferential rights distinct from those attached to equity shares. The shares that carry the following preferential rights are termed preference shares:
- A preferential right as to payment of dividends during the life time of the company.
- A preferential right as to the return of capital in the event of the winding up of the company.
The holder of a preference share has a prior right to receive a fixed rate of dividend before any dividend is paid to equity shares. The rate of dividend is prescribed at the time of issue.
Normally, preference shares do not carry any voting power. They have voting rights only on matters which affect their interest, such as selling of undertakings or changing rights of preference shares, etc., or they get voting rights if a dividend remains unpaid.
The preference shareholders are co-owners of the company but not controllers. These shares are purchased by cautious investors who are interested in the safety of investment and who want steady returns on investments.
संबंधित प्रश्न
What is meant by a 'Share' ? Give any two differences between 'Preference Shares' and 'Equity Shares'.
Jain Ltd. purchased Building for Rs 10,00,000 from Gupta Ltd. 10% of the payable amount was paid by a cheque drawn in favour of Gupta Ltd. The balance was paid by issue of Equity Shares of Rs 10 each at a discount of 10%.
Pass necessary Journal Entries in the books of Jain Ltd.
Define 'preference shares'. Explain various types of preference shares.
Draft a letter of allotment of shares to the applicant.
Write notes on Features of equity shares.
Write features of shares.
Write a word or term or phrase which can substitute each of the following statements:
Type of preference shares which can be redeemed after a certain period of time.
What is equity share? Explain the feature of equity shares.
Fully convertible debentures are converted into __________ shares on maturity.
Long Answer Question
What is a ‘Preference Share’? Describe the different types of preference shares.
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 share applied and excess application money adjusted into allotment. All money received due on allotment and call. Prepare journal and cash book.
Lennova Ltd. has authorised share capital of ₹ 1,00,00,000 divided into 1,00,000 Equity Shares of ₹ 100 each . It has existing issued and paid up capital of ₹ 25,00,000. It further issued to public 25,000 Equity Shares at a premium of 20% for subscription payable as under:
| On Application: | ₹ 30 |
| On Allotment: | ₹ 60 and |
| On Call: | Balance Amount. |
The issue was fully subscribed and allotment was made to all the applicants . The company did not make the call during the year.
Show share capital of the company in the Balance Sheet of the Company.
Rajan Ltd . purchased assets from Geeta & Co . for ₹ 5,00,000. A sum of ₹ 1,00,000 was paid by means of a bank draft and for the balance due Rajan Ltd. issued equity Shares of ₹ 10 each at a premium of 25%. journalise the above transactions in the books of the company.
Jain Ltd purchased machinery costing ₹ 10,00,000 from Ayer Ltd. 50% of the payment was made by cheque and for the remaining 50% , the company issued Equity Shares of ₹ 100 each at a premium of 25% . Pass necessary Journal entries in the books of Jain Ltd . for the above transaction.
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.
State, with reasons, whether the following statement is True or False
Handling demat shares is very time consuming.
State, with reason, whether the following statement is True or False.
Preference shareholders have normal voting rights.
SHARE STOCK
Explain the features of preference shares.
Write any four features of equity shares.
According to Companies Act company cannot issue its share at ________.
The director of a company must be ______.
As per the Companies Act, 2013, companies cannot issue ______.
When Equity Shares dominate the capital structure, the capital is considered as high geared.
