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Question
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:
Solution
Books of A Ltd.
Journal
| Date | Particulars | L.F | Debirt Amount Rs | Credit Amount Rs |
|
Dr Equity Share Application A/c 10% Preference Share Application A/c To Equity Share Capital A/c To 10% Preference Share Capital A/c (Application money transferred to Equity Share Capital ) |
3,00,000
6,00,000
|
3,00,000
6,00,000 |
||
|
Equity Share Allotment A/c 10% Preference Share Allotment A/c To Equity Share Capital A/c To Securities Premium A/c To 10% Preference Share Allotment A/c (Amount due on allotment)
|
5,00,000
8,00,000
|
3,00,000
2,00,000 8,00,000 |
||
|
Equity Share First and Final Call A/c 10% Preference Share First and Final Call A/c To Equity Share Capital A/c To 10% Preference Share Capital A/c (Amount on first and final call due)
|
4,00,000 6,00,000
|
4,00,000
6,00,000 |
||
Cash Book( Bank Column)
| Date | Particulars | J.F | Amount Rs | Date | Particulars | J.F | Amount Rs |
| Equity Share Application | 3,00,000 | Balance c/d | 32,00,000 | ||||
| 10% Preference Share Application | 6,00,000 | ||||||
| Equity Share Allotment | 5,00,000 | ||||||
| 10% Preference Share Allotment | 8,00,000 | ||||||
| Equity Share First and Final Call |
4,00,000 |
||||||
| 10% Preference Share First & Final Call | 6,00,000 | ||||||
| 32,00,000 | 32,00,000 |
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Preference shares carry dividend at .......................... rate.
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|
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| (6) Permanent Capital | |
| (7) Bearer Document | |
| (8) Registered Document | |
| (9) Interest | |
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Long Answer Question
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Pass Journal entry.
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Pass necessary journal entries for the above transactions in the books of Sandesh Ltd.
Equity shares and Preference shares.
What is meant by participating preference shares?
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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.
Give any four types of Preferences shares.
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Which type of security should she invest in? Suggest any four features of this type of security.
