Advertisements
Advertisements
Question
Ankit Ltd. issued 20,000 equity shares of 10 each at a premium of ₹ 2 per share, payable as:
| On Application | : | ₹ 3 |
| On Allotment | : | ₹ 5 (including premium) |
| On First Call | : | ₹ 2 |
| On Second and Final Call | : | ₹ 2 |
Vijay was allotted 500 shares. Pass the necessary Journal entries relating to the forfeiture of shares in following cases.
| Case I | Vijay did not pay allotment money and his shares were immediately forfeited. |
| Case II | Vijay did not pay allotment and first call, his shares were forfeited after first call. |
| Case III | Vijay failed to pay first call and his shares were forfeited immediately. |
| Case IV | Vijay failed to pay both the calls and his shares were forfeited. |
Solution
Case I:
In the books of Ankit Ltd.
Journal
|
Date |
Particulars |
|
L.F. |
Debit Amount (₹) |
Credit Amount (₹) |
|
|
Share Capital A/c (500 × 6) |
Dr. |
3,000 |
|
|
|
|
Securities Premium Reserve A/c (500 × 2) |
Dr. |
1,000 |
|
|
|
|
To Share Forfeiture A/c (500 × 3) |
|
|
1,500 |
|
|
|
To Share Allotment A/c (500 × 5) |
|
|
2,500 |
|
|
|
(Being 500 shares forfeited for non-payment of allotment money) |
Case II:
In the books of Ankit Ltd.
Journal
|
Date |
Particulars |
|
L.F. |
Debit Amount (₹) |
Credit Amount (₹) |
|
|
Share Capital A/c (500 × 8) |
Dr. |
4,000 |
|
|
|
|
Securities Premium Reserve A/c (500 × 2) |
Dr. |
1,000 |
|
|
|
|
To Share Forfeiture A/c (500 × 3) |
|
|
1,500 |
|
|
|
To Share Allotment A/c (500 × 5) |
|
|
2,500 |
|
|
|
To Share First Call A/c (500 × 2) |
|
|
1,000 |
|
|
|
(Being 500 shares forfeited for non-payment of allotment and first call) |
|
|
Case III:
In the books of Ankit Ltd.
Journal
|
Date |
Particulars |
|
L.F. |
Debit Amount |
Credit Amount |
|
|
Share Capital A/c (500 × 8) |
Dr. |
4,000 |
|
|
|
|
To Share Forfeiture A/c (500 × 6) |
|
|
3,000 |
|
|
|
To Share First Call A/c (500 × 2) |
|
|
1,000 |
|
|
|
(Being 500 shares forfeited for non-payment of first call) |
|
|
|
Case IV:
In the books of Ankit Ltd.
Journal
|
Date |
Particulars |
|
L.F. |
Debit |
Credit |
|
|
Share Capital A/c (500 × 10) |
Dr. |
5,000 |
|
|
|
|
To Share Forfeiture A/c (500 × 6) |
|
|
3,000 |
|
|
|
To Share First Call A/c (500 × 2) |
|
|
1,000 |
|
|
|
To Share Second and Final Call (500 × 2) |
|
|
1,000 |
|
|
|
(Being 500 shares forfeited for non-payment of first and second call) |
|
|
|
APPEARS IN
RELATED QUESTIONS
Preference shares carry dividend at .......................... rate.
- Fixed
- Fluctuating
- Lower
Jain Ltd. converted 500, 8% debentures of Rs 100 each issued at a discount of 6% into equity shares of Rs 10 each issued at a premium of Rs 25 per share. Discount on issue of 8% debentures has not yet been written off. Showing your working notes clearly, pass necessary journal entries for conversion of 8% debentures into equity shares.
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%.
The shares which are issued to existing equty shareholders as a gift
Define 'preference shares'. Explain various types of preference shares.
Draft a letter of allotment of shares to the applicant.
Shares which are redeemed after a certain period of time.
State, with reason, whether the following statement is True or False.
Preference shareholders do not enjoy normal voting rights.
Write notes on Features of equity shares.
Write features of shares.
Write a word or terrn or phrase which can substitute each of
the following statements:
The value of share which is determined by demand and supply forces in the share market.
Select the proper option from the option given below and rewrite the sentences:
If a share of 100 is issued at 110. It is said to be issued at ___________.
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.
A company must issue __________ shares.
Bharat Ltd made the first call of ₹ 2 per share on its 1,00,000 Equity Shares on 1st March , 2006. Ashok, a shareholder, holding 800 shares paid the second and final call amount along with the first call money. The second and final call amount was ₹ 3 per share. Pass necessary journal entries for recording the above using the Calls-in Advance Account.
2,000 Equity Shares of ₹ 10 each were issued to Limited from whom assets of ₹ 25,000 were acquired .
Pass Journal entry.
'Amrit Dhara Ltd.' issued 800 Equity Shares of ₹ 100 each at a premium of 25% as fully paid-up in consideration of the purchase of plant and machinery of ₹ 1,00,000.
Pass entries in company's Journal.
State, with reason, whether the following statement is True or False.
Preference shareholders have normal voting rights.
Explain the features of preference shares.
Answer the question.
Explain the advantages of equity shares, as a source of finance.
Explain any three disadvantages of issuing equity shares, from the Company's point of view.
Which of the following statement is incorrect about Preference Shares?
The director of a company must be ______.
Equity Shares are ______.
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.
Give any four types of Preferences shares.
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.
