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Question
B' Ltd. took over the assets of Rs.14,00,000 and liabilities of Rs.4,00,000 of C Ltd. for a purchase consideration of Rs.9,19,000. Rs.17,000 were paid by a bank draft in favour of C Ltd. and the balance was paid by issue of equity shares of Rs.10 each at a premium of 10% in favour of C Ltd.
Pass necessary journal entries for the above transactions in the books of B Ltd.
Solution
Journal
| Date | Particulars | L.F. | Dr. (Rs) | Cr. (Rs) |
|
(i)
(ii)
|
Sundry Assets A/c Dr To Sundry Liabilities A/c To C Ltd To Capital Reserve A/c (Being assets and liabilities purchased of C Ltd)
C Ltd Dr To Equity Share Capital A/c To Securities Premium A/c To Bank A/c (Being 82,000 equity shares issued of Rs.10 each at a premium of Rs.1 per share and Rs.17,000 by bank draft) |
14,00,000
9,19,000
|
4,00,000 9,19,000 81,000
8,20,000 82,000 17,000
|
Working Notes:
WN1 : Calculation of Number of Equity Shares
`"Number of Shares Issued =""Purchase Consideration"/"Issue Price"`
`=(9,02,000)/11=82,000" equity shares"`
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RELATED QUESTIONS
If shares are issued at its face value, it is called as issue at
JS Ltd. invited applications for issuing 80,000 equity shares of Rs.10 each at a premium of Rs.6 per share. The amount was payable as follows:
On application - Rs.4 per share (including premium Rs.1 per share)
On Allotment - Rs.6 per share (including premium Rs.3 per share)
On First and Final Call — Balance
Applications for 1,60,000 shares were received. Applications for 40,000 shares were rejected and application money refunded. Shares were allotted on pro-rata basis to the remaining applicants. Excess money received with applications was adjusted towards sums due on allotment. Raman holding 400 shares failed to pay the allotment money. His shares were forfeited immediately after allotment. Afterwards the final call was made. Veer who had applied for 1,200 shares failed to pay the final call. His shares were also forfeited. Out of the forfeited shares 500 shares were re-issued at Rs.8 per share fully paid-up. The re-issued shares included all the forfeited shares of Raman.
Pass necessary journal entries for the above transactions in the books of J.S. Ltd.
RS Ltd. has issued 25000 equity shares of Rs. 10 each at a premium of Rs. 2 per hares payable with application money. The incomplete journal entries related to the issue are given below. You are required to complete these blanks.
Books of RS Ltd.
Journal
| Date | Particulars | L.F. | Dr.(Rs.) | Cr.(Rs.) |
|
2015 Jan 10
|
_ _ _ _ _ _ _ _ _ _ _ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ (Amount received on application for 35,000 shares @ Rs.5 per share) |
|||
|
Jan 16
|
_ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ To _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ To _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ To _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ (Transfer of application money to share capital securities premium, money refunded for 4,000 shares for rejected application and balance adjusted towards amount due on allotment as shares were allotted on Pro-rata basis) |
|||
|
Jan 31
|
_ _ _ _ _ _ _ _ _ _ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ (Amount due on allotment @ Rs.4 per share) |
|||
|
Feb 20
|
_ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ (Balance amount received on allotment) |
|||
|
April 01
|
_ _ _ _ _ _ _ _ _ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ (First and Final Call money due) |
|||
|
April 20
|
_ _ _ _ _ _ _ _ _ _ Dr Calls – in – arrears A/c Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ (Money received on First and Final Call except on 500 shares) |
|||
|
Aug 27
|
_ _ _ _ _ _ _ _ _ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ (Forfeited the shares on which call money was not received) |
|||
|
Oct 3
|
_ _ _ _ _ _ _ _ _ _ Dr _ _ _ _ _ _ _ _ _ _ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ (Re-issued the forfeited shares @ 8 per share fully paid - up) |
|||
| _ _ _ _ _ |
_ _ _ _ _ _ _ _ __ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ (_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ __ ) |
Sandesh Ltd. took over the assets of Rs.7,00,000 and liabilities of Rs.2,00,000 from Sanchar Ltd. for a purchase consideration of Rs.4,59,500. Rs.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.
BBG Ltd. had issued 1,00,000 equity shares of Rs.10 each at a premium of Rs.3 per share payable with application money. While passing the journal entries related to the issue, some blanks are left. You are required to complete these blanks.
Books of BBG Ltd
Journal
| Date | Particulars | L.F. | Dr.(Rs.) | Cr.(Rs.) |
|
2015 Jan 05
|
_ _ _ _ _ _ _ _ _ _ _ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ (Amount received on application for 1,40,000) shares @ Rs.6 per share including premium) |
|||
|
Jan 17
|
Equity Share Application A/c Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ To _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ To _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ To _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ (Transfer of application money to share capital securities premium, money refunded for 20,000 shares for rejected application and balance adjusted towards amount due on allotment as shares were allotted on Pro-rata basis) |
|||
|
Jan 17
|
_ _ _ _ _ _ _ _ _ _ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ (Amount due on allotment @ Rs.4 per share) |
|||
|
Feb 20
|
_ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ (Balance amount received on allotment) |
|||
|
April 01
|
_ _ _ _ _ _ _ _ _ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ (First and Final Call money due) |
|||
|
April 20
|
_ _ _ _ _ _ _ _ _ _ Dr Calls – in – arrears A/c Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ (Money received on First and Final Call) |
3,000
|
||
|
May 20
|
_ _ _ _ _ _ _ _ _ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ (Forfeited the shares on which call money was not received) |
|||
|
June 15
|
_ _ _ _ _ _ _ _ _ _ Dr _ _ _ _ _ _ _ _ _ _ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ (Re-issued the forfeited shares) |
3,000
|
||
| _ _ _ _ _ |
_ _ _ _ _ _ _ _ __ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ (_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ __ ) |
Y. Ltd forfeited 1,00 equity shares of Rs 10 each for the non-payment of the first call of Rs 2 per share. The final call of Rs2 per share was yet to be made.
Calculate the maximum amount of discount at which these shares can be reissued.
X Ltd invited applications for issuing 500, 12 % debentures of `100 each at a discount of 5%. These debentures were redeemable after these years at par. Applications for 600 debentures were received. Prorata allotment was made to all the applications.
Pass necessary journal entries for the issue of debentures assuming that the whole amount was payable with application.
State any three conditions for the issue of shares at discount.
What is meant by ' Securities Premium '?
Pass necessary journal entries for the following transactions in the books of Sewak Ltd.:
(i) Sewak Ltd. acquired assets of Rs 5,00,000 and liabilities of Rs 3,00,000 of Goodwill Ltd. for a purchase consideration of Rs 1,35,000. Payment to Goodwill Ltd. was made by issuing equity shares of 10 each at a discount of 10%.
(ii) Purchase furniture of Rs 5,00,000 from Ramprastha Ltd. The payment to Ramprastha Ltd. was made by issuing equity shares of Rs 10 each at a premium of 25%.
Give one word / Term / phrase for the following statement :
Issue of share above face value.
Select the most appropriate answer from the alternatives given below and rewrite the sentence :
If shares are issued at its face value, it is called as issue at __________________.
Select the most appropriate answer from the alternatives given below and rewrite the sentence :
The excess price received over the par value of shares, should be ___________ to securities premium a/c.
(Issue at premium and calls in arrears)
Hindusthan Petroleum Ltd., invited application for 40,000 Equity shares of Rs 100 each payable as under including 20% premium:
| On Application | Rs 30 | On Allotment | Rs 40 (including premium) |
| On First Call | Rs 20 | On Final Call | Rs 30 |
All the shares were applied for and also allotted. One share holder who was allotted 500 shares failed to pay first and final call.
Record the above transactions in the journal of the company.
(Issue at discount and Pro-rate allotment)
Global IT Ltd. issued 1,00,000 shares of 10 each at a discount of 10% payable as follows-
| On Application | Rs 3 | On Allotment | Rs 3 (Discount) |
| On First Call | Rs 2 | On Second Call | Rs 1 |
Public applied for 1,20,000 shares and the directors made pro-rata allotment to the applicants.
Show the journal of the company assuming that all money received on allotment and calls.
