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Question
Give one word / Term / phrase for the following statement :
Shares having voting right.
Solution
Equity Shares
Explanation: Shares issued with voting rights are termed as equity or ordinary shares. Equity shareholders have residual claims in the earnings of a company. In other words, in the event of liquidation (winding up), equity shareholders are paid after payment to preference shareholders has been made.
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RELATED QUESTIONS
Ganesh Ltd. is registered with an authorised capital of Rs 10, 00, 00,000 divided into equity shares of Rs 10 each. Subscribed and fully paid up capital of the company was Rs 6,00,00, 000. For providing employment to the local youth for the development of the tribal areas of Arunachal Pradesh the company decided to Set up hydropower plants there. The company also decided to Open skill development centres in Itanagar, pasighat and Tawang. To meet its new financial requirements, the company decided to issue 1,00,000 equity shares of Rs 10 each and 1,00,000, 9% debentures of Rs 100 each. The debentures were redeemable after five years at par. The issue of shares and debentures was fully subscribed. A shareholder holding 2,000 shares failed to pay the final call of Rs 2 per share.
Show the share capital in the Balance Sheet of the company as per the provisions of Schedule III of the Companies Act, 2013; also identify any two values that the company wishes to propagate
Disha Ltd purchased machinery from Nisha Ltd. and paid to Nisha Ltd. as follows :
1) By issuing 10,000 equity shares of Rs 10 each at a premium of 10%
2) By issuing 200, 9% debentures of Rs 100 each at a discount of 10%.
3) Balance by accepting a bill of exchange of Rs 50,000 payable after one month.
Pass necessary journal entries in the books of Disha Ltd. for the purchase of machinery and making payment to Nisha Ltd.
VXN Ltd invited application for issuing 50,000 equity shares of 10 each as a premium of 8 per share. The amount was payable as follows :
On Application: Rs 4 per share (including Rs 3 premiums)
On Allotment: Rs 6 per share (including Rs 3 premiums)
On First Call: Rs 5 per share (including Rs 1 premium)
On second and final Call: Balance Amount
The issue was fully subscribed Gopal a shareholder holding 200 shares did not pay the allotment money and Madhav, a holder of 400 shares paid his entire share money along with the allotment money. Gopal’s Shares were immediately forfeited after allotment, Afterwards, the first call was made Krishna, a holder of 100 shares, failed to pay the first call money and Giridhar, a holder of 300 shares, paid the second call money also along with the first call. Krishna’s shares were forfeited immediately after the first call. A second and final call was made afterwards and was duly received. All the forfeited shares were reissued at Rs 9 per share fully paid up.
Pass necessary journal entries for the above transaction in the books of the company.
Nirman Ltd. issued 50,000 equity shares of Rs 10 each. The amount was payable as follows :
On application - Rs 3 per share
On allotment - Rs 2 per share
On first and final call - The balance
Applications for 45,000 shares were received and shares were allotted to all the applicants. Pooja, to whom 500 shares were allotted; paid her entire share money at the time of allotment, whereas Kundan did not pay the first and final call on his 300 shares. The amount received at the time of making first and final call was:
(1) Rs 2,25,000
(2) Rs 2,20,000
(3) Rs 2,21,000
(4) Rs 2,19,500
Pass necessary journal entries in the given case
Pharma Ltd. redeemed 2,500, 12% debentures of Rs 100 each issued at a discount of 6% by converting them into equity shares of Rs 100 each issued at a premium of 25%.
Pass necessary journal entries in the following cases
Jain Ltd. converted 2,000, 12% debentures of Rs 100 each issued at an into equity share of Rs 100 each issued at a premium of 25%.
Pass necessary journal entries for the following transactions in the books of Gopal Ltd:
Purchased a running business from Aman Ltd, for a sum of Rs 15,00,000. The payment of Rs 12,00,000 was made by issue of fully paid equity shares of Rs 10 each and balance by a bank draft. The assets and liabilities consisted of the following: Plant Rs 3,50,000; Stock Rs 4,50,000; Land and Building Rs 6,00,000; Sundry Creditors Rs 1,00,000
Madhav Ltd. issued fully paid equity shares of Rs 80 each at a discount of Rs 5 per share for the purchase of a running business from Gupta Bros. for a sum of Rs 15,00,000. The assets and liabilities consisted of the following : Plant Rs 5,00,000; Trucks Rs 7,00,000; Stock Rs 3,00,000; Machinery Rs 6,00,000 and Sundry Creditors Rs 5,00,000. You are required to pass necessary journal entries for the above transactions in the books of Madhav Ltd.
Moneyplus Company issued for public subscription 75,000 shares of the value of Rs 10 each at a discount of 10% payable as follows: Rs 2 per share on an application, Rs 3 per share on an allotment and Rs 4 per share on call. The company received applications for 1,50,000 shares. The allotment was done as under:
a. Applicants of 15,000 shares were allotted 5,000 shares.
b. Applicants of 70,000 shares were allotted 40,000 shares.
c. Remaining applicants were allotted 30,000 shares.
Money in excess to allotment was returned. Hari, a shareholder who had applied for 3,500 shares out of group B failed to pay allotment and call money. Rohan, a shareholder who was allotted 3,000 shares paid the call money along with the allotment. Rohan also belonged to group B. Pass necessary journal entries to record the above transactions in the books of the company. Show your working notes clearly.
VXN Ltd. invited applications for issuing 50,000 equity shares of Rs 10 each at a premium of Rs 8 per share. The amount was payable as follows:
On Allotment Rs 6 per share (including Rs 3 premium).
On First Call Rs 5 per share (including Rs 1 premium).
On Second and Final Call – Balance Amount.
The issue was fully subscribed. Gopal, a shareholder holding 200 shares, did not pay the allotment money and Madhav, a holder of 400 shares, paid his entire share money along with the allotment money. Gopal's shares were immediately forfeited after allotment. Afterwards, the first call was made. Krishna, a holder of 100 shares, failed to pay the first call money and Girdhar, a holder of 300 shares, paid the second call money also along with the first call. Krishna's shares were forfeited immediately after the first call. Second and final call was made afterwards and was duly received. All the forfeited shares were reissued at Rs 9 per share fully paid up.
Pass necessary Journal Entries for the above transactions in the books of the company.
Amar, Ram, Mohan and Sohan were partners in a firm sharing profits in the ratio of 2 : 2 : 2 : 1. On 31st January, 2017 Sohan retired. On Sohan's retirement the goodwill of the firm was valued at Rs 70,000. The new profit sharing ratio between Amar, Ram and Mohan was agreed as 5 : 1 : 1.
Showing your working notes clearly, pass necessary Journal Entry for the treatment of goodwill in the books of the firm on Sohan's retirement.
(a) The Debt-Equity ratio of a company is 1 : 2. State with reason which of the following transactions would (i) increase; (ii) decrease or (iii) not change the ratio:
(1) Issued equity shares of Rs 1,00,000.
(2) Obtained a short-term loan from bank Rs 1,00,000.
(b) From the following information compute 'Total Assets to Debt Ratio:
| Rs. | |
| Long Term Borrowings Long Term Provisions Current Liabilities Non-Current Assets Current Assets |
3,00,000 1,50,000 75,000 5,40,000 1,35,000 |
Shyam Ltd. invited applications for issuing 80,000 Equity Shares of Rs 10 each at a premium of Rs 40 per share. The amount was payable as follows:
On Application Rs 35 per share (including Rs 30 Premium)
On Allotment Rs 8 per share (including Rs 4 Premium)
On First and Final Call − Balance
Applications for 77,000 shares were received. Shares were allotted to all the applicants. Sundram to whom 7,000 shares were allotted failed to pay the allotment money. His shares were forfeited immediately after allotment. Afterwards the first and final call was made. Satyam the holder of 500 shares failed to pay the first and final call. His shares were also forfeited. Out of the forfeited shares 1,000 shares were re-issued at Rs 50 per share fully paid up. The re-issued shares included all the shares of Satyam.
Pass necessary Journal Entries for the above transactions in the books of Shyam Ltd.
Jain Ltd. Invited applications for issuing 35,000 Equity Shares of Rs 10 each at a discount o
10%. The amount was payable as follows:
On Application Rs 5 per share.
On Allotment Rs 3 per share
On First and Final Call − Balance
Applications for 50,000 shares were received. Applications for 8,000 shares were rejected and the application money of these applicants was refunded. Shares were allotted on pro-rata basis to the remaining applicants and the excess money received with applications from these applicants was adjusted towards sums due on allotment. Jeevan who had applied for 600 shares failed to pay allotment and first and final call money. Naveen the holder of 400 shares failed to pay first and final call money. Shares of Jeevan and Naveen were forfeited. Of the forfeited 800 shares were re-issued at Rs 15 per share fully paid up. The re-issued shares included all the shares of Naveen.
Pass necessary Journal Entries for the above transactions in the books of Jain Ltd.
Y Ltd. purchased furniture costing Rs 1,35,000 from AB Ltd. The payment was made by issue of Equity Shares of Rs 10 each at a discount of Re 1 per share. Pass necessary Journal entries in the books of Y Ltd.
On the basis of the following information, calculate:
(i) Debt-Equity Ratio and
(ii) Working Capital Turnover Ratio
Information
|
Particulars |
Amount Rs |
|
Net Sales |
60,00,000 |
|
Cost of goods sold |
45,00,000 |
|
Other current assets |
11,00,000 |
|
Current liabilities |
4,00,000 |
|
Paid up share capital |
6,00,000 |
|
6% Debentures |
3,00,000 |
|
9% Loan |
1,00,000 |
|
Debentures Redemption Reserve |
2,00,000 |
|
Closing Stock |
1,00,000 |
Goodluck Ltd. purchased machinery costing Rs 10,00,000 from Fair Deals Ltd. The company paid the price by issue of Equity shares of Rs 10 each at a premium of 25%. Pass necessary journal entries for the above transaction in the books of Goodluck Ltd.
R.K. Ltd. invited applications for issuing 70,000 Equity Shares of Rs 10 each at a premium of Rs 35 per share. The amount was payable as follows:
On Application Rs 15 per share (including Rs 12 Premium)
On Allotment Rs 10 per share (including Rs 8 Premium)
On First and Final Call − Balance
Applications for 65,000 shares were received and allotment was made to all the application. A shareholder, Ram who was allotted 2,000 shares were failed to pay the allotment money. His shares were forfeited immediately after allotment. Afterwards the first and final call was made. Sohan, who had 3000 shares failed to pay the first and final call. His shares were also forfeited. Out of the forfeited shares 4,000 shares were re-issued at Rs 50 per share fully paid up. The re-issued shares included all the shares of Ram.
Pass necessary Journal Entries for the above transactions in the books of R.K. Ltd.
Answer in one Sentence only :
What do you understand by Pro-rata allotment of shares?
HR Limited issued 10,000 equity shares @ ₹ 10 each at 10% premium. All shares were subscribed and amount was received. Identity the amount to be transferred to Securities Premium Reserve A/c.
Which of the following is not a purpose for which the Securities Premium amount can be used ?
Based on the below information, you are required to answer the following question:
|
Nidiya Limited was incorporated on 1st April 2017 with a registered office in Mumbai. The capital clause of the memorandum of Association reflected a registered capital of 8,00,000 equity shares of ₹ 10 each and 1,00,000 preference shares of ₹ 50 each. Since some large investments were required for building and machinery the company in consultation with vendors, M/s VPS Enterprises, issued 1,00,000 equity shares and 20,000 preference shares at par with them in full consideration of assets acquired. Besides this, the company issued 2,00,000 equity shares for cash at par payable as ₹ 3 on application, 2 on the allotment, 3 on the first call and 2 on the second call. Till date, the second call has not yet been made and all the shareholders have paid except Mr. Ajay who did not pay allotment and calls on his 300 shares and Mr. Vipul who did not pay the first call on his 200 shares. Shares of Mr. Ajay were then forfeited and out of the 100 shares were reissued at ₹ 12 per share. |
How many equity shares of the company have been subscribed?
Based on the below information you are required to answer the following question:
| The directors of Bhagat and Company Ltd. issued 50,000 equity shares of ₹ 10 each at ₹ 12 per share, payable as ₹ 5 on application including the premium, ₹ 4 on allotment and the balance on final call. Applications were received for 70,000 shares out of which applications for 8,000 shares were rejected and their money was refunded. Money overpaid on application was applied towards sums due on allotment. All the money were duly received except from one shareholder holding 500 shares who failed to pay the final call money. |
What is the amount to be received on the Allotment of shares?
Based on the below information you are required to answer the following question:
| The directors of Bhagat and Company Ltd. issued 50,000 equity shares of ₹ 10 each at ₹ 12 per share, payable as ₹ 5 on application including the premium, ₹ 4 on allotment and the balance on final call. Applications were received for 70,000 shares out of which applications for 8,000 shares were rejected and their money was refunded. Money overpaid on application was applied towards sums due on allotment. All the money were duly received except from one shareholder holding 500 shares who failed to pay the final call money. |
How much money is still not paid up on the allotted shares?
If equity share of ₹ 10 each is issued at ₹ 12 each, it is called:
Assertion (A): A Company is Registered with an authorised Capital of 5,00,000 Equity Shares of ₹ 10 each of which 2,00,000 Equity shares were issued and subscribed. All the money had been called up except ₹ 2 per share which was declared as ‘Reserve Capital’. The Share Capital reflected in balance sheet as ‘Subscribed and Fully paid up’ will be Zero.
Reason (R): Reserve Capital can be called up only at the time of winding up of the company.
