Advertisements
Advertisements
Question
Sangam Ltd. invited applications for 10,000 Equity Shares of ₹ 100 each issued at par. The amount was payable on application. The issue was oversubscribed by 2,000 shares and allotment was made on pro rata basis. Pass necessary Journal entries.
Solution
In the books of Sangam Ltd.
Journal
|
Date |
Particulars |
|
L.F. |
Debit Amount (₹) |
Credit Amount (₹) |
| Bank A/c (12,000 × 100) |
Dr. |
12,00,000 |
|
||
| To Share Application and Allotment A/c (12,000 × 100) |
|
|
12,00,000 |
||
| (Being application money received on 12,000 equity shares) |
|
|
|
||
|
|
|
|
|||
| Share Application and Allotment A/c |
Dr. |
12,00,000 |
|
||
| To Share Capital A/c (10,000 × 100) |
|
|
10,00,000 |
||
| To Bank A/c (2,000 × 100) |
|
|
2,00,000 |
||
| (Being share application and allotment money adjusted for 10,000 shares and balance money refunded) |
|
|
|
Note: Since the entire amount is receivable on application so the excess money on 2,000 shares has been refunded and allotment is made on a pro-rata basis to 12,000 shareholders.
APPEARS IN
RELATED QUESTIONS
Equity Shares and Preference Shares.
Equity shareholders are real owners and controllers of the company
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%.
Jain Motors Ltd. converted its 200, 8% debentures of Rs 100 each issued at a discount of 6% into equity shares of Rs 10 each, issued at a premium of 25%. Discount on issue of 8% debentures has not yet been written off.
Showing your working notes clearly pass necessary Journal Entries on conversion of 8% debentures into 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.
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.
A person who purchases shares of a company is known as _______ of the company.
Write notes on Features of equity shares.
Write a letter to the debenture holder informing him/her about the conversion of debentures into 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.
What is equity share? Explain the feature of equity shares.
Equity shares are paid dividend at ____________ rate.
Match the correct pairs
| Group A | Group B |
| (a) Fixed Capital | 1) Share Certificate holder |
| (b) Equity share Capital | (2) Share warrant holder |
| (c) Share Certificate | (3) Investment in current assets |
| (D) Debentures | (4) Investment in fixed assets |
|
(e) Dividend warrant |
(5)Redeemable capital |
| (6) Permanent Capital | |
| (7) Bearer Document | |
| (8) Registered Document | |
| (9) Interest | |
| (10) Dividend at a fixed rate |
A company must issue __________ shares.
Long Answer Question
What is a ‘Preference Share’? Describe the different types of preference shares.
Discuss the process for the allotment of shares of a company in case of over subscription.
2,000 Equity Shares of ₹ 10 each were issued to Limited from whom assets of ₹ 25,000 were acquired .
Pass Journal entry.
Sure Ltd. purchased a running business from M/s. Rai Brothers for a sum of ₹ 15,00,000 payable ₹ 12,00,000 in fully paid shares of ₹ 10 each and balance through cheque.
The assets and liabilities consisted of the following:
| Plant and Machinery | ₹ 4,00,000 | Stock | ₹ 4,00,000 |
| Building | ₹ 4,00,000 | Cash | ₹ 3,00,000 |
| Sundry Debtors | ₹ 3,00,000 | Sundry Creditors | ₹ 2,00,000 |
You are required to pass necessary Journal entries in the company's books.
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.
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.
Write any four features of equity shares.
Which type of shares cannot be issued as per the Companies Act, 2013?
Which type of shares is not convertible?
Equity Shares are ______.
As per the Companies Act, 2013, companies cannot issue ______.
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.
