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Question
Pass necessary journal entries in the books of Z Ltd. for the following transaction:
The company has a balance of ₹ 60,000 in securities premium reserve account. Loss on issue of debentures ₹ 1,00,000 was written off as per the provisions of the Companies Act. 2013.
Solution
| In the books of Z limited Journal Entries |
||||
| Date | Particular | L.F. | Dr. (₹) | Cr. (₹) |
| Securities Premium Reserve A/c ...Dr. | 60,000 | - | ||
| Statement of Profit & Loss ...Dr. | 40,000 | - | ||
| To Loss on Issue of Debentures A/c | - | 1,00,000 | ||
| (Being loss on issue of debentures written off first securities by Premium Reserve then by Statement of Profit of Loss.) | ||||
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Following is the Balance Sheet of J.M. Ltd. as at 31.3.2016:
|
J.M. Ltd. Balance Sheet as at 31.3.2016 |
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|
Particulars |
NoteNo. |
31.03.2016 (Rs) |
31.03.2015 (Rs) |
|
I. Equity and Liabilities : (1) Shareholder's Funds: |
|||
|
(a) Share Capital |
2,25,000 |
1,75,000 |
|
|
(b) Reserves and Surplus |
1 |
62,500 |
25,000 |
|
(2) Non-current Liabilities: |
|||
|
Long-Term Borrowings |
2 |
1,12,500 |
87,500 |
|
(3) Current Liabilities: |
|||
|
(a) Short-term Borrowings |
3 |
37,500 |
18,750 |
|
(b) Short-term Provisions |
4 |
50,000 |
31,250 |
|
Total |
4,87,500 |
3,37,500 |
|
|
II. Assets: |
|||
|
(1) Non-current Assets: |
|||
|
(a) Fixed Assets: |
|||
|
(i) Tangible |
5 |
3,66,250 |
2,28,750 |
|
(ii) Intangible |
6 |
25,000 |
37,500 |
|
(b) Non-current Investments |
37,500 |
25,000 |
|
|
(2) Current Assets: |
|||
|
(a) Current Investments |
|
10,000 |
17,500 |
|
(b) Inventories |
7 |
30,500 |
18,000 |
|
(c) Cash and Cash Equivalents |
18,250 |
10,750 |
|
|
Total |
4,87,500 |
3,37,500 |
|
Notes to Accounts :
|
Note No. |
Particulars |
31.03.2016 (Rs) |
31.03.2015 (Rs) |
|
(1) |
Reserves and Surplus |
|
|
|
|
(Surplus i.e. Balance in the Statement of Profit and Loss) |
62,500 | 25,000 |
|
|
|
62,500 | 25,000 |
|
|
|
|
|
|
(2) |
Long-term Borrowings |
|
|
|
|
12% Debentures |
1,12,500 |
87,500 |
|
|
|
1,12,500 |
87,500 |
|
|
|
|
|
|
(3) |
Short-term Borrowings |
|
|
|
|
Bank overdraft |
37,500 | 18,750 |
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|
|
37,500 | 18,750 |
|
|
|
|
|
|
(4) |
Short-term Provisions |
|
|
|
|
Proposed Dividend |
50,000 | 31,250 |
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|
|
50,000 | 31,250 |
|
|
|
|
|
|
(5) |
Tangible Assets |
|
|
|
|
Machinery |
4,18,750 | 2,63,750 |
|
|
Accumulated Depreciation |
(52,500) | (35,000) |
|
|
|
3,66,250 | 2,28,750 |
|
|
|
|
|
|
(6) |
Intangible Assets |
|
|
|
|
Goodwill |
25,000 | 37,500 |
|
|
|
25,000 |
37,500 |
|
|
|
|
|
|
(7) |
Inventories |
|
|
|
|
Stock in Trade |
30,500 | 18,000 |
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|
30,500 | 18,000 |
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