Quiz about COMPANY-ACCOUNTS-ISSUE-OF-SHARES IN GENERAL AWARENESS

Question 1

A company issued 4000 equity shares of Rs. 10 each at par payable as under On application Rs. 3 on allotment Rs. 2 on first call Rs. 4 and on final call Rs. 1 per share. Applications were recived for 10000 shares. Allotment was made pro-rata. How much amount will be recived in cash on allotment ?A. Rs. 8000B. Rs. 12000C. NilD. None

Accepted Answer

NA

Question 2

Alfa Ltd. issued 5000 shares of Rs. 100 each at par. The amount payqable was as under  Rs. 25 on application Rs. 25 on allotment Rs. 20 on first call and Rs. 30 on final call. The company did not make final call. X a holder of 100 shares failed to pay allotment and first call money. Directors forfeited his shares and immediately re-issued the forfeited shares at Rs. 6500. Pass Journal entries in the books of the company and show the Share Capital in the Balance Sheet.

Accepted Answer

NA

Question 3

X Ltd. was registerd with an authorised capital of 200000 shares of Rs. 10 each. It purchased assets of Y Ltd. for Rs. 300000 and issued fully paid shares for purchase consideration. It also invited applications for 120000 shares payable as under  Rs. 2.50 on application Rs. 2.50 on allotment Rs. 2 on first call and Rs. 3 on final call. Sarkar who had been allotted 400 shares failed to pay the final call. His shares were forfited and re-issued at Rs. 8.50 per share as fully paid up. Pass entries in the Cash Book and Journal. Show the Share Capital in the Balance Sheet of the Company.

Accepted Answer

NA

Question 4

A Company invited applications for 5000 shares of Rs. 100 each. The amount is payable as follows  `(On ApplicationRs. 20 per share)(On AllotmentRs. 30 per share)(On First CallRs. 20 per share)(On Second and Final CallRs. 30 per share)` Applications werer recieved for 8000 shares. Applications for 1000 shares were rejected and pro-rata allotment was made to the remaining applicants. All calls were made and duly except  (i) Ganesh the holder of 200 shares paid the two calls with allotment. (ii) Shiva the holder of 300 shares failed to pay the first and second call money. Pass necessary journal entries to record the above transactions.

Accepted Answer

NA

Question 5

Govind Ltd. issued a prospectus inviting application Rs. 5 on allotment (including premium) Rs. 2 on First call and Rs. 2 on Final call. Applications were received for 27000 shares. Directors allotted the shares as follows  `(To applicants of 16000 shares.................full allotment)(To applicants of 6000 shares.................4000 shares)(To applicants of 5000 shares.................Nil)` Give entries in the Cash Book and Journal assuming that all sums due on allotment and calls have been received.

Accepted Answer

NA

Question 6

Amrit Ltd. issued 50000 shares of Rs. 10 each at a premium of Rs. 2 per share payable as Rs. 3 on application Rs. 4 on allotment (including premium) Rs. 2 on first call and the remaining on second call. Applications were received for 75000 shares and a pro-rata allotment was made to all the applicants. All moneys due were received except allotment and first call from Soun who applied for 1200 shares. All his shares were forfeited. The forfeited shares were reissued for Rs. 9600. Final call was not made. Pass the necessary journal entries.

Accepted Answer

NA

Question 7

X Ltd. invited applications for 50000 Equity Shares of Rs. 10 each payable Rs. 3.50 on application Rs. 5 on allotment (including premium Rs. 2.50) and Rs. 4 on first and final call. The company received applications for 65000 shares. It was decided  (a) to refuse allotment to the applicants for 5000 shares (b) to allot in full to the applicants for 20000 shares (c ) to allot balance of the available shares pro-rata among the other applicants and (d) to utilise the excess application money in part payament of allotment money. All the money due was received except from one applicant to whom shares had been allotted on pro-rata basis. He failed to pay allotment and call money and his 300 shares were forfeited. These shares were re-issued at Rs. 9 as fully paid. Give journal entries to record the above transactions in the books of the company.

Accepted Answer

NA

Question 8

Jay Ltd. issued a prospectus inviting applications for 100000 shares of Rs. 10 each. These shares were issued at par on the following terms  On application Rs. 2.50 on allotment Rs. 2.50 on first call Rs. 3 and on final call the balance. Applications were received for 135000 shares. Allotments were made on the following basis  (i) To applicants for 25000 shares - in full (ii) To applicants for 60000 shares - 45000 shares To applicants for 50000 shares - 30000 shares All excess amount paid on applicantion is to be adjusted against amount due on allotment. The shares were fully called and paid-up except the amount of allotment first and final call not paid by those who applied for 4000 shares of the group applying for 50000 shares. All the shares on which calls were not paid were forfeited by the Board of Directors. 1800 forfeited shares were re-issued as fully paid on receipt of Rs. 9 per share. Prepare Cash Book and Journal entries to record the above.

Accepted Answer

NA

Question 9

A company issued 10000 shares of Rs. 10 each at as premium of Rs. 1 per per share payment to be made as follows  `(Rs.)(On Application3)(On Allotment4 (including premium))(On First call2)(On Second and final call2)` Applications were received for 20000 shares. Applications for 5000 shares were rejected and allotment was made proportionately to the remaining applicants. The directors made both the calls and all the money were received except the allotment first call and final call on 400 shares which were subsequently forfeited. Later 300 of the forfeited sharesd were re-issued as fully paid @ Rs. 15 per share. Give journal entries to record the above.

Accepted Answer

NA

Question 10

New Industries Limited issued a prospects inviting applications for 100000 shares of Rs. 10 each at a premium of Rs. 5 per share payable as follows On Application Rs. 4.50 On Allotment Rs. 7.50 (including Premium) On Ist Call Rs. 2.00 and On Final Call Rs. 1.00. Applications were recieved for 125000 shares and allotment was made pro-rata to the applicants of 120000 shares the remaining applications being refused. Money received in excess on the application was adjusted towards the amount due on allotment. D to whom 2000 shares were allotted fasiled to pay allotment money and on his failure to pay the first call his shares were forfeited. M the holder of 3000 shares failed to pay the to calls and so his shares were also forfeited. All these shares were sold to R credited as fully paid for Rs. 8 per share. Pass Cash Book and journal entries (with narrations) to record the above issue of shares by the company.

Accepted Answer

NA

Question 11

X Ltd. issued shares for Rs. 2000000 divided into shares of Rs. 10 each at a premium of Rs. 5 per share payable as under  `(On ApplicationRs. 4 per share)(On AllotmentRs. 6 (including premium of Rs. 3))(On First Final CallBalance)` Excess application money was to be adjusted against allotment and first and final call and the money on rejected applications was to be returned. The issue was oversubscribed to extent of 80000 shares and the allotment was made as follows  (i) Applicants of 100000 shares were allotted 30% shares aspplicants for 10000 shares were rejected and the remaining applicants were given full allotment. All the money was duly received. Give journal entries.

Accepted Answer

NA

Question 12

The subscribed capital of a company is Rs. 8000000 and the nominal value of the share is Rs. 100 each. There were no calls in arrear till the finall call was made. The final call made was paid on 77500 shares only. The balance in the calls in arrear amount to Rs. 62500. Calculate the final call on share.A. Rs. 7B. Rs. 20C. Rs. 22D. Rs. 25

Accepted Answer

NA

Question 13

X Ltd. invited applied for issuing 75000 equity shares of Rs. 10 each at a premium of Rs. 5 per share. The amount was payable as follows  On application and allotment - Rs. 9 per share (including premium) On first and fina lcall - the balance amount. Applications for 300000 shares were received. Applications for 200000 shares were rejected and money refunded. Shares were allotted on pro-rata basis to the remaining applicants. The first and final call was made. The amount was duly received except on 1500 shares applied by Ravi. His share were forfeited. The forfeited shares were re-issued at a discount of Rs. 4 per share. Excess application and allotment money can be utilised for calls. Pass necessary journal entries for the above transactions in the books of X Ltd.

Accepted Answer

NA

Question 14

XYZ Limited has an aAuthorised Capital of Rs. 400000 divided into shares of Rs. 20 each the whole of which is issued and subscribed at a premium of Rs. 2 per share. The amount was payable as follows On Application and Allotment Rs. 10 per share On 1st Call Rs. 4 per share (including premium) and the balance as and when required. The company made both the calls. The application and allotment money was duly received. But a shareholder holding 200 shares failed to pay both the calls and his shares were forfeited. These shares were later re-issued at Rs. 14 per share as fully paid. Give journal entries regarding the above.

Accepted Answer

NA

Question 15

Pushkar Ltd. invited applications for issuing 500000 equity shares of Rs. 10 each at apremium of Rs. 3 per share. The whole amount was payable on application. The issue was fully subscribed. Pass necessary journal entries.

Accepted Answer

NA

Question 16

X Ltd. invited applications for issuing 80000 equity shares of Rs. 10 each at a premium of Rs. 2 share. The amount wass payable as follows  On application Rs. 6 (including premium) per share. On allotment Rs. 3 per share. Balance of first and final call. Applications for 90000 shares were received. Applications for 5000 shares were rejected and pro-rata allotment was made to the remaining applications. Over payaments received on application was adjusted towards sums due on allotment. All calls were allotted to Vijay. These shares were forfeited and the forfeited shares were re-issued for Rs. 18400 fully paid up. Pass necessary journal entries in the books of the company.

Accepted Answer

NA

Question 17

Luxury Cars Ltd. invited applications for issuing 10000 equity shares of Rs. 50 each at a premium of Rs. 100 per share. The amount was payable as follows  On application - Rs. 75 per share (including Rs. 50 premium) On allotment - The balance The issue was fully subscribed. A shareholder holding 400 shares paid his entire share money at the time of application. Another shareholder holding 300 shares did not pay the allotment money. His shares were forfeited. The forfwited shares were later on re-issued for Rs. 9 per share as fully paid up. Pass necessary journal entries for the above transactions in the books of the company.

Accepted Answer

NA

Question 18

Nitro Paints Ltd. invited applications for issuing 160000 equity shares of Rs. 10 each at a premium of Rs. 3 per share. The amount was payable as follows  On application - Rs. 6 per share (including premium Rs. 1) On allotment - Rs. 3 per share (including premium Rs. 1) the balance - on first final call Applications for 180000 shares received. Applications for 10000 shares were rejected and pro-rata allotment was made to the remaining applicants. Over payment on application were adjusted towards sums due on allotment. All calls were made and were duly received except allotment and final call from Aditya who was allotted 3200 shares. His shares were forfeited. Half of the forfeited shares were re-issued for Rs. 43000 as fully paid up. Pass necessary journal entries for the above transactions in the books of Nitro Paints Ltd.

Accepted Answer

NA

Question 19

Zee Limited was registered with a capital of Rs. 2000000. divided into 80000 shares of Rs. 25 each. The Company offered to the public for subscription 40000 shares payable Rs. 7.50 per share on Application Rs. 7.50 per share on allotment and the balance in two calls of equal amounts. The company received applications for 46400 shares. Applications for 400 shares were rejected altogether and the application money was returned to the applicants. A person who applied for 4000 shares was allotted only 1600 shares and the excess of his application money was carried forward rowards the payment to allotment and calls. Make Journal entries to record the above issue of shares.

Accepted Answer

NA

Question 20

Y Ltd. foreited 2000 shares of Rs. 10 each issued at 20% premium (to be paid at time of allotment) on which allotment money of Rs. 4 (including premium) and first call money of Rs. 3 was not received the final call money of Rs. 2 is not yet called 1500 of these shares were re-issued as fully paid for Rs. 7 per share. Journalise.

Accepted Answer

NA

Question 21

X Ltd. invited applications for issuing 500000 equity shares of Rs. 10 each at par. The amount per share was payable as follows  On Application Rs. 1 per share On Allotment Rs. 2 per share On First call Rs. 3 per share On Second and Final Call - Balance. Applications for 800000 shares were received. Applications for 100000 shares were rejected and pro-rata allotment was made to the remaining applicants. Excess money received with applications was adjusted towards sums due on allotment. All calls were made. Ashok a shareholder holding 5000 shares failed to pay the allotment and the call money. Mohan a shareholder who had applied for 7000 shares failed to pay the first and second and final call. Shares of Ashok and Mohan were forfeited after the second and final call. Of the forfeited shares 8000 shares were re-issued at Rs. 12 per share fully paid up. The re-issued shares included all the forfeited shares of Ashok. Pass necessary journal entries for the above transactions in the books of X Ltd.

Accepted Answer

NA

Question 22

Shiva Ltd. invited applications for issuing 200000 Equity Shares of Rs. 100 each at a premium of Rs. 60 per share. The amount was payable as follows  On application Rs. 30 per share (including premium Rs. 10). On allotment Rs. 70 per share (including premium Rs. 50). On first and final call the balance amount. Applications for 190000 shares were received. Shares were allotted to all the applicants and he company received all money due on allotment except Jain who had been alloted 1000 shares and his shares were immediately forfeited. Afterwards first and final call was made. Gupta did not pay the first and final call on his 2000 allotted shares. His shares were also forfeited. 50% of the forfeited shares of both Jain and Gupta were re-issued for Rs. 90 per share fully paid up. Pass necessary journal entries in the books of Shiva Ltd. for the above trnsactions.

Accepted Answer

NA

Question 23

Pass necessary journal entries for the following transactions in the books of Gopal Ltd.  (i) Purchased furniture for Rs. 250000 from Ms Furniture Mart. The payment to Ms Furniture Mart was made by issuing equity shares of Rs. 10 each at a premium of 25%. (ii) Purchased a running business from Aman Ltd. for a sum of Rs. 1500000. The payment of Rs. 1200000 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. 350000 Stock Rs. 450000 Land and Building Rs. 600000 Sundry Creditors Rs. 100000.

Accepted Answer

NA

Question 24

Raja Ltd. forfeited 400 shares of Rs. 25 each (Rs. 20 called up) held by Asha for non-payament of allotment money of Rs. 10 per share (including Rs. 5 per share premium) and the first call of Rs. 6 per share. Out of these 300 shares were reissued to X as Rs. 20 called up for Rs. 16 per share. Give journal entries for forfeiture and reissue of shares.

Accepted Answer

NA

Question 25

R Ltd. forfeited 600 shares of Rs. 100 each Rs. 70 called up on which Mahesh has paid application and allotment money of Rs. 50 per share. Of these 400 shares were re-issued to Naresh as fully paid-up for Rs. 110 per share. What is the amount to be transferred to Capital Reserve ?A. Rs. 30000B. Rs. 36000C. Rs. 24000D. Rs. 20000

Accepted Answer

NA

Question 26

Z Ltd. forfeited 1200 shares of Rs. 100 each issued at a premium of 30% to Dinesh on which he had paid application money of Rs. 50 per share and allotment money of Rs. 50 per share (including premium) for non-payment of a first call of Rs. 10 per share. Out of these 500 shares were re-issued as fully paid for Rs. 105 per share. Journalise.

Accepted Answer

NA

Question 27

X Ltd. forfeited 1500 shares of Rs. 10 each (originally issued at a premium of Rs. 3 per share which was payable along with application money) on which allotment money of Rs. 3 and first call money of Rs. 2 were not received the final call money of Rs. 3 is not yet called. These shares were originally allotted on pro-rata basis in the ratio of 3 2. These shares were subsequenty reissued at a discount of Rs. 1 per share credited as Rs. 7 paid up. Pass necessary Journal entries for forfeiture and reissue of shares.

Accepted Answer

NA

Question 28

500 shares of Rs. 10 each issued at a premium of Rs. 1 on which Rs. 8 (including premium) was called and Rs. 6 (including premium) was paid have been forfeited. 400 of these shares were re-issued as fully paid in such a way that Rs. 800 were transferred to capital reserve. Journalise.

Accepted Answer

NA

Question 29

Kanpur Gas Ltd. issued 40000 equity shares of Rs. 10 each at a premium of Rs. 1 per share. Amount were payable as follows  Rs. 2.50 on Application Rs. 4.50 on Allotment (including premium) Rs. 2 on First Call and Rs. 2 on Final Call. Applications were received for 37000 shares. Give Journal Entries assuming that all sums have been received on due dates.

Accepted Answer

NA

Question 30

Tagore Ltd. purchased a running business from Tulsi Bros. for a sum of Rs. 4800000 payable by the issue of fully paid equity shares of Rs. 20 each at a premium of 20%. The assets and liabilities consisted of the following  `(Rs.)(Plant nd Machinery2500000)(Stock1500000)(Sundry Debtors1500000)(Sundry Creditors300000)` Pass the necessary journal entries in the books of Tagore Ltd.

Accepted Answer

NA

Question 31

Nikhil Ltd. purchased a running business from Sonia Ltd. for a sum of Rs. 2200000 by issuing 20000 fully paid equity shares of Rs. 100 each at a premium of 10%. The assets and liabilities consisted of the following  Machinery Rs. 700000 Debtors Rs. 250000 Stock Rs. 500000 Building Rs. 1150000 and Bills Payable Rs. 250000. Pass necessary Journal entries in the books of Nikhil Ltd. for the above transactions.

Accepted Answer

NA

Question 32

B Ltd. forfrited 300 shares of Rs. 100 each Rs. 70 called up for non-payment of first call of Rs. 20 per share. Out of these 200 shares were reissued for Rs. 60 per share as Rs. 70 paid up. What is the amount to be transferred to Capital Reserve Account ?A. Rs. 13000B. Rs. 8000C. Rs. 2000D. Rs. 7000

Accepted Answer

NA

Question 33

X Ltd. forfeited 400 shares of Rs. 20 each Rs. 15 called up on which application and allotment money of Rs. 11 per share has been received. Of these 100 shares were re-issued as fully paid-up for Rs. 24 per share. What is the amount to be transferred to Capital Reserve ?A. Rs. 1500B. Rs. 4400C. Rs. 1100D. Rs. 3500

Accepted Answer

NA

Question 34

Z Ltd. forfeited 700 shares of Rs. 100 each issued at a premium of 30% to Ghanshyam on which he had paid application money of Rs. 35 per share for non-payment of allotment money of Rs. 50 per share (including premium) and first call of Rs. 15 per share. Out of these 400 shares were re-issued as Rs. 70 paid-up for Rs. 65 per share. Journalise.

Accepted Answer

NA

Question 35

Vaibhav Ltd. issued 20000 equity shares of Rs. 10 each at Rs. 250 payable as follows  `(Rs.)(On Application100 (including premium Rs. 60))(On Allotment50 (including premium Rs. 30))(On First Call70 (including premium Rs. 40))(On Second & Final Call30 (including premium Rs. 20))` All amounts were received except first and second & final call on 750 shares held by Mr. Akash. His shares were forfeited and 23 rd of these shares were reissued to Mr. Dinesh at Rs. 200 per share. Pass entries for forfeiture and reissue.

Accepted Answer

NA

Question 36

The directors of a company forfeited 1000 equity shares of Rs. 10 each (fully called) on which Rs. 400 had been paid. 400 of these shares were re-issued upon payment of Rs. 3000. Journalise the transactions of forfeiture and re-issue of shares.

Accepted Answer

NA

Question 37

2000 shares of Rs. 10 on which Rs. 7 has been called and Rs. 5 been paid are forfeited. Out of these 1500 shares are re-issued for Rs. 9 as fully paid. What is the amount to be transferred to Capital Reserve Account ?A. Rs. 6000B. Rs. 7500C. Rs. 10000D. Rs. 8500

Accepted Answer

NA

Question 38

Pass journal entries for the forfeiture and re-issue in the following cases  (a) X Ltd. forfeited 700 shares of Ashok of Rs. 10 each Rs. 8 called-up on which had paid Rs. 5 share. Out of these 500 shares were re-issued for Rs. 9 per shar as fully paid. (b) Y Ltd. forfeited 400 shares of Rs. 10 each Rs. 6 called-up for non-payment of first call of Rs. 2 per share. Out of these 300 shares were immediately re-issued Rs. 5 per share. (c ) Z Ltd. forfeited 300 shares of Rs. 100 each on which first call of Rs. 20 per share was not received the second and final call of Rs. 30 per share has not yet been called. Out of these 200 shares were re-issued as Rs. 70 paid-up for Rs. 55 per share.

Accepted Answer

NA

Question 39

Prayuj Ltd. forfeited 2000 shares of Rs. 10 each fully called up on which they had received only Rs. 14000.50 of the forfeited shares were reissued for RS. 9 per share fully paid up. Pass necessary journal entries for foreiture and re-issue of shares. Also prepare share forfeited account.

Accepted Answer

NA

Question 40

Pass journal entries for the forfeiture and re-issue in the following cases  (i) A Ltd. forfeited 100 shares of Rs. 10 each fully called-up foe non-payment of first call of Rs. 3 per share and final call of Rs. 3 per share. All of these shares were re-issued as fully paid for Rs. 10 per share. (ii) B Ltd. forfeited 400 shares of Rs. 10 each fully called-up for non-payment of final call of Rs. 3 per share. 300 of these shares were re-issued as fully paid for Rs. 8 per share. (iii) C Ltd. forfeited 700 shares of Rs. 10 each fully called-up on which the holder has paid application money @ Rs. 3 and allotment money @ Rs. 2 per share. Out of these 300 shares were re-issued as fully paid @ Rs. 7 per share. (iv) D Ltd. forfeited 1000 shares of Rs. 10 each fully called-up on which the holder has paid only the application money @ Rs. 3 per share. Out of these 600 shares were re-issued at Rs. 10.50 per share fully paid up.

Accepted Answer

NA

Question 41

Nirman Ltd. issued 50000 equity shares of Rs. 10 each. The amount was payable as follows  `(On applicationRs. 3 per share)(On allotmentRs. 2 per share)(On first and final callThe Balance)` Applications for 45000 shares were received and shares were allotted to all the applications. Pooja to whom 500 shares were allotted paid her entrie share money at the time of allotment whereas Kundan did not pay the first and final call on his 300 shares. What was the amount received at the time of making first and final call ?

Accepted Answer

NA

Question 42

Journalise the following  (i) A Ltd. forfeited 1000 shares of Rs. 10 each Rs. 8 paid for non-payment of final call of Rs. 2 per share. Out of these 400 shares were re-issued as fully paid-up in such a way that Rs. 2000 were transferred to capital reserve. (ii) B Ltd. forfeited 1000 shares of Rs. 10 each Rs. 8 called-up for non-payment of Allotment of Rs. 2.50 per share and first call of Rs. 3 per share. Out of these 400 shares were re-issued for Rs. 7 per share as Rs. 8 paid-up. (iii) C Ltd. forfeited 300 shares of Rs. 10 each on which Rs. 7 has been called and Rs. 5 has been paid. Out of these 100 shares are re-issued for Rs. 6 share as Rs. 7 paid-up.

Accepted Answer

NA

Question 43

(i) Vishesh Ltd. forfeited 1000 Equity Shares of Rs. 10 each issued at a premium of Rs. 2 per share for non-payment of allotment money of Rs. 5 per share including premium. The final call of Rs. 2 per share was not yet called on these shares. Of the forfeited shares 800 shares were reissued at Rs. 12 per share fully paid-up. The remaining shares were reissued at Rs. 11 per share fully paid up. (ii) G. Ltd. forfeited 7000 equity shares of Rs. 100 each for the non-payment of first call of Rs. 30 per share. These shares were issued at a premium of Rs. 30 per share. The second and final call of Rs. 20 per share was not yet made. The forfeited shares were re-issued at Rs. 80 per share fully paid up.

Accepted Answer

NA

Question 44

Y Ltd. forfeited 400 shares of Rs. 10 each Rs. 7 called up for non-payment of first call of Rs. 2 per share. Out of there 300 shares were reissued for Rs. 6 per share as Rs. 7 paid up. What is the amount to be transferred to Capital Reserve Account ?A. Rs. 1700B. Rs. 1200C. Rs. 2100D. Rs. 300

Accepted Answer

NA

Question 45

Determine the maximum permissible discount which a company can allow at the time of reissue of forfeited shares in the following cases  (i) A share of Rs. 100 originally issued at par on which appllication and allotment money of Rs. 60 has been received. (ii) A share of Rs. 100 originally issued at a permium of Rs. 20 on which application and allotment money (including premium) of Rs. 60 has been received. (iii) A share of Rs. 100 originally issued at a premium of Rs 20 on which application and allotment money (excluding premium) of Rs. 60 has been received.

Accepted Answer

NA

Question 46

C Ltd. forfeited 300 shares of Rs. 10 each issued at 20% premium (to be paid at the time of allotment) for non-payment of allotment money of Rs. 4 per share (including premium) first call of Rs. 3 per share and final call of Rs. 2 per share. Out of these 200 shares were re-issued as fully paid-up at a discount of Rs. 3 per share. Journalise.

Accepted Answer

NA

Question 47

X Ltd. forfeited 1000 shares of Rs. 20 each issued at a premium of Rs. 2 per share to Ashok (Rs. 18 called-up) on which he did not pay allotment of Rs. 6 (including premium) and Ist Call of Rs. 4. Give Journal Entries for forfeiture and re-issue in the following cases  (i) 600 shares were re-issued to Mohan at Rs. 14 per share as Rs. 18 paid up (ii) 200 share to Sohan as fully paid-up for Rs. 4 share and (iii) 200 shares to Suresh as fully paid-up for Rs. 10 per share at different intervals of time.

Accepted Answer

NA

Question 48

Y Ltd. forfeited 100 equity shares of Rs. 10 each for the non-payment of first call of Rs. 2 per share. The final call of Rs. 2 per share was yet to be made. Calculate the maximum amount of discount at which these shares can be re-issued.

Accepted Answer

NA

Question 49

X Ltd. forfeited 800 shares of Rs. 20 each issued at a premium of Rs. 2 per share to Mahesh (Rs. 18 called-up) on which he did not pay first call of Rs. 4. Of these 300 shares were re-issued @ Rs. 15 per share as Rs. 18 paid-up. Journalise.

Accepted Answer

NA

Question 50

E Ltd. had allotted 10000 shares to the applicants of 14000 shares on pro-rata basis. The amount payable on application was Rs. 2. F applied for 420 shares. The number of shares allotted and the amount carried forward for adjustment against allotment money due from F will be A. 60 shares Rs. 120B. 340 shares Rs. 160C. 320 shares Rs. 200D. 300 shares Rs. 240

Accepted Answer

NA

Explore topic-wise InterviewSolutions in .

Pushkar Ltd. invited applications for issuing 5,00,000 equity shares of Rs. 10 each at apremium of Rs. 3 per share. The whole amount was payable on application. The issue was fully subscribed. Pass necessary journal entries.

500 shares of Rs. 10 each, issued at a premium of Rs. 1 on which Rs. 8 (including premium) was called and Rs. 6 (including premium) was paid, have been forfeited. 400 of these shares were re-issued as fully paid in such a way that Rs. 800 were transferred to capital reserve. Journalise.

The directors of a company forfeited 1,000 equity shares of Rs. 10 each (fully called) on which Rs. 4,00 had been paid. 400 of these shares were re-issued upon payment of Rs. 3,000. Journalise the transactions of forfeiture and re-issue of shares.

2,000 shares of Rs. 10, on which Rs. 7 has been called and Rs. 5 been paid, are forfeited. Out of these, 1,500 shares are re-issued for Rs. 9 as fully paid. What is the amount to be transferred to Capital Reserve Account ?A. Rs. 6,000B. Rs. 7,500C. Rs. 10,000D. Rs. 8,500

Prayuj Ltd. forfeited 2,000 shares of Rs. 10 each, fully called up, on which they had received only Rs. 14,000.50 of the forfeited shares were reissued for RS. 9 per share fully paid up. Pass necessary journal entries for foreiture and re-issue of shares. Also prepare share forfeited account.

Y Ltd. forfeited 400 shares of Rs. 10 each, Rs. 7 called up, for non-payment of first call of Rs. 2 per share. Out of there, 300 shares were reissued for Rs. 6 per share as Rs. 7 paid up. What is the amount to be transferred to Capital Reserve Account ?A. Rs. 1,700B. Rs. 1,200C. Rs. 2,100D. Rs. 300

Y Ltd. forfeited 100 equity shares of Rs. 10 each for the non-payment of first call of Rs. 2 per share. The final call of Rs. 2 per share was yet to be made. Calculate the maximum amount of discount at which these shares can be re-issued.

X Ltd. forfeited 800 shares of Rs. 20 each issued at a premium of Rs. 2 per share to Mahesh (Rs. 18 called-up) on which he did not pay first call of Rs. 4. Of these, 300 shares were re-issued @ Rs. 15 per share as Rs. 18 paid-up. Journalise.

1.	A company issued 4,000 equity shares of Rs. 10 each at par payable as under : On application Rs. 3, on allotment Rs. 2, on first call Rs. 4 and on final call Rs. 1 per share. Applications were recived for 10,000 shares. Allotment was made pro-rata. How much amount will be recived in cash on allotment ?A. Rs. 8,000B. Rs. 12,000C. NilD. None
Answer» Correct Answer - C

2.	Alfa Ltd. issued 5,000 shares of Rs. 100 each at par. The amount payqable was as under : Rs. 25 on application, Rs. 25 on allotment, Rs. 20 on first call, and Rs. 30 on final call. The company did not make final call. X, a holder of 100 shares, failed to pay allotment and first call money. Directors forfeited his shares and immediately re-issued the forfeited shares at Rs. 6,500. Pass Journal entries in the books of the company and show the Share Capital in the Balance Sheet.
Answer» Cash at Bank Rs. 3,52, 000, Share Capital Rs. 3,50,000, Capital Reserve Rs. 2,000.

3.	X Ltd. was registerd with an authorised capital of 2,00,000 shares of Rs. 10 each. It purchased assets of Y Ltd. for Rs. 3,00,000 and issued fully paid shares for purchase consideration. It also invited applications for 1,20,000 shares payable as under : Rs. 2.50 on application Rs. 2.50 on allotment Rs. 2 on first call and Rs. 3 on final call. Sarkar, who had been allotted 400 shares failed to pay the final call. His shares were forfited and re-issued at Rs. 8.50 per share as fully paid up. Pass entries in the Cash Book and Journal. Show the Share Capital in the Balance Sheet of the Company.
Answer» Cash at Bank Rs. 12,02,200 , Capital Reserve Rs. 2,200 .

4.	A Company invited applications for 5,000 shares of Rs. 100 each. The amount is payable as follows : `{:("On Application",,:,,"Rs. 20 per share"),("On Allotment",,:,,"Rs. 30 per share"),("On First Call",,:,,"Rs. 20 per share"),("On Second and Final Call",,:,,"Rs. 30 per share"):}` Applications werer recieved for 8,000 shares. Applications for 1,000 shares were rejected and pro-rata allotment was made to the remaining applicants. All calls were made and duly except : (i) Ganesh, the holder of 200 shares paid the two calls with allotment. (ii) Shiva, the holder of 300 shares failed to pay the first and second call money. Pass necessary journal entries to record the above transactions.
Answer» Net amount received on first call Rs. 90,000 and on Second Call Rs. 1,35,000.

5.	Govind Ltd., issued a prospectus inviting application, Rs. 5 on allotment (including premium), Rs. 2 on First call, and Rs. 2 on Final call. Applications were received for 27,000 shares. Directors allotted the shares as follows : `{:("To applicants of 16,000 shares",.................,"full allotment"),("To applicants of 6,000 shares",.................,"4,000 shares"),("To applicants of 5,000 shares",.................,"Nil"):}` Give entries in the Cash Book and Journal, assuming that all sums due on allotment and calls have been received.
Answer» Cash at Bank Rs. 2,60,000 .

6.	Amrit Ltd., issued 50,000 shares of Rs. 10 each at a premium of Rs. 2 per share payable as Rs. 3 on application, Rs. 4 on allotment (including premium), Rs. 2 on first call and the remaining on second call. Applications were received for 75,000 shares and a pro-rata allotment was made to all the applicants. All moneys due were received except allotment and first call from Soun who applied for 1,200 shares. All his shares were forfeited. The forfeited shares were reissued for Rs. 9,600. Final call was not made. Pass the necessary journal entries.
Answer» Amount received on Allotment Rs. 1,23,000, Capital Reserve Rs. 3,600.

7.	X Ltd., invited applications for 50,000 Equity Shares of Rs. 10 each, payable Rs. 3.50 on application, Rs. 5 on allotment (including premium Rs. 2.50), and Rs. 4 on first and final call. The company received applications for 65,000 shares. It was decided : (a) to refuse allotment to the applicants for 5,000 shares, (b) to allot in full to the applicants for 20,000 shares, (c ) to allot balance of the available shares pro-rata among the other applicants, and (d) to utilise the excess application money in part payament of allotment money. All the money due was received except from one applicant to whom shares had been allotted on pro-rata basis. He failed to pay allotment and call money and his 300 shares were forfeited. These shares were re-issued at Rs. 9 as fully paid. Give journal entries to record the above transactions in the books of the company.
Answer» Cash received on Allotment Rs. 2,13,850, Balance of Share Forfeiture A/c transferred to Capital Reserve Rs. 1,400 - Rs. 300 = Rs. 1,100.

8.	Jay Ltd. issued a prospectus inviting applications for 1,00,000 shares of Rs. 10 each. These shares were issued at par on the following terms : On application Rs. 2.50, on allotment Rs. 2.50, on first call Rs. 3 and on final call the balance. Applications were received for 1,35,000 shares. Allotments were made on the following basis : (i) To applicants for 25,000 shares - in full, (ii) To applicants for 60,000 shares - 45,000 shares To applicants for 50,000 shares - 30,000 shares All excess amount paid on applicantion is to be adjusted against amount due on allotment. The shares were fully called and paid-up except the amount of allotment, first and final call not paid by those who applied for 4,000 shares of the group applying for 50,000 shares. All the shares on which calls were not paid were forfeited by the Board of Directors. 1,800 forfeited shares were re-issued as fully paid on receipt of Rs. 9 per share. Prepare Cash Book and Journal entries to record the above.
Answer» Cash received on Allotment Rs. 1,60,500, Bank Balance Rs. 10,02,200, Capital Reserve Rs. 5,700.

9.	A company issued 10,000 shares of Rs. 10 each at as premium of Rs. 1 per per share, payment to be made as follows : `{:(,"Rs."),("On Application",3),("On Allotment","4 (including premium)"),("On First call",2),("On Second and final call",2):}` Applications were received for 20,000 shares. Applications for 5,000 shares were rejected and allotment was made proportionately to the remaining applicants. The directors made both the calls and all the money were received , except the allotment, first call and final call on 400 shares, which were subsequently forfeited. Later, 300 of the forfeited sharesd were re-issued as fully paid @ Rs. 15 per share. Give journal entries to record the above.
Answer» Bank Balance Rs. 1,11,900, Share Capitasl Rs. 99,000, Securities Premium Reserve Rs. 11,100, Capital Reserve Rs. 1,350, Balance left in Share Forfeiture A/c Rs. 450. Hint : Securities Premium Reserve Account has been debited in the entry of forfeiture because it is assumed that entire excess application money received on forfeited shares is utlised for share capital.

10.	New Industries Limited issued a prospects, inviting applications for 1,00,000 shares of Rs. 10 each at a premium of Rs. 5 per share, payable as follows : On Application Rs. 4.50 , On Allotment Rs. 7.50 (including Premium), On Ist Call Rs. 2.00 and On Final Call Rs. 1.00. Applications were recieved for 1,25,000 shares and allotment was made pro-rata to the applicants of 1,20,000 shares, the remaining applications being refused. Money received in excess on the application was adjusted towards the amount due on allotment. D, to whom 2,000 shares were allotted , fasiled to pay allotment money and on his failure to pay the first call, his shares were forfeited. M, the holder of 3,000 shares, failed to pay the to calls, and so his shares were also forfeited. All these shares were sold to R, credited as fully paid for Rs. 8 per share. Pass Cash Book and journal entries (with narrations) to record the above issue of shares by the company.
Answer» Cash at Bank Rs. 15,11,800, Cash received on allotment Rs. 6,46,800, Balance of Share Forfeiture A/c transferred to Capital Reserve Rs. 10,800 + Rs. 21,000 - Rs. 10,000 = Rs. 21,8000.

11.	X Ltd. issued shares for Rs. 20,00,000 divided into shares of Rs. 10 each at a premium of Rs. 5 per share, payable as under : `{:("On Application","Rs. 4 per share"),("On Allotment","Rs. 6 (including premium of Rs. 3)"),("On First Final Call","Balance"):}` Excess application money was to be adjusted against allotment and first and final call and the money on rejected applications was to be returned. The issue was oversubscribed to extent of 80,000 shares and the allotment was made as follows : (i) Applicants of 1,00,000 shares were allotted 30% shares, aspplicants for 10,000 shares were rejected and the remaining applicants were given full allotment. All the money was duly received. Give journal entries.
Answer» Amount transferred to Calls in Advance Account Rs. 1,00,000, Amount received on Allotment Rs. 10,20,000, Amount received on First & Final Call Rs. 9,00,000.

12.	The subscribed capital of a company is Rs. 80,00,000 and the nominal value of the share is Rs. 100 each. There were no calls in arrear till the finall call was made. The final call made was paid on 77,500 shares only. The balance in the calls in arrear amount to Rs. 62,500. Calculate the final call on share.A. Rs. 7B. Rs. 20C. Rs. 22D. Rs. 25
Answer» Correct Answer - D

13.	X Ltd. invited applied for issuing 75,000 equity shares of Rs. 10 each at a premium of Rs. 5 per share. The amount was payable as follows : On application and allotment - Rs. 9 per share (including premium) On first and fina lcall - the balance amount. Applications for 3,00,000 shares were received. Applications for 2,00,000 shares were rejected and money refunded. Shares were allotted on pro-rata basis to the remaining applicants. The first and final call was made. The amount was duly received except on 1,500 shares applied by Ravi. His share were forfeited. The forfeited shares were re-issued at a discount of Rs. 4 per share. Excess application and allotment money can be utilised for calls. Pass necessary journal entries for the above transactions in the books of X Ltd.
Answer» Amount received on First and Final Call Rs. 2,21,625, Capital Reserve Rs. 3,375. Hint : Securities Premium Reserve A/c will not be debited at the time of forfeiture of shares.

14.	XYZ Limited has an aAuthorised Capital of Rs. 4,00,000 divided into shares of Rs. 20 each, the whole of which is issued and subscribed at a premium of Rs. 2 per share. The amount was payable as follows : On Application and Allotment : Rs. 10 per share, On 1st Call Rs. 4 per share (including premium) and the balance as and when required. The company made both the calls. The application and allotment money was duly received. But a shareholder holding 2,00 shares failed to pay both the calls and his shares were forfeited. These shares were later re-issued at Rs. 14 per share as fully paid. Give journal entries regarding the above.
Answer» Capital Reserve Rs. 8,000. Hint : In this question Rs. 10 has been called on application and allotment jointly, therefore, following entries will be passed for application and allotment : `{:("Bank A/c Dr.","2,00,000",),(ul(" To Share Application & Allotment A/c "),," 2,00,000"),("Share Application & Allotment A/c Dr.","2,00,000",),(ul(" To Share Capital A/c "),," 2,00,000"):}`

15.	Pushkar Ltd. invited applications for issuing 5,00,000 equity shares of Rs. 10 each at apremium of Rs. 3 per share. The whole amount was payable on application. The issue was fully subscribed. Pass necessary journal entries.
Answer» Securities Premium Account will be credited by Rs. 15,00,000 .

16.	X Ltd., invited applications for issuing 80,000 equity shares of Rs. 10 each at a premium of Rs. 2 share. The amount wass payable as follows : On application Rs. 6 (including premium) per share. On allotment Rs. 3 per share. Balance of first and final call. Applications for 90,000 shares were received. Applications for 5,000 shares were rejected and pro-rata allotment was made to the remaining applications. Over payaments received on application was adjusted towards sums due on allotment. All calls were allotted to Vijay. These shares were forfeited and the forfeited shares were re-issued for Rs. 18,400 fully paid up. Pass necessary journal entries in the books of the company.
Answer» Amount received on allotment Rs. 2,05,800, Capital Reserve Rs. 7,000. Hint : Securities Premium Reserve will not be debited at the time of forfeiture of shares.

17.	Luxury Cars Ltd. invited applications for issuing 10,000 equity shares of Rs. 50 each at a premium of Rs. 100 per share. The amount was payable as follows : On application - Rs. 75 per share (including Rs. 50 premium) On allotment - The balance The issue was fully subscribed. A shareholder holding 400 shares paid his entire share money at the time of application. Another shareholder holding 300 shares did not pay the allotment money. His shares were forfeited. The forfwited shares were later on re-issued for Rs. 9 per share as fully paid up. Pass necessary journal entries for the above transactions in the books of the company.
Answer» Amount received on Application Rs. 7,80,000, On Allotment Rs. 6,97,500, Capital Reserve Rs. 7,500.

18.	Nitro Paints Ltd., invited applications for issuing 1,60,000 equity shares of Rs. 10 each at a premium of Rs. 3 per share. The amount was payable as follows : On application - Rs. 6 per share (including premium Rs. 1) On allotment - Rs. 3 per share (including premium Rs. 1) the balance - on first final call Applications for 1,80,000 shares received. Applications for 10,000 shares were rejected and pro-rata allotment was made to the remaining applicants. Over payment on application were adjusted towards sums due on allotment. All calls were made and were duly received except allotment and final call from Aditya who was allotted 3,200 shares. His shares were forfeited. Half of the forfeited shares were re-issued for Rs. 43,000 as fully paid up. Pass necessary journal entries for the above transactions in the books of Nitro Paints Ltd.
Answer» Amount received on allotment Rs. 4,11,600, Capital Reserve Rs. 8,600. Hint : Securities Premium Reserve A/c will be debited from Rs. 6,400 at the time of forfeiture of shares.

20.	Y Ltd. foreited 2,000 shares of Rs. 10 each issued at 20% premium (to be paid at time of allotment) on which allotment money of Rs. 4 (including premium) and first call money of Rs. 3 was not received, the final call money of Rs. 2 is not yet called 1,500 of these shares were re-issued as fully paid for Rs. 7 per share. Journalise.
Answer» Capital Reserve Nil. Hint : No entry will be passed for transferrin the Share Forfeiture A/c to Capital Reserve A/c.

22.	Shiva Ltd., invited applications for issuing 2,00,000 Equity Shares of Rs. 100 each at a premium of Rs. 60 per share. The amount was payable as follows : On application Rs. 30 per share (including premium Rs. 10). On allotment Rs. 70 per share (including premium Rs. 50). On first and final call the balance amount. Applications for 1,90,000 shares were received. Shares were allotted to all the applicants and he company received all money due on allotment except Jain who had been alloted 1,000 shares, and his shares were immediately forfeited. Afterwards first and final call was made. Gupta did not pay the first and final call on his 2,000 allotted shares. His shares were also forfeited. 50% of the forfeited shares of both Jain and Gupta were re-issued for Rs. 90 per share fully paid up. Pass necessary journal entries in the books of Shiva Ltd. for the above trnsactions.
Answer» Amount received on Allotment Rs. 1,32,30,000. Amount received on first and final call Rs. 1,12,20,000, Forfeiture amount Rs. 20,000 + Rs. 80,000, Capital Reserve Rs. 35,000. Hint : Securities Premium Reserve Reserve A/c will be debited from Rs. 50,000 at the time of forfeiture of 1,000 shares and it will not be debited at the time of forfeiture of 2,000 shares.

23.	Pass necessary journal entries for the following transactions in the books of Gopal Ltd. : (i) Purchased furniture for Rs. 2,50,000 from M/s Furniture Mart. The payment to M/s Furniture Mart was made by issuing equity shares of Rs. 10 each at a premium of 25%. (ii) 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.
Answer» (i) Number of shares issued 20,000 (ii) Goodwill Rs. 2,00,000.

24.	Raja Ltd., forfeited 400 shares of Rs. 25 each (Rs. 20 called up) held by Asha, for non-payament of allotment money of Rs. 10 per share (including Rs. 5 per share premium) and the first call of Rs. 6 per share. Out of these, 300 shares were reissued to X as Rs. 20 called up for Rs. 16 per share. Give journal entries for forfeiture and reissue of shares.
Answer» Capital Reserve Rs. 1,500.

26.	Z Ltd., forfeited 1,200 shares of Rs. 100 each, issued at a premium of 30% to Dinesh on which he had paid application money of Rs. 50 per share and allotment money of Rs. 50 per share (including premium), for non-payment of a first call of Rs. 10 per share. Out of these, 500 shares were re-issued as fully paid for Rs. 105 per share. Journalise.
Answer» Capital Reserve Rs. 35,000.

27.	X Ltd. forfeited 1,500 shares of Rs. 10 each (originally issued at a premium of Rs. 3 per share which was payable along with application money) on which allotment money of Rs. 3 and first call money of Rs. 2 were not received, the final call money of Rs. 3 is not yet called. These shares were originally allotted on pro-rata basis in the ratio of 3 : 2. These shares were subsequenty reissued at a discount of Rs. 1 per share, credited as Rs. 7 paid up. Pass necessary Journal entries for forfeiture and reissue of shares.
Answer» Amount transferred to Capital Reserve Rs. 5,250.

28.	500 shares of Rs. 10 each, issued at a premium of Rs. 1 on which Rs. 8 (including premium) was called and Rs. 6 (including premium) was paid, have been forfeited. 400 of these shares were re-issued as fully paid in such a way that Rs. 800 were transferred to capital reserve. Journalise.
Answer» Re-issued Price Rs. 7 per share. Hint : Entry for forfeiture will be : `{:("Share Capital A/c Dr. 3,500"),(" To Calls in Arrears A/c 1,000"),(" To Share Forfeiture A/c 2,500"):}`

29.	Kanpur Gas Ltd. issued 40,000 equity shares of Rs. 10 each at a premium of Rs. 1 per share. Amount were payable as follows : Rs. 2.50 on Application , Rs. 4.50 on Allotment (including premium), Rs. 2 on First Call and Rs. 2 on Final Call. Applications were received for 37,000 shares. Give Journal Entries assuming that all sums have been received on due dates.
Answer» Share Capital Rs. 3,70,000 , Cash at Bank Rs. 4,07,000 .

30.	Tagore Ltd. purchased a running business from Tulsi Bros. for a sum of Rs. 48,00,000 payable by the issue of fully paid equity shares of Rs. 20 each at a premium of 20%. The assets and liabilities consisted of the following : `{:(,"Rs."),("Plant nd Machinery","25,00,000"),("Stock","15,00,000"),("Sundry Debtors","15,00,000"),("Sundry Creditors","3,00,000"):}` Pass the necessary journal entries in the books of Tagore Ltd.
Answer» Goodwill Rs. 2,40,000, Number of shares issued 2,00,000 Premium on Issue of shares Rs. 8,00,000.

31.	Nikhil Ltd. purchased a running business from Sonia Ltd. for a sum of Rs. 22,00,000 by issuing 20,000 fully paid equity shares of Rs. 100 each at a premium of 10%. The assets and liabilities consisted of the following : Machinery Rs. 7,00,000, Debtors Rs. 2,50,000, Stock Rs. 5,00,000, Building Rs. 11,50,000 and Bills Payable Rs. 2,50,000. Pass necessary Journal entries in the books of Nikhil Ltd. for the above transactions.
Answer» Capital Reserve Rs. 1,50,000.

32.	B Ltd. forfrited 300 shares of Rs. 100 each, Rs. 70 called up, for non-payment of first call of Rs. 20 per share. Out of these, 200 shares were reissued for Rs. 60 per share as Rs. 70 paid up. What is the amount to be transferred to Capital Reserve Account ?A. Rs. 13,000B. Rs. 8,000C. Rs. 2,000D. Rs. 7,000
Answer» Correct Answer - B

34.	Z Ltd. forfeited 700 shares of Rs. 100 each, issued at a premium of 30% to Ghanshyam on which he had paid application money of Rs. 35 per share, for non-payment of allotment money of Rs. 50 per share (including premium) and first call of Rs. 15 per share. Out of these, 400 shares were re-issued as Rs. 70 paid-up for Rs. 65 per share. Journalise.
Answer» Capital Reserve Rs. 12,000.