Wednesday, January 23, 2019

AHSEC Accountancy Question Bank: Accounting for Share Capital


AHSEC - Accounting for Share capital – Comprehensive Practical problems for March’ 2019 Exam
Average 22 marks expected from this chapter
MCQ – 2, Theoretical Question – 2+5, Practical problems – 5+8
A. Questions relating to Cash book and Balance sheet (Long Questions Carrying 8 Marks)
Issue of Shares
(Expected Marks: 1 + 1 + 2 + 5 + 5 + 8)
Comprehensive Practical Problems
Q. (2010). A. Ltd was registered with an authorised capital of 5, 00,000 divided into 50,000 Equity shares of Rs. 10 each. The company issued 30,000 shares to the public payable as follows:
On application Rs. 2 per share.
On allotment Rs. 3 per share and the balance in two equal calls.
The company received applications for 20,000 shares and received all the money except the final call on 200 shares held by Raju. Expenses on issue amounted to Rs. 500. Pass Journal entries and show how these figures will appear in the Balance Sheet of the company.
Q. (2012). Ashok Publications Ltd. issues 3,000 shares of Rs. 10 each, payable as follows:
On application Rs. 2
On allotment Rs. 3
On first call Rs. 2
And the balance when required.
            3,200 shares were applied for applications for Rs. 3,000 were accepted by the Directors and the balance applications were rejected and money returned. Allotment money was duly received and First call money was received on 2,950 shares. Pass Journal entries in the books of the company for the above transactions.
Q. (2014, 2016). Assam Tea Ltd. has an authorized capital of Rs. 10, 00,000/- divided into Rs. 1, 00,000 equity shares of Rs. 10/- each. The directors decided to issue 50,000 shares to the public at a premium of 10% payable as follows:
On Application Rs. 3/-
On Allotment (including premium) Rs. 5/-
And the balance on 1st and final call.
The company received applications for 60,000 shares. The directors decided to reject the excess applications and the money thereon was refunded. All the shares were duly subscribed for, called up and paid up. Give Journal entries and prepare a Cash Book in the books of the Company.         
Q. Assam Tea Ltd. has an authorized capital of Rs. 10, 00,000/- divided into Rs. 1, 00,000 equity shares of Rs. 10/- each. The directors decided to issue 50,000 shares to the public at a premium of 20% payable as follows:
On Application (including premium @ Rs. 1 per share) Rs. 3/-
On Allotment (including premium @ Rs. 1 per share) Rs. 5/-
And the balance on 1st and final call.
The company received applications for 60,000 shares. The directors decided to reject the excess applications and the money thereon was refunded. All the shares were duly subscribed for, called up and paid up. Give Journal entries and prepare a Cash Book in the books of the Company.                              
Q. (2015). X Ltd. Issued 2,000 shares of Rs. 100/- each at a premium of Rs. 20 payable as follows:
Rs. 30/- on Application.
Rs. 50/- on Allotment (including securities premium Rs. 20/-)
Rs. 40/- on First Call & Final Call.
All the shares were duly subscribed for, called up and paid up, except Miss Nitu who holding 300 shares failed to pay First & Final call money. Show entries in the Cash Book and Journal of the company for the above transactions.            
Q. (2011.)TCL Ltd. issued 12,000 equity shares of Rs. 10 each, payable Rs.2 On application, Rs. 3 on allotment, Rs. 3 on first call and balance in final call. All the share were applied and allotted. The company made up to first call. One share holder who was allotted 400 shares paid his entire amount on first call and another share holder who was allotted 300 shares failed to pay first call money. Journalise the above transaction in the books of the company.
Q. TCL Ltd. issued 12,000 equity shares of Rs. 10 each, payable Rs.2 On application, Rs. 3 on allotment, Rs. 3 on first call and balance in final call. All the share were applied and allotted. The company made up to first call. One share holder who was allotted 400 shares paid his entire amount on first call and another share holder who was allotted 300 shares failed to pay first call money which he paid with final call money. Final call is made after 2 months from the date of first call. Interest on arrear and calls in advance is charges as per Table “A”. Journalise the above transaction in the books of the company. Also prepare cash book and balance sheet.
Q. (2002). Guwahati Company Ltd. Issued 10,000 equity shares of Rs. 10 each at a premium of Rs. 2 per share payable as follows:
On application Rs. 3 per share.
On allotment Rs. 5 per share (including premium)
On first and final call Rs. 4 per share.
            All the shares were subscribed for and the allotment money was received in full. In due course the first and final call was made and the amount due was received with the exception of 100 shares. These 100 shares were forfeited and 50 of the forfeited shares were subsequently reissued as fully paid for a consideration of 8 per share. Give Journal entries in the books of   the company.
Q. (2005). ABC Ltd has issued 10,000 equity shares of Rs. 10 each at a premium of Rs. 2 each. Payable as follows:
Rs. 2 on application.
Rs. 5 on allotment including premium of Rs. 2
And Rs. 5 on first and final call.
The shares have been fully subscribed called up and paid up except the following:
(a) Allotment and first and final call money on 500 shares held by X and
(b) First and final call money on 600 shares held by Y.
All these shares have been forfeited and reissued at 10% discount as fully paid. Expenses on reissue have been Rs. 500. Give journal entries in the books of Company.
Q. (2006). Assam Cement Ltd. issued 50,000 equity shares of Rs. 10 each at a premium of Rs. 2 each, payable as under:
On application Rs. 2
On allotment Rs. 5 (including premium Rs. 2)
On first and final call Rs. 5.
All the shares were subscribed, called up and paid up except allotment and call money on 500 shares. These shares were forfeited and 300 of them were re-issued at Rs. 9 each as fully paid. Expenses on reissue were Rs. 200. Pass the necessary journal entries to record the above transactions.
Q. (2007). Sony Ltd. issued 10,000 equity shares of Rs. 100 each, payable as Rs. 30 on application, Rs. 50 on allotment and Rs. 20 on first and final call. The shares were fully subscribed, called up and paid up except the following:
(a) Rajeev holding 500 shares failed to pay allotment and call money and
(b) Sanjeev holding 800 shares failed to pay the call money.
All these shares were forfeited and subsequently reissued as fully paid at a discount of Rs. 20 per share. Expenses on reissue were Rs. 500. Give Journal entries in the books of the company.
Q. (2009). Kamrup Foods Ltd. issued 10,000 Equity shares of Rs. 10 each at a premium of 10% payable as under:
On application Rs. 2 per share;
On allotment Rs. 5 per share (including premium);
On first and final call Rs. 4 per share.
Applications were received for 8,000 shares and all these applications were accepted. All money due were received except the first and final call money on 300 shares which were   forfeited. Subsequently 200 of the forfeited shares were reissued at Rs. 7 per share as fully paid up. Pass necessary journal entries to record the above transactions.
Q. (2013). Karan Ltd. decided to issue 10000 shares of Rs.100 each at a premium of 10%, payable as follows:
On Application – Rs.30
On Allotment – Rs.60 (Including Premium)
Balance on 1st and final call.
The company received 9000 applications. All the shares were duly accepted and allotted. All the calls were duly made and all call money received accordingly. Give Journal Entries and prepare a Balance Sheet.
Q. Famous Company Ltd. issued 6,000 equity shares of Rs. 10 each at a premium of Rs. 2 per share payable as follows:
On application Rs. 3 per share
On allotment Rs. 5 per share including premium.
On first and final call Rs. 4 per share.
Subscriptions were received for Rs. 10,000 shares. The excess money was refunded and the allotment money was received in full. In due course, the first and final cal was made and the amount due was received with the exception of 200 shares. These 200 shares were forfeited and 50 of the forfeited shares were subsequently reissued as fully paid for a consideration of Rs. 6 per share. Pass necessary journal entries and prepare the Cash book of the Company recording the above transactions. Also show the equity shares capital account and Balance sheet. 
Q. (2001). Eastern Traders Ltd. Offered for public subscription 20,000 equity shares of Rs. 10 each at a premium of Rs. 10 per share. The payment was to be made as follows:
On application Rs. 20 per share.
On allotment Rs. 40 (including premium).
On first and final call Rs. 50.
Applications received were for 35,000 shares. Applications for 10,000 shares were rejected and money was returned and those totaling for 15,000 shares were allotted 10,000 shares on prorata and remaining application were allotted in full. The directors made the final call and one shareholder hold the 500 shares failed to pay the call money and as a consequences his shares were forfeited. 200 of these shares were re-issued as fully paid at Rs. 80 per share and the amount was received. Give Journal entries in the books of the company.
Q. (1999). Famous Company Ltd. issued 6,000 equity shares of Rs. 10 each at a premium of Rs. 2 per share payable as follows:
On application Rs. 3 per share
On allotment Rs. 5 per share including premium.
On first and final call Rs. 4 per share.
Subscriptions were received for Rs. 10,000 shares. The excess money was refunded and the allotment money was received in full. In due course, the first and final cal was made and the amount due was received with the exception of 200 shares. These 200 shares were forfeited and 50 of the forfeited shares were subsequently reissued as fully paid for a consideration of Rs. 6 per share. Prepare the Cash book of the Company recording the above transactions. Also show the equity shares capital account.
Q. Eastern Traders Ltd. Offered for public subscription 20,000 equity shares of Rs. 10 each at a premium of Rs. 10 per share. The payment was to be made as follows:
On application Rs. 20 per share.
On allotment Rs. 40 (including premium).
On first and final call Rs. 50.
Applications received were for 35,000 shares. Applications for 10,000 shares were rejected and money was returned and those totaling for 15,000 shares were allotted 10,000 shares on prorata and remaining application were allotted in full. The directors made the final call and one shareholder hold the 500 shares failed to pay the allotment and call money and as a consequences his shares were forfeited. 200 of these shares were re-issued as fully paid at Rs. 80 per share and the amount was received. Give Journal entries in the books of the company.
Q. Nitin, a shareholder, holding 1,000 shares of Rs. 10 each, did not pay the allotment money of Rs. 4 (including a premium of Rs. 1) and the first and final call of Rs. 3. His shares were forfeited after the first and final call. Pass the journal entry to give effect to the forfeiture of the shares.                    [A.H.S.E.C - 2000]
Q. Tofan Express Ltd. has forfeited the following shares of Rs. 100 each for non-payment of allotment and call money.
a)      100 shares held by X who has paid only the application money @ Rs. 1 each.
b)      200 shares held by Y who has paid only the application and the allotment money @ Rs. 1 and Rs. 2 each respectively.
c)      300 shares held by Z how has paid only the application, the allotment and the first call money @ Rs. 1, Rs. 2 and Rs. 3 each respectively.
d)      Shares have been fully called. All the shares are forfeited and are re-issued at 10% discount.
Give Journal entries.               [A.H.S.E.C – 2004]
Q. Assam Cement Ltd. issued 50,000 equity shares of Rs. 10 each at a premium of Rs. 2 each, payable as under:
On Application Rs. 2
On allotment Rs. 5 (including premium Rs. 2)
On first and final call Rs. 5
All the shares were subscribed, called up and paid up except allotment and call money on 500 shares. These shares were forfeited and 300 of them were re-issued at Rs. 9 each as fully paid. Expenses on re-issue Rs. 200. Pass Journal entries to record the above Transactions.                                     [A.H.S.E.C – 2006]
Q. The Asom Textiles Ltd. with a nominal capital of Rs. 10,00,000 in equity shares of Rs. 10 each issued 30,000 shares to the public, payable Rs. 2 on application, Rs. 3 on allotment, Rs. 3 on first call and the balance on the final call. Applications were received for Rs. 24,000 shares and all of them were allotted. All money due on which all the calls were made were duly received excepting that a shareholder holding 1,500 shares failed to pay both the calls and there upon all these shares were forfeited by the Board of Directors. Pass Journal entries to record the transactions and show the relevant entries in the Balance Sheet. [A.H.S.E.C -1994]
Q. Famous Co. Ltd. registered with a nominal capital of Rs. 5,00,000 divided into 50,000 equity shares of Rs. 10 each, issued 10,000 shares payable Rs. 3 on application, Rs. 2 on allotment, Rs. 2 on first call and the balance on final call. Application was received for the shares issued and all the shares were duly allotted. All money due upto allotment was fully received, but on the first call being made, a shareholder, holding 600 shares did not pay the call money. Another shareholder of 300 shares paid his entire dues along with the first call. All the shares on which calls were in arrear were forfeited. Pass Journal entries and prepare the cash book recording the above transactions and show how the relevant items would appear in the balance sheet.                        [A.H.S.E.C – 1998]
Q. The North East Company Ltd. with a nominal capital of Rs. 7,50,000 equity shares of Rs. 10 each offered to the public 50,000 shares, payable Rs. 1 per share on application, Rs. 2 per share on allotment, Rs. 3 per share on first call and the balance on final call. Applications were received for 60,000 shares of which 50,000 shares were allotted and the application money for the excess were refunded. Calls were made up to the first call and all money was duly received with the exception of the allotment money on 150 shares and first call on 250 shares. The Board of Directors forfeited the shares on which default was made in payment since allotment. Show the Cash Book, Share Capital Account and relevant entries in the Balance Sheet.                 [A.H.S.E.C – 1995]
Q. Jai & Co. Ltd. were registered with a capital of Rs. 10,00,000 equity shares of Rs. 10 each. It issued 40,000 such shares to the public payable Rs. 2 per share on application, Rs. 3 per share on allotment, Rs. 2 per share on first call and the balance as and when required. All the shares issued were subscribed for and duly allotted. The money payable on application and allotment were duly received, but when the first call was made, two shareholders holding 2,000 shares failed to pay the call money and another shareholder holding 600 shares paid the entire balance due by him on his holdings. Later on, of the calls in arrear, first call money on 1,500 shares was realised and the remaining shares were forfeited. Give journal entries to record the transactions and show the relevant items in the Balance Sheet. [A.H.S.E.C – 1996]
Q. Guwahati Company Ltd. issued 10,000 equity shares of Rs. 10 each at a premium of Rs. 2 per share payable as follows:           
On Application Rs. 3 per share.
On Allotment Rs. 5 per share (including premium)
On First and Final call Rs. 4 per share.
All the shares were subscribed for and the allotment money was received in full. In due course, the first and final call was made and the amount due was received with the exception of 100 shares. These 100 shares were forfeited and 50 of the forfeited shares subsequently reissued as fully paid for consideration of Rs. 8 per share. Give Journal Entries in the books of the company.                [A.H.S.E.C – 2002]
Q. Famous Company Ltd. issued 6,000 Equity shares of Rs. 10 each at a premium of Rs. 2 per share payable as follows:
On application – Rs. 3 per share.
On allotment – Rs. 5 per share (including premium)
On first and final call – Rs. 4 per share.
Subscriptions were received for 10,000 shares. The excess money was refunded and the allotment money was received in full. In due course the first and final call was made and the amount due was received with the exception of 200 shares. These 200 shares were forfeited and 50 of the forfeited shares were subsequently re-issued as fully paid for a consideration of Rs. 6 per share. Prepare the Cash Book of the Company recording the above transactions. Also show the Equity Share Capital Account.     [A.H.S.E.C – 1999]
Q. Kamrup Company Ltd, was registered with an authorised capital of Rs. 3,00,000 divided into 20,000 shares of Rs. 15 each. The shares were issued to the public, payable per share Rs. 3 on application, Rs. 5 on allotment and the balance in two calls of Rs. 3.50 each. All application, allotment and first call moneys were received. With regard to the final call, one shareholder holding 100 shares failed to pay the call money. Prepare Journal, Cash Book and Balance Sheet of the company.                  [A.H.S.E.C – 1987]
Q. The Guwahati Ltd. was registered with an authorised capital of Rs. 2,00,000 divided into 20,000 shares of Rs. 10 each. The shares were issued to the public payable per share as Rs. 2.00 on application, Rs. 3.00 on allotment, and the balance in two calls of Rs. 2.50 each. All applications, allotment and first call money were received. With regard to the final call one shareholder holding 1,000 shares failed to pay the call money. Record the above transactions in the Cash Book and in the Journal.                 [A.H.S.E.C – 1984]
Q. A company issues 10,000 shares of the value of Rs. 10 each, payable Rs. 3 on application, Rs. 3 on allotment and Rs. 4 on the first and final call. All the shares are subscribed and duly allotted and call is made. All cash is duly received except the call money on 200 shares. These shares are subsequently forfeited by the directors and are resold as fully paid for Rs. 1,800. Give the necessary Journal entries for the above transactions. [AHSEC- 1970]
B. Questions Relating to Forfeiture of Shares and Re-issue of forfeited shares:  (5 Marks Expected)
a)      A Ltd. forfeited 500 shares of Rs. 10/- each, Rs. 8/- paid, for non-payment of final call of Rs. 2/- each. Give Journal entry of forfeiture of share.      2016
b)      X Ltd. Decided to forfeit 1,000 shares of Rs. 10/- each for non-payment of allotment money for Rs. 4/- each and 1st and final call money of Rs. 3/- each. Give journal entry for the forfeiture of shares. 2015
c)      X Ltd. company forfeited 800 shares of Rs.10 each issued at par for non-payment of 1st call Rs.2 and final call Rs.3 each. Out of these, 500 shares are re-issued at 10% discount. Give journal entries in the books of the company. 2014
d)      Patowary Co. forfeited 400 shares of Rs. 10 each fully called up for non-payment of final call            of Rs. 3 per share, 250 of these shares were re-issued as fully paid up for Rs. 8 per share. Journalise the above transaction in the books of company.  (2011)
e)      800 Shares of Rs. 10 each issued at per were forfeited for the non-payment of final call of Rs. 2 per share. These shares were reissued at Rs. 10 per share fully paid-up.
f)       800 Shares of Rs. 10 each issued at per were forfeited for the non-payment of final call of Rs. 2 per share. 700 shares were reissued at Rs. 8 per share fully paid-up. Expenses on re-issue amounted to Rs.100.
g)      800 Shares of Rs. 10 each issued at per were forfeited for the non-payment of first call of Rs. 2 per share. Final call of Rs. 2 per share is not made. These shares were reissued at Rs. 8 per share fully paid-up. Expenses on re-issue amounted to Rs.100.
h)      800 Shares of Rs. 10 each issued at per were forfeited for the non-payment of first call of Rs. 2 per share. Final call of Rs. 2 per share is not made. These shares were reissued at Rs. 7 per share partly paid-up.
i)        800 Shares of Rs. 10 each issued at per were forfeited for the non-payment of first call of Rs. 2 per share. Final call of Rs. 2 per share is not made. These shares were reissued at Rs. 10 per share for Rs.8 paid up.
j)        800 Shares of Rs. 10 each were forfeited for the non-payment of first call of Rs. 2 per share. Final call of Rs. 2 per share is not made. 100 shares were reissued at Rs. 7 per share fully paid-up.
k)      800 Shares of Rs. 10 each issued at a premium of Re.1 per share were forfeited for the non-payment of first call of Rs. 2 final call of Rs. 2 per share. These shares were reissued at a discount of Rs. 3 per share.
l)        800 Shares of Rs. 10 each issued at a premium of Re.1 per share were forfeited for the non-payment of first call of Rs. 2 final call of Rs. 2 per share. These shares were reissued at Rs. 12 per share fully paid-up.
m)   800 Shares of Rs. 10 each issued at a premium of Rs. 2 per share were forfeited for the non-payment of first call of Rs. 2 final call of Rs. 2 per share. These shares were reissued at Rs. 10 per share fully paid-up.
n)      800 Shares of Rs. 10 each issued at a premium of Rs. 2 per share were forfeited for the non-payment of allotment Rs. 3, first call of Rs. 2 and final call of Rs. 2 per share. These shares were reissued at Rs. 12 per share fully paid-up.
o)      Nitin a shareholder, holding 1,000 shares of Rs. 10 each did not pay the allotment of Rs. 4 (including premium of Rs. 1) and the first and final call of Rs. 3. His shares were forfeited after the first and final call. Pass the journal entry to give effect to the forfeiture.
p)      Nitin a shareholder, holding 1,000 shares of Rs. 10 each did not pay the allotment of Rs. 4 (including premium of Rs. 1) and the first and final call of Rs. 3. His shares were forfeited for non-payment of allotment and call money. Pass the journal entry to give effect to the forfeiture.
q)      (2004, 2008, 2013). Indian Express Ltd has forfeited the following shares of Rs. 100 each for non-payment of allotment and call money.
(a) 100 shares held by X who has paid only the application money @ Rs. 10 each.
(b) 200 shares held by Y who has paid only the application and allotment money @ Rs. 10 and Rs. 20 each respectively.
(c) 300 shares held by Z who has paid only the application, allotment and the first call money @ Rs. 10, Rs. 20 and Rs. 30 respectively. Shares have been fully called up. All the shares are forfeited and are re-issued at 10% discount. Give journal entries.           

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