Accountancy 3 Marks Question

Ganesh Ltd. is registered with an authorised capital of ₹ 10,00,00,000 divided into equity shares of ₹ 10 each. Subscribed and fully paid up capital of the company was ₹ 6,00,00,000. For providing employment to the local youth and for the development of the tribal areas of Arunachal Pradesh the company decided to set up a hydro power plant 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 ₹ 10 each and 1,00,000, 9% debentures of ₹ 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 ₹ 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.

K Ltd. took over the assets of ₹ 15,00,000 and liabilities of ₹ 5,00,000 of P Ltd. for a purchase consideration of ₹ 13,68,500. ₹ 25,500 were paid by issuing a promissory note in favour of P Ltd. payable after two months and the balance was paid by issue of equity shares of ₹ 100 each at a premium of 25%.
Pass necessary journal entries for the above transactions in the books of K Ltd.

For issuing shares at discount a company has to fulfil many conditions. State any three such conditions.

‘David Ltd.’ issued ₹ 40,00,000 equity shares of ₹ 10 each out of its registered capital of ₹ 10,00,00,000. The amount payable on these shares was as follows:
On application – ₹ 1 per share
On allotment – ₹ 2 per share
On first call – ₹ 3 per share
On second and final call – ₹ 4 per share
All calls were made and were duly received, except the second and final call on 1,000 shares held by Vipul. These shares were forfeited.
Present the ‘Share Capital’ in the Balance Sheet of the company as per Schedule VI Part I of the Companies Act, 1956. Also prepare ‘Notes to Accounts’.

‘India Auto Ltd.’ is registered with an authorised capital of ₹ 7,00,00,000 divided into 7,00,000 shares of ₹ 100 each. The company issued 50,000 shares to the vendor for building purchased and 2,00,000 shares were issued to the public. The amount was payable as follows:
On application and allotment – ₹ 20 per share
On first call – ₹ 50 per share
On second and final call – The balance
All calls were made and were duly received except on 100 shares held by Rajani, who failed to pay the second and final call. Her shares were forfeited.
Present the ‘Share Capital’ in the Balance Sheet of the company as per Schedule VI Part I of the Companies Act, 1956. Also prepare ‘Notes to Accounts’.

State any three purposes other than ‘issue of bonus shares’ for which securities premium can be utilized.

To provide employment to the youth and to develop Baramula district of Jammu and Kashmir, Jyoti Power Ltd. decided to setup a power plant. For raising funds the company decided to issue 8,50,000 equity shares of ₹ 10 each at a premium of ₹ 3 per share. The whole amount was payable on application. Applications for 20,00,000 shares were received. Applications for 3,00,000 shares were rejected and shares were alloted to the remaining applicants on pro-rate basis.

Pass necessary journal entries for the above transactions in the books of the company and identify any two values which the company wants to propagate.

'Suvidha Ltd.' is registered with an authorised capital of ₹ 10,00,00,000 divided into 10,00,000 equity shares of ₹ 100 each. The company issued 1,00,000 shares for public subscription. A shareholder holding 100 shares, failed to pay the final call of ₹ 20 per share. His shares were forfeited. The forfeited shares were re-issued at ₹ 90 per share as fully paid up.
Present the 'Share Capital' in the Balance Sheet of the company as per Schedule VI Part I of the Companies Act, 1956. Also prepare 'Notes to Accounts'.

Guru Ltd. invited applications for issuing 5,00,000 equity shares of ₹ 10 each at a premium of ₹ 5 per share. Because of favourable market conditions, the issue was over-subscribed, and applications for 15,00,000 shares were received.
Suggest the alternatives available to the Board of Directors for the allotment of shares.

X Ltd. redeemed 1000, 6% Debentures of ₹ 100 each by converting them into Equity shares of ₹ 100 each. The 6% Debentures were redeemable at a premium of 5% for which the Equity shares were issued at a premium of 25%. Pass the necessary journal entries for the redemption of the above mentioned Debentures in the books of X Ltd.

Goodluck Ltd. purchased machinery costing ₹ 10,00,000 from Fair Deals Ltd. The company paid the price by issue of Equity shares of ₹ 10 each at a premium of 25%.
Pass necessary journal entries for the above transactions in the books of Goodluck Ltd.

DN Ltd. issued 50,000 shares of ₹ 10 each at a discount of 10% payable as ₹ 2 per share on application, ₹ 3 on allotment and ₹ 2 each on first and final call. Applications were received for 70,000 shares. It was decided that

1. refuse allotment to the applicants of 10,000 shares,
2. allot 10,000 shares to Mohan who had applied for a similar number, and
3. allot the remaining shares on a pro-rata basis.

Mohan failed to pay the allotment money and Sohan who belonged to category(c) and was allotted 3,000 shares, paid both the calls with allotment. Calculate the
amount received on allotment.

X Ltd. obtained a loan of ₹ 4,00,000 from IDBI Bank. The company issued 5000, 9% Debentures of ₹ 100 each as a collateral security for the same. Show how these items will be presented in the Balance Sheet of the company.

Meena Ltd. issued 30,000 shares of ₹ 10 each at a premium of ₹ 2 per share payable as ₹ 3 on application, ₹ 5 (including premium) on allotment and the balance on first and final call. Applications were received for 42,000 shares. The directors resolved to allot as follows:

A.	Applicants of 20,000 shares	10,000 shares
B.	Applicants of 20,000 shares	20,000 shares
C.	Applicants of 2,000 shares	Nil

Balu who had applied for 1,000 shares in category A and Ganesh who was allotted 600 shares in category B failed to pay the allotment money. Calculate the amount received on allotment.

The Directors of a Company forfeited 500 shares of ₹ 10 each issued at a premium of ₹ 3 per share, for the, non-payment of the first call money of ₹ 3 per share. The final call of ₹ 2 per share has not been made. Half the forfeited shares were reissued at ₹ 2,500 fully paid. Record the journal entries for the forfeiture and reissue of shares.

Samta Ltd. forfeited 800 equity shares of Rs. 100 each for the non-payment of first call of Rs. 30 per share. The final - call of Rs. 20 per share was not yet made. Out of the forfeited shares 400 were re-issued at the rate of Rs. 105 per share fully paid up.
Pass necessary journal entries in the books of Samta Ltd. for the above transactions.

Sundram Ltd. purchased Furniture for ₹ 3,00,000 from Ravindram Ltd. ₹ 1,00,000 were paid by drawing a. Promissory Note in favour of Ravindram Ltd. The balance was paid by issue of Equity Shares of ₹ 10 each at a Premium of 25%.
Pass necessary Journal entriesin the books of Sundram Ltd.

Gagan Ltd. is registered with an authorised capital of ₹ 15,00,00,000 divided into 1,50,00,000 equity shares of ₹ 10 each. Subscribed and fully paid up share capital of the company was ₹ 5,00,00,000. For providing employment to the local youth and for the development of rural areas of Jharkhand State, the company decided to set up a food processing unit in Hazaribagh. The company also decided to set up skill development centres at Ranchi, Hazaribagh and Ramgarh. To meet its new financial requirements the company decided to issue 2,00,000 equity shares of ₹ 10 each and 2000, 12% debentures of ₹ 1,000 each. The issue of shares and debentures was fully subscribed. A shareholder holding 500 shares failed to pay the final call of ₹ 3 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 wants to propagate.

‘B’ Ltd. took over the assets of ₹ 14,00,000 and liabilities of ₹ 4,00,000 of C Ltd. for a purchase consideration of ₹ 9,19,000. ₹ 17,000 were paid by a bank draft in favour of C Ltd. and the balance was paid by issue of equity shares of ₹ 10 each at a premium of 10% in favour of C Ltd. Pass necessary journal entries for the above transactions in the books of B Ltd.Pass necessary journal entries for the above transactions in the books of B Ltd.

To provide employment to the youth and to develop a backward area of Jharkhand which is near one of the coal mines, Thermal Power Energies Ltd. decided to set-up a Thermal Power Plant of 500 mega watt capacity. The company decided to issue 10,00,000 equity shares of ₹ 10 each at a premium of 70% to finance the project. Applications for 17,00,000 shares were received. Applications for 5,00,000 shares were rejected and money refunded. Shares were allotted on pro-rata basis to the remaining applicants. The whole of share money was payable on application.Pass necessary journal entries for the above transactions in the books of the company and identify any two values which the company wants to convey to the society.

‘B’ Ltd. took over the assets of ₹ 14,00,000 and liabilities of ₹ 4,00,000 of C Ltd. for a purchase consideration of ₹ 9,19,000. ₹ 17,000 were paid by a bank draft in favour of C Ltd. and the balance was paid by issue of equity shares of ₹ 10 each at a premium of 10% in favour of C Ltd.Pass necessary journal entries for the above transactions in the books of B Ltd.

Sandesh Ltd. took over the assets of ₹ 7,00,000 and liabilities of ₹ 2,00,000 from Sanchar Ltd. for a purchase consideration of ₹ 4,59,500. ₹ 8,500 were paid by accepting a draft in favour of Sanchar Ltd. payable after three months and the balance was paid by issue of equity shares of 10 each at a premium of 10% in favour of Sanchar Ltd.
Pass necessary journal entries for the above transactions in the books of Sandesh Ltd.

Sun Pharma Ltd. is registered with an authorized capital of ₹ 1,00,00,000 divided into 1,00,000 equity shares of ₹ 100 each. The company issued 50,000 shares at a premium of ₹ 40 per shares. A shareholder holding 500 shares did not pay the final call of ₹ 20 per share. His shares were forfeited.
Present the ‘Share Capital’ in the Balance Sheet of the Company as per Schedule VI Part I of the Companies Act, 1956. Also prepare notes to accounts.

Securities premium can also be utilized for three other purposes besides (i) ‘Issuing fully paid bonus shares’ and (ii) ‘Buy back of shares’. State those purposes.

Samachar India Ltd. took over the assets of ₹ 14,00,000 and liabilities of ₹ 4,00,000 from News Ltd. for a purchase consideration of ₹ 9,19,000. Samachar India Ltd. issued a promissory note of ₹ 17,000 payable after 60 days in favour of News Ltd. and the balance amount was paid by issue of equity shares of ₹ 100 each at a premium of ₹ 25 per share.

To provide employment to the youth and to develop the Naxal affected backward areas of Chattisgarh. X Ltd. decided to set-up a power plant. For raising funds the company decided to issue 7,50,000 equity shares of ₹ 10 each at a premium of 50%. The whole amount was payable on application. Applications for 20,00,000 shares were received. Applications for 50,000 shares were rejected and shares were allotted to the remaining applicants on pro-rata basis.
Pass necessary journal entries for the above transactions in the books of the company and identify any two values which X Ltd. wants to propagate.

State any three purposes other than ‘buy back of shares’ for which securities premium can be utilized.

Akash Ltd. is registered with an authorized Capital of ₹ 8,00,00,000 divided into equity shares of ₹ 10 each. Subscribed and fully paid up share capital of the company was ₹ 4,00,00,000. For providing employment to the local youth and for the development of the rural areas of the Jammu and Kashmir State the company decided to set up a food processing unit in Anantnag district. The Company also decided to open skill development centres in Ladakh, Srinagar and Punch. To meet its new financial requirements the company decided to issue 1,00,000 equity shares of ₹ 10 each and 10,000, 9% debentures of ₹ 100 each. The debentures were redeemable after five years. The issue of equity shares and debentures was fully subscribed. A shareholder holding 1,000 shares failed to pay the final call of ₹ 2 per share.
Present 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.

‘Tractors India Ltd.’ is registered with an authorized capital of ₹ 10,00,000 divided into 1,00,000 equity shares of ₹ 10 each. The company issued 50,000 equity shares at a premium of ₹ 5 per share. ₹ 2 per share were payable with application, ₹ 8 per share including premium on allotment and the balance amount on first and final call. The issue was fully subscribed and all the amount due was received except the first and final call money on 500 shares allotted to Balaram.Present the ‘Share Capital’ in the Balance Sheet of ‘Tractors India Ltd.’ as per Schedule VI Part I of the Companies Act, 1956. Also prepare Notes to Accounts for the same.

‘Sangam Woollens Ltd.’, Ludhiana, are the manufacturers and exporters of woollen garments. The company decided to distribute free of cost woollen garments to 10 villages of Lahaul and Spiti District of Himachal Pradesh. The company also decided to employ 50 young persons from these villages in its newly established factory. The company issued 40,000 equity shares of ₹ 10 each and 1,000 9% debentures of ₹ 100 each to the vendors for the purchase of machinery of ₹ 5,00,000.
Pass necessary Journal Entries. Also identify any one value that the company wants to communicate to the society.

State any three purposes other than ‘issue of bonus shares’ for which securities premium can be utilized.

Jain Ltd. purchased Building for ₹ 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 ₹ 10 each at a discount of 10%.
Pass necessary Journal Entries in the books of Jain Ltd.

Y Ltd. purchased furniture costing ₹​​​ 1,35,000 from A. B. Ltd. The payment was made by issue of Equity Shares of ₹​​​ 10 each at a discount of ₹​​​ 1 per share. Pass necessary Journal entries in the books of Y Ltd.

S.S.S. Ltd., has a paid-up share capital of ₹ 60,00,000 and a balance of ₹ 15,00,000 in the Securities Premium Account. The company management do not want to carry over this balance. State the ‘purposes for which this balance can be utilised.

DN Ltd., issued 50,000 shares of ₹ 10 each at a discount of 10% payable as ₹ 2 per share on application, ₹ 3 on allotment and ₹ 2 each on first and final call. Applications were received for 70,000 shares. It was decided that (a) refuse allotment to the applicants for 10,000 shares (b) allot 20,000 shares to Mohan who had applied for similar number and (c) allot the remaining shares on pro-rata basis. Mohan failed to pay the allotment money and Sohan who belonged the category ‘c’ and was allotted 3,0,00 shares paid both the calls with allotment. Calculate the amount received on allotment.

The Directors of a Company forfeited 200 shares of ₹ 10 each issued at a premium of ₹ 3 per share, for the non-payment of the First Call Money of ₹ 3 per share. The final call of ₹ 2 per share has not been made. Half the forfeited shares were reissued at ₹1,000 fully paid. Record the Journal Entries for the forfeiture & reissue of shares.

Meena Ltd., issued 60,000 shares of ₹ 10 each at a premium of ₹ 2 per share payable as ₹ 3 on Application, ₹ 5 (Incl. Premium) on allotment and the balance on 1st and final call. Applications were received for 1,02,000 shares. The Directors resolved to allot as follows:

(A)	Applicants of 60,000 shares	30,000 shares
(B)	Applicants of 40,000 shares	30,000 shares
(C)	Applicants of 2,000 shares	Nil

Nikhil who had applied for 1,000 shares in category A, and Vish who was allotted 600 shares in category B failed to pay the allotment money. Calculate the amount received on Allotment.

PS Ltd forfeited 500 equity shares of Rs. 100 each for the non-payment of first call of Rs. 30 per share. The final call of Rs. 10 per share was not yet made. Then forfeited shares were re-issued for Rs. 65,000 fully paid up.
Pass necessary journal.entries in the books of the company.

NK Ltd., a truck manufacturing company, is registered with an authorised capital of ₹ 1,00,00,000 divided into equity shares of ₹ 100 each. The subscribed and paid up capital of the company is ₹ 50,00,000. The company decided to open technical schools in the Jhalawar district of Rajasthan to train the specially abled children of the area. It is planning to provide them employment in its various production units and industries in the neighbourhood area.
To meet the capital expenditure requirements of the project, the company offered 20,000 shares to the public for subscription. The shares were fully subscribed and paid.
Present 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 wants to communicate.

What is meant by a ‘Share’? Give any two differences between ‘Preference Shares’ and ‘Equity Shares’.

X Ltd forfeited 1,000 Equity shares of ₹ 10 each issued at a premium of ₹ 3 per share for the non-payment of final call of ₹ 6 (including premium) per share. The forfeited shares were re-issued as fully paid up for ₹ 7 per share.
Pass necessary journal entries in the books of the company.

(Forfeiture and Reissue of shares). Complete the following Journal entries:

Give necessary journal entries:
The Directors of Devendra Ltd. resolved on 1st January, 2010 that Equity Shares of ₹ 10 each, ₹ 8 paid-up be forfeited for non-payment of final call of ₹ 2. On 1st February, 60 of these shares were reissued @ ₹ 7 per share as fully paid-up.

Pass journal entries for the forfeiture and re-issue in the following case:
A Ltd. forfeited 100 shares of ₹ 10 each fully called-up for non-payment of first call of ₹ 3 per share and final call of ₹ 3 per share. All of these shares were re-issued as fully paid for ₹ 10 per share.

Samta Ltd. forfeited 800 equity shares of ₹ 100 each for the non-payment of first call of ₹ 30 per share. The final call of ₹ 20 per share was not yet made. Out of the forfeited shares 400 were re-issued at the rate of ₹ 105 per share fully paid up. Pass necessary journal entries in the books of Samta Ltd. for the above transactions.

The Directors of Devendra Ltd. resolved on 1st April, 2016 that 1,000 equity shares of ₹ 10 each ₹ 8 per-share called-up be forfeited for non-payment of first call of ₹ 2 per share. On 1st May, 2016, 600 of these shares were re-issued at ₹ 7 per share fully paid-up. Pass entries for forfeiture and re-issue of shares.

Pass journal entries for the forfeiture and re-issue in the following cases:
D Ltd. forfeited 1,000 shares of ₹ 10 each fully called-up on which the holder has paid only the application money @ ₹ 3 per share. Out of these, 600 shares were re-issued at ₹ 10.50 per share, fully paid up.

Ghosh Ltd. made the second and final call on its 50,000 Equity Shares @ ₹ 2 per share on 1st January, 2016. The entire amount was received on 15th January, 2016 except on 100 shares allotted to Venkat. Pass necessary journal entries for the call money due and received by opening Calls-in-Arrears Account.

Journalise the following:
Y Ltd. forfeited 400 shares of ₹ 100 each, issued at a premium of ₹ 5 per share (to be paid at the time of allotment) for non-payment of a first call of ₹ 20 per share. The second and final call of ₹ 20 has not yet been called. Out of these, 100 shares were re-issued on fully paid-up for ₹ 110 per share.