12th | Ts grewal 2022-2023 Question 37 to 40 | Share Capital - Company Accounting

Question 37: Sandesh Ltd. purchased a running business from Sanchar Ltd. for ` 15,00,000 payable 10% by cheque and


the balance by the issue of fully paid Equity Shares of `100 each at a premium of 20%. The assets and

liabilities consisted of the following:

Particulars

Book Value (`)

Agreed Value (`)

Building

5,00,000

6,50,000

Plant and Machinery

3,00,000

2,50,000

Stock

6,00,000

5,00,000

Trade Receivables

2,80,000

2,50,000

Trade Payables

1,80,000

2,00,000

Pass the necessary Journal entries in the books of Sandesh Ltd.

Answer:


Journal

Date

Particulars

L.F.

Debit

 ( `)

Credit

 ( `)

 

 Goodwill A/c

 Dr.

 

50,000

 

 

Building A/c

 Dr.

 

6,50,000

 

 

Plant and Machinery A/c

 Dr.

 

2,50,000

 

 

Stock A/c

 Dr.

 

5,00,000

 

 

Trade Receivables A/c

 Dr.

 

2,50,000

 

 

  To  Trade Payables  A/c

 

 

 

2,00,000

 

  To  Sandesh Ltd.

 

 

 

15,00,000

 

(Being Business of  Sanchar Ltd at agreed values)

 

 

 

 

 

 Sandesh Ltd.

Dr.

 

15,00,000

 

 

  To Bank   A/c

 

 

 

1,50,000

 

  To Share capital   A/c

 

 

 

11,25,000

 

  To Securities Premium Reserve

 

 

 

2,25,000

 

(Being Shares issued for purchase consideration of business by issuing shares of `100 each at a premium of 20%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Question 38:


Light Lamps Ltd. issued 50,000 shares of  `10 each as fully paid-up to the promoters for their services to set-up the company. It also issued 2,000 shares of  `10 each credited as fully paid-up to the underwriters of shares for their services. Journalise these transactions.

Answer:


Journal

Date

Particulars

L.F.

Debit

 ( `)

Credit

 ( `)

 

 

 

 

 

 

 

Incorporation Expenses A/c

Dr.

 

5,00,000

 

 

   To Share Capital A/c (50,000×10)

 

 

 

     5,00,000

 

(Shares issued to promoters)

 

 

 

 

 

 

 

 

 

 

 

Underwriting Commission A/c

Dr.

 

20,000

 

 

   To Underwriters’ A/c

 

 

 

20,000

 

(Underwriting commission due)

 

 

 

 

 

 

 

 

 

 

 

Underwriters’ A/c

Dr.

 

        20,000

 

 

  To Share Capital A/c (2,000×10)

 

 

 

20,000

 

(Shares issued to underwriters)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Question 39:


Alpha Ltd. issued 20,000 Equity Shares of   ` 10 each at par payable: On application  ` 2 per share; on allotment  ` 3 per share; on first call  ` 3 per share; on second and final call  ` 2 per share.
Mr. Gupta was allotted 100 shares. Pass necessary  Journal entry relating to the forfeiture of shares in each of the following alternative cases:
 

Case I

If Mr. Gupta failed to pay the allotment money and his shares were immediately forfeited.

Case II

If Mr. Gupta failed to pay allotment money and on his subsequent failure to pay the first call, his shares were forfeited.

Case III

If Mr. Gupta failed to pay the first call and on his subsequent failure to pay the second and final call, his shares were forfeited.

Answer:


Application

 `

 

2

 

Allotment

 `

 

3

 

First Call

 `

 

3

 

Final Call

 `

 

2

 

 

 

10

 

 Books of Alpha Limited
Journal

Date

Particulars

L.F.

Debit

( `)

Credit

 ( `)

 

 

 

 

 

Case I

Share Capital A/c (100×5)

Dr.

 

500

 

 

To Share Forfeiture A/c

 

 

200

 

To Share Allotment A/c

 

 

300

 

(100 shares of  ` 10 each,  ` 5 called-up, forfeited for the non-payment of allotment)

 

 

 

 

 

 

 

 

Case II

Share Capital A/c (100 × 8)

Dr.

 

800

 

 

To Share Forfeiture A/c

 

 

200

 

To Share Allotment A/c

 

 

300

 

  To Share First Call A/c

 

 

300

 

(100 shares of  ` 10 each,  ` 8 called-up forfeited for non-payment allotment and first-call)

 

 

 

 

 

 

 

 

Case III

Share Capital A/c

Dr.

 

1,000

 

 

To Share Forfeiture A/c

 

 

500

 

To Share First Call A/c

 

 

300

 

  To Share Final Call A/c

 

 

200

 

(100 shares of  ` 10 each forfeited for the non-payment  ` 5 each)

 

 

 

 

 

 

 

 

 

Question 40: Sangita Limited invited applications for issuing 60,000 shares of `10 each at par. The amount was payable


as follows: on application `2 per share; on allotment `3 per share; on first and final call `5 per share.

Applications were received for 92,000 shares.

Allotment was made on the following basis: (a) to applicants for 40,000 shares: full; (b) to applicants for

50,000 shares: 40%; (c) to applicants for 2,000 shares: nil.

`1,08,000 was realised on account of allotment (excluding the amount carried from application money)

and `2,50,000 on account of call. The directors decided to forfeit shares of those applicants to whom full

allotment was made and on which allotment money was overdue.

Pass Journal entries in the books of Sangita Limited to record the above transactions. (CBSE Sample Paper 2013)

 

Answer:


 

Books of Sangita Limited

Journal

Date

Particulars

L.F.

Debit

 ( `)

Credit

 ( `)

 

 

 

 

 

 

Bank A/c

Dr.

 

1,84,000

 

 

To Share Application A/c

 

 

1,84,000

 

(Share application money received for 92,000 shares at  ` 2 each)

 

 

 

 

 

 

 

 

 

Share Application A/c

Dr.

 

1,84,000

 

 

To Share Capital A/c

 

 

1,20,000

 

To Share Allotment A/c

 

 

60,000

 

To Bank A/c

 

 

4,000

 

(Share application of 90,000 shares transferred to Share Capital, and excess adjusted on allotment and remaining amount returned)

 

 

 

 

 

 

 

 

 

Share Allotment A/c

Dr.

 

1,80,000

 

 

To Share Capital A/c

 

 

1,80,000

 

(Share allotment due on 90,000 shares)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

1,08,000

 

 

To Share Allotment A/c

 

 

1,08,000

 

(Share allotment money received)

 

 

 

 

 

 

 

 

 

Share capital A/c (4000×10)

Dr.

 

40,000

 

 

To Share allotment  A/c (4000×3)

 

 

12,000

 

To Share First and Final Call A/c (4000×2)

To Share Forfeiture A/c

 

 

20,000

8,000

 

(4000 share forfeited)

 

 

 

 

 

 

 

 

 

Working notes;

 

Shares applied

Shares allotted

Application

Money received

Share capital

Share allotment

Bank

(Refund)

40,000

40,000

80,000

80,000

-

-

 

 

40,000×2

 

 

 

50,000

20,000

1,00,000

40,000

60,000

 

 

 

50,000×2

 

 

 

2,000

Nil

4,000

-

-

4,000

 

 

2,000×2

 

 

 

92,000

90,000

1,84,000

1,20,000

60,000

4,000

 

Due on allotment 60,000×3

Transferred from application money

=

=

1,80,000

60,000

 

Money received on allotment

 

=

120,000

1,08,000

Calls in arrears

=

12,000

 

No. of shares on which allotment money not received 12000/3=4000 shares

 

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Chapter-9: Company Accounting-Share Capital  | 2022-2023

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