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12th | Company Accounts- Accounting for Share Capital | Question No.  9 To 12 | Ts Grewal Solution 2022-2023

Question 9:

Modern Marbles Ltd. was registered with an authorised capital of  `10,00,000 divided into 7,500 Equity Shares of  `  100 each and, 2,500 Preference Shares of  `100 each. 1,000 Equity Shares and 500; 9% Preference Shares were offered to public on the following terms – Equity Shares payable  `10 on application,  `40 on allotment and the balance in two calls of  `  25 each. Preference Shares are payable  ` 25 on application,  ` 25 on allotment and  `50 on first and final call. All the shares were applied for and allotted . Amount due was duly received. Prepare Cash Book and pass necessary Journal entries to record the above issue of shares and show how the Share Capital will appear in the Balance Sheet.

Answer:

Authorised Capital:

Equity Shares 7,500 of  ` 100 each.

9% Preference Shares 2,500 of  ` 100 each.

Issued Capital:

Equity Shares 1,000 of  ` 100 each.

Payable as

 ` 10 on Application

 ` 40 on Allotment

 ` 25 on First Call

 ` 25 on Final Call

Preference Shares 500 of  ` 100 each.

Payable as

 ` 25 on application

 ` 25 on allotment

 ` 50 on first and final call

Books of Modern Marbles Limited
Cash Book

Dr.

 

Cr.

Date

Particulars

L.F.

Bank

( `)

Date

Particulars

L.F.

Bank

( `)

 

 

 

 

 

 

 

 

 

Equity Share Application

 

10,000

 

 

 

 

 

Preference Share Application

 

12,500

 

 

 

 

 

Equity Share Allotment

 

40,000

 

 

 

 

 

Preference Share Allotment

 

12,500

 

 

 

 

 

Equity Share First Call

 

25,000

 

 

 

 

 

Preference Share First and Final Call

 

25,000

 

 

 

 

 

Equity Share Final Call

 

25,000

 

Balance c/d

 

1,50,000

 

 

 

 

 

 

 

 

 

 

 

1,50,000

 

 

 

1,50,000

 

 

 

 

 

 

 

 

Journal

 

 

Particulars

L.F.

Debit

 ( `)

Credit

 ( `)

 

 

 

 

 

 

 

 

Equity Share Application A/c

Dr.

 

10,000

 

 

 

To Equity Share Capital A/c

 

 

10,000

 

 

(Equity share application of 1,000 shares of  ` 10 each transferred to Equity Share Capital Account)

 

 

 

 

 

 

 

 

 

 

 

Preference Share Application A/c

Dr.

 

12,500

 

 

 

To 9% Preference Share Capital A/c

 

 

12,500

 

 

(Preference share applications of 500 shares  ` 25 each transferred to 9% Preference Share Capital Account)

 

 

 

 

 

 

 

 

 

 

 

Equity Share Allotment A/c

Dr.

 

40,000

 

 

 

To Equity Share Capital A/c

 

 

40,000

 

 

(Equity share allotment due on 1,000 shares at  ` 40 each)

 

 

 

 

 

 

 

 

 

 

 

Preference Share Allotment A/c

Dr.

 

12,500

 

 

 

To 9% Preference Share Capital A/c

 

 

12,500

 

 

(Preference share allotment due on 500 shares at  ` 25 each)

 

 

 

 

 

 

 

 

 

 

 

Equity Share First Call A/c

Dr.

 

25,000

 

 

 

To Equity Share Capital A/c

 

 

25,000

 

 

(Equity share first call due on 1,000 shares at  ` 25 each)

 

 

 

 

 

 

 

 

 

 

 

Preference Share First and Final Call A/c

Dr.

 

25,000

 

 

 

To 9% Preference Share Capital A/c

 

 

25,000

 

 

(Preference share first and final call due on 500 shares at  ` 50 each)

 

 

 

 

 

 

 

 

 

 

 

Equity Share Final Call A/c

Dr.

 

25,000

 

 

 

To Equity Share Capital A/c

 

 

25,000

 

 

(Equity share final call due on 1,000 shares at  ` 25 each)

 

 

 

 

 

 

 

 

 

 

Balance Sheet

 

Particulars

Note No.

 ( `)

 

I. Equity and Liabilities

 

 

 

1. Shareholders’ Funds

 

 

 

a. Share Capital

1

1,50,000

 

2. Non-Current Liabilities

 

 

 

3. Current Liabilities

 

 

 

Total

 

1,50,000

 

 

 

 

 

II. Assets

 

 

 

1. Non-Current Assets

 

 

 

2. Current Assets

 

 

 

a. Cash and Cash Equivalents

2

1,50,000

 

Total

 

1,50,000

 

 

 

 

 

NOTES TO ACCOUNTS

 

Note No.

Particulars

 ( `)

1

Share Capital

 

 

Authorised Share Capital

 

 

75,000 Equity Shares of  ` 100 each

7,50,000

 

 

25,000 9% Preference Shares of  ` 100 each

2,50,000

10,00,000

 

Issued Share Capital

 

 

 1,000 Equity Shares of  ` 100 each

1,00,000

 

 

 500 9% Preference Shares of  ` 100 each

50,000

1,50,000

 

Subscribed, Called-up and Paid-up Share Capital

 

 

 1,000 Equity Shares of  ` 100 each

1,00,000

 

 

 500 9% Preference Shares of  ` 100 each

50,000

1,50,000

 

 

 

2

Cash and Cash Equivalents

 

 

Cash at Bank

1,50,000

 

 

 

 

Question 11:

Seema Ltd. offered for subscription 10,000 shares of  ` 25 each, payable  ` 5 per share on application,  ` 10 per share on allotment (including  ` 5 per share as premium),  ` 5 per share as first call on the shares and the balance in two equal amounts at intervals of three months. All the shares were applied for and allotted. All the money was received except the second call and final call on 200 and 400 shares respectively. Pass the entries in the company's Journal, Cash Book  and the ledger. Also show the company's Balance Sheet on completion of the above transactions.

Answer:

Issued 10,000 shares of  ` 25 each at premium of  ` 5

Applied 10,000 shares

Payable as:

Application

 `

5

 

Allotment

 `

10

(5 + 5)

First Call

 `

5

 

Second Call

 `

5

 

Final Call

 `

5

 

 

 `

30

(25 + 5)

 

Books of Seema Limited
Cash Book

Dr.

Cr.

Date

Particulars

L.F.

Bank

 ( `)

Date

Particulars

L.F.

Bank

 ( `)

 

 

 

 

 

 

 

 

 

Share Application

 

50,000

 

 

 

 

 

Share Allotment

 

1,00,000

 

 

 

 

 

Share First Call

 

50,000

 

 

 

 

 

Share Second Call

 

49,000

 

 

 

 

 

Share Final Call

 

48,000

 

Balance c/d

 

2,97,000

 

 

 

2,97,000

 

 

 

2,97,000

 

 

 

 

 

 

 

 


 Journal

Date

Particulars

L.F.

Debit

 ( `)

Credit

 ( `)

 

 

 

 

 

 

Share Application A/c

Dr.

 

50,000

 

 

To Share Capital A/c

 

 

50,000

 

(Application money of 10,000 shares of  ` 5 each transferred to Share Capital)

 

 

 

 

 

 

 

 

 

Share Allotment A/c

Dr.

 

1,00,000

 

 

To Share Capital A/c

 

 

50,000

 

To Securities Premium A/c

 

 

50,000

 

(Share allotment of 10,000 shares transferred to Share Capital at  ` 5 each

and Securities Premium at  ` 5 each)

 

 

 

 

 

 

 

 

 

Share First Call A/c

Dr.

 

50,000

 

 

To Share Capital A/c

 

 

50,000

 

(First call due on 10,000 shares

at  ` 5 each)

 

 

 

 

 

 

 

 

 

Share Second Call A/c

Dr.

 

50,000

 

 

To Share Capital A/c

 

 

50,000

 

(Second call due on 10,000 shares at 5 each)

 

 

 

 

 

 

 

 

 

Call-in-Arrears A/c

Dr.

 

1,000

 

 

To Share Second Call A/c

 

 

1,000

 

(Second call outstanding on 200 shares at  ` 5 each)

 

 

 

 

 

 

 

 

 

Share Final Call A/c

Dr.

 

50,000

 

 

To Shares Capital A/c

 

 

50,000

 

(Final call due on 50,000 shares of  ` to 5 per shares)

 

 

 

 

 

 

 

 

 

Calls-in-Arrears A/c

Dr.

 

2,000

 

 

To Shares Final Call A/c

 

 

2,000

 

(Final call outstanding on 400 shares at  ` 5 each)

 

 

 

 

 

 

 

 

 

Share Application Account

Dr.

 

Cr.

Date

Particulars

L.F.

 ( `)

Date

Particulars

L.F.

 ( `)

 

 

 

 

 

 

 

 

 

To Share Capital

 

50,000

 

By Bank

 

50,000

 

 

 

 

 

 

 

 

 

 

 

50,000

 

 

 

50,000

 

 

 

 

 

 

 

 

 

Share Allotment Account

Dr.

 

Cr.

Date

Particulars

L.F.

 ( `)

Date

Particulars

L.F.

 ( `)

 

 

 

 

 

 

 

 

 

To Share Capital

 

50,000

 

By Bank

 

1,00,000

 

Securities Premium

 

50,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,00,000

 

 

 

1,00,000

 

 

 

 

 

 

 

 

 

Share First Call Account

 

Dr.

 

Cr.

 

Date

Particulars

L.F.

 ( `)

Date

Particulars

L.F.

 ( `)

 

 

 

 

 

 

 

 

 

To Share Capital

 

50,000

 

By Bank

 

50,000

 

 

 

 

 

 

 

 

 

 

 

50,000

 

 

 

50,000

 

 

 

 

 

 

 

 

 

Share Second Call Account

Dr.

 

Cr.

Date

Particulars

L.F.

 ( `)

Date

Particulars

L.F.

 ( `)

 

 

 

 

 

 

 

 

 

To Share Capital

 

50,000

 

By Bank

 

49,000

 

 

 

 

 

Calls-in-Arrears

 

1,000

 

 

 

 

 

 

 

 

 

 

 

50,000

 

 

 

50,000

 

 

 

 

 

 

 

 

 

Share Final Call Account

 

Dr.

 

Cr.

 

Date

Particulars

L.F.

 ( `)

Date

Particulars

L.F.

 ( `)

 

 

 

 

 

 

 

 

 

 

 

To Share Capital

 

50,000

 

By Bank

 

48,000

 

 

 

 

 

 

Calls-in-Arrears

 

2,000

 

 

 

 

 

 

 

 

 

 

 

 

 

50,000

 

 

 

50,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Call-in-Arrears Account

Dr.

 

Cr.

Date

Particulars

L.F.

 ( `)

Date

Particulars

L.F.

 ( `)

 

 

 

 

 

 

 

 

 

To Share Second Call

 

1,000

 

By Balance c/d

 

3,000

 

To Share Final Call

 

2,000

 

 

 

 

 

 

 

 

 

 

 

 

3,000

 

 

 

3,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Share Capital Account

Dr.

 

Cr.

Date

Particulars

L.F.

 ( `)

Date

Particulars

L.F.

 ( `)

 

To Balance c/d

 

2,50,000

 

By Share Application

 

50,000

 

 

 

 

 

By Share Allotment

 

50,000

 

 

 

 

 

By Share First Call

 

50,000

 

 

 

 

 

By Share Second

 

50,000

 

 

 

 

 

By Share Final Call

 

50,000

 

 

 

 

 

2,50,000

 

 

 

2,50,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Securities Premium Account

Dr.

 

Cr.

Date

Particulars

L.F.

 ( `)

Date

Particulars

L.F.

 ( `)

 

 

 

 

 

 

 

 

 

To Balance c/d

 

50,000

 

By Share Allotment

 

50,000

 

 

 

 

 

 

 

 

 

 

 

50,000

 

 

 

50,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As per the Schedule III of Companies Act, 2013, the Company's Balance Sheet is presented as follows.

Balance Sheet

Particulars

Note No.

 ( `)

I. Equity and Liabilities

 

 

1. Shareholders’ Funds

 

 

a. Share Capital

1

2,47,000

b. Reserves and Surplus

2

50,000

2. Non-Current Liabilities

 

 

3. Current Liabilities

 

 

Total

 

2,97,000

 

 

 

II. Assets

 

 

1. Non-Current Assets

 

 

2. Current Assets

 

 

a. Cash and Cash Equivalents

3

2,97,000

Total

 

2,97,000

 

 

 

 

NOTES TO ACCOUNTS

Note No.

Particulars

 ( `)

1

Share Capital

 

 

Authorised Share Capital

 

 

……. shares of  ` 25 each

 

Issued Share Capital

 

 

 10,000 shares of  ` 25 each

2,50,000

 

Subscribed, Called-up and Paid-up Share Capital

 

 

10,000 shares of  ` 25 each

2,50,000

 

 

    Less: Calls-in-Arrears

(3,000)

2,47,000

 

 

 

2

Reserves and Surplus

 

 

Securities Premium

50,000

 

 

 

3

Cash and Cash Equivalents

 

 

Cash at Bank

2,97,000

 

 

 

 

Question 12:Bharat Ltd. was incorporated with a capital of  ` 2,00,000 divided into shares of  ` 10 each. 2,000 shares were offered for subscription and out of these, 1,800 shares were applied for and allotted.  ` 3 per share (including  ` 1 premium) was payable on application,  ` 4 per share (including  ` 1 premium) on allotment,  ` 2 per share on first call and  ` 3 per share on final call. All the money was received. Give necessary Journal entries and show share capital in the Balance Sheet.

Answer:

Authorised Capital 20,000 shares of  ` 10 each

Issued Capital 2,000 shares

Applied 1,800 shares

Payable as:

 

 

 

Application

 `

 

3

 

(2+1)

Allotment

 `

 

4

 

(3+1)

First Call

 `

 

2

 

Final Call

 `

 

3

 

 

 

12

(10+2)

Books of Bharat Limited

Journal 

Date

Particulars

L.F.

Debit

 ( `)

Credit

 ( `)

 

 

 

 

 

 

Bank A/c

Dr.

 

5,400

 

 

To Share Application A/c

 

 

5,400

 

(Application money received for 1,800 shares at  ` 3 per shares)

 

 

 

 

 

 

 

 

 

Share Application A/c

Dr.

 

5,400

 

 

To Share Capital A/c

 

 

3,600

 

To Securities Premium A/c

 

 

1,800

 

(Application money of 1,800 share transferred to Share Capital at  ` 2 per share and Securities Premium Re 1 per share)

 

 

 

 

 

 

 

 

 

Share Allotment A/c

Dr.

 

7,200

 

 

To Share Capital A/c

 

 

5,400

 

To Securities Premium A/c

 

 

1,800

 

(Share allotment due on 1,800 shares at  ` 4 per share including Re 1 securities premium)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

7,200

 

 

To Share Allotment A/c

 

 

7,200

 

(Share Allotment money received)

 

 

 

 

 

 

 

 

 

Share First Call A/c

Dr.

 

3,600

 

 

To Share Capital A/c

 

 

3,600

 

(Share first call due on 1,800 shares at  ` 2 per shares)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

3,600

 

 

To Share First Call A/c

 

 

3,600

 

(Share first call money received)

 

 

 

 

 

 

 

 

 

Share Final Call A/c

Dr.

 

5,400

 

 

To Share Capital A/c

 

 

5,400

 

(Share final call due on 1,800 shares at  ` 3 per share)

 

 

 

 

 

 

 

 

 

Bank A/c

 

5,400

 

 

To Share Final Call A/c

Dr.

 

 

5,400

 

(Share final call money received)

 

 

 

 

 

 

 

 

 

 

 As per the Schedule III of Companies Act, 2013, the Company's Balance Sheet is presented as follows.

Bharat Limited

An extract of Balance Sheet

Particulars

Note No.

 ( `)

I. Equity and Liabilities

 

 

1. Shareholders’ Funds

 

 

a. Share Capital

1

18,000

 

 

 

NOTES TO ACCOUNTS

Note No.

Particulars

 ( `)

1

Share Capital

 

 

Authorised Share Capital

 

 

20,000 shares of  ` 10 each

2,00,000

 

Issued Share Capital

 

 

 2,000 shares of  ` 10 each

20,000

 

Subscribed, Called-up and Paid-up Share Capital

 

 

1,800 shares of  ` 10 each

18,000

 

 

 

 

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