Question 21:
Faber Ltd. company invited
applications for 70,000 equity shares of `
100 each. The application money received @ `
30 per share was ` 27,00,000. Name the kind of subscription. List the three
alternatives for allotting these shares.
Answer:
Total Money Received on Application
= ` 27,00,000
Application money per share = `
30
Number of shares applied by the public=Total Appliaction money ReceivedApplication money per share=27,00,000÷30=90,000 shares
Share Applications invited by the company = 70,000
Since, Number of Shares applied for by
the company exceeds the number of shares
of fered by the company by 15,000 shares (i.e. 90,000 – 70,000). Therefore, it
is a case of oversubscription of shares.
The alternatives available with the company are as follows:
1. By rejecting the excess applications and allotting only 70,000 shares.
2. By making allotment to the 90,000 shares applicants on a proportionate or
pro-rata basis.
3. By making allotment to some on pro-rata basis and rejecting some applicants.
For e.g.: 85,000 share applicants are given 70,000 shares on pro-rata basis and
the remaining 5,000 shares have been rejected.
Question 22:
Sangam Ltd. invited applications for
20,000 Equity Shares of ` 100 each issued at par. The amount was payable on
application. The issue was oversubscribed by 5,000 shares and allotment was
made on pro rata basis. Pass necessary Journal entries.
Answer:
|
In
the books of Sangam Ltd. Journal |
|||||
|
Date |
Particulars |
|
L.F. |
Debit
(`) |
Credit
(`) |
|
|
Bank A/c (25,000 × 100) |
Dr. |
|
25,00,000 |
|
|
|
To Share Application and
Allotment A/c (25,000 × 100) |
|
|
|
25,00,000 |
|
|
(Being application money received
on 25,000 equity shares) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Application and Allotment
A/c |
Dr. |
|
25,00,000 |
|
|
|
To Share Capital A/c
(20,000 × 100) |
|
|
|
20,00,000 |
|
|
To Bank A/c (5,000 × 100) |
|
|
|
5,00,000 |
|
|
(Being share application and
allotment money adjusted for 10,000 |
|
|
|
|
|
|
shares and balance money refunded) |
|
|
|
|
Note: Since the entire amount is receivable on application so the
excess money on 2,000 shares has been refunded and allotment is made on a
pro-rata basis to 12,000 shareholders.
Question 23:
Citizen Watches Ltd. invited
applications for 50,000 shares of `
10 each payable ` 3 on application , `
4 on allotment and balance on first and final call . Applications
were received for 60,000 shares . Applications were accepted for 50,000 shares
and remaining applications were rejected . All calls were made and received
except First and Final call on 500 shares .
Pass the journal entries in the books of Citizen Watches Ltd .
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (`) |
Credit (`) |
|
|
|
Bank A/c (60,000×3) |
Dr. |
|
1,80,000 |
|
|
|
To Share Application A/c |
|
|
|
1,80,000 |
|
|
(Received application money on
60,000 shares) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Application A/c |
Dr. |
|
1,80,000 |
|
|
|
To Share Capital A/c
(50,000×3) |
|
|
|
1,50,000 |
|
|
To Bank A/c (10,000×3) |
|
|
|
30,000 |
|
|
(Transfer of application money to Share Capital) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Allotment A/c (50,000×4) |
Dr. |
|
2,00,000 |
|
|
|
To Share Capital A/c |
|
|
|
2,00,000 |
|
|
(Allotment due on 50,000 shares ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
2,00,000 |
|
|
|
To Share Allotment A/c |
|
|
|
2,00,000 |
|
|
(Allotment received) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share First and Final Call A/c
(50,000×3) |
Dr. |
|
1,50,000 |
|
|
|
To Share Capital A/c |
|
|
|
1,50,000 |
|
|
(Call money due on 50,000 shares) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c (49,500×3) |
Dr. |
|
1,48,500 |
|
|
|
To Share First and Final
Call A/c |
|
|
|
1,48,500 |
|
|
(Received call money on 49,500
shares) |
|
|
|
|
|
|
|
|
|
|
|
Question 24:
Tiny Toys Ltd. issued ` 10,00,000 shares of ` 100 each at a premium of ` 20 for subscription payable as:
` 10 per share on application,
` 40 per share and `
10 premium on allotment, and
` 50 per share and `
10 premium on final payment.
Over-payments on application were to
be applied towards amount due on allotment and over-payments on application
exceeding amount due on allotment was to be returned. Issue was oversubscribed
to the extent of 13,000 shares.
Applicants for 12,000 shares were allotted only 1,000 shares and applicants for
2,000 shares were sent letters of regret. All the money due on allotment and
final call was duly received.
Pass necessary entries in the company's books to record the above transactions.
Also, prepare company's Balance Sheet on completion of the above transactions.
Answer:
Amount payable as:
|
Application |
` |
10 |
|
|
Allotment |
` |
50 |
(40 +
10) |
|
First and Final Call |
` |
60 |
(50 +
10) |
|
|
|
120 |
(100 +
20) |
|
Books
of Tiny Toys Limited Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (`) |
Credit (`) |
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
2,30,000 |
|
|
|
To Share Application A/c |
|
|
2,30,000 |
|
|
|
(Share application money received
for 23,000 shares at ` 10 each) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Application A/c |
Dr. |
|
2,30,000 |
|
|
|
To Share Capital A/c |
|
|
1,00,000 |
|
|
|
To Share Allotment A/c |
|
|
50,000 |
|
|
|
To Bank A/c |
|
|
80,000 |
|
|
|
(Share application of 10,000 shares transferred to Share Capital, ` 50,000 adjusted on allotment and remaining amount
returned) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Allotment A/c |
Dr. |
|
5,00,000 |
|
|
|
To Share Capital A/c |
|
|
4,00,000 |
|
|
|
To Securities Premium A/c |
|
|
1,00,000 |
|
|
|
(Share allotment due on 10,000
shares at ` 50 each including `
10 premium) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
4,50,000 |
|
|
|
To Share Allotment A/c |
|
|
4,50,000 |
|
|
|
(Share allotment money received) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share First and Final Call A/c |
Dr. |
|
6,00,000 |
|
|
|
To Share Capital A/c |
|
|
5,00,000 |
|
|
|
To Securities Premium A/c |
|
|
1,00,000 |
|
|
|
(First and final call due on
10,000 shares at ` 60 each including `
10 premium) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
6,00,000 |
|
|
|
To Share First and Final Call A/c |
|
|
6,00,000 |
|
|
|
(Share first and final call money
received) |
|
|
|
|
|
|
|
|
|
|
|
Posting
in the Company's Balance Sheet
|
Tiny ToysLimited |
||
|
Balance
Sheet |
||
|
Particulars |
Note
No. |
(`) |
|
I. Equity and Liabilities |
|
|
|
1. Shareholders’ Funds |
|
|
|
a. Share Capital |
1 |
10,00,000 |
|
b. Reserves and Surplus |
2 |
2,00,000 |
|
2. Non-Current Liabilities |
|
|
|
3. Current Liabilities |
|
|
|
Total |
|
12,00,000 |
|
II. Assets |
|
|
|
1.Non-Current Assets |
|
|
|
2.Current Assets |
|
|
|
a. Cash and Cash Equivalents |
3 |
12,00,000 |
|
Total |
|
12,00,000 |
|
|
|
|
NOTES TO ACCOUNTS
|
|
||
|
Note
No. |
Particulars |
(`) |
|
1 |
Share Capital |
|
|
|
Authorised Share Capital |
|
|
|
…… shares of ` 100 each |
- |
|
|
Issued Share Capital |
|
|
|
10,000 shares of `
100 each |
10,00,000 |
|
|
Subscribed, Called up and Paid up Share Capital |
|
|
|
10,000 shares of `
100 each |
10,00,000 |
|
|
|
|
|
2 |
Reserves and Surplus |
|
|
|
Securities Premium |
2,00,000 |
|
|
|
|
|
3 |
Cash and Cash Equivalents |
|
|
|
Cash at Bank |
12,00,000 |
|
|
|
|
Working Notes:
|
Applied Shares |
Issued Shares |
Money
received on Application @
` 10 each |
Money
transferred to Share Capital @
` 10 each |
Excess |
Allotment
due @
` 50 each |
Excess
money adjusted on Allotment |
Excess
money after Allotment |
|
12,000 |
1,000 |
1,20,000 |
10,000 |
1,10,000 |
50,000 |
50,000 |
60,000 (return) |
|
2,000 |
NIL |
20,000 |
– |
20,000 (return) |
|
|
|
|
9,000 |
9,000 |
90,000 |
90,000 |
– |
4,50,000 |
– |
– |
|
23,000 |
10,000 |
2,30,000 |
1,00,000 |
|
5,00,000 |
50,000 |
60,000 |
|
Share Allotment due (10,000 share
× ` 50) |
5,00,000 |
|
Less:
Excess application money adjusted on allotment |
50,000 |
|
Money received on Allotment |
4,50,000 |
Ts Grewal Solution 2024-2025
Click below for more Questions
Class 12 / Volume – II