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SE10210

The document contains journal entries for NBS Ltd from October 2016 to June 2019. It records the initial public offering of shares, calls on shares, forfeiture and reissue of shares, issue of preference shares and debentures, and declaration of dividend. Key events summarized are: 1) Initial public offering of 250,000 equity shares through share applications, allotments and calls on shares. 2) Forfeiture of 15,000 shares and reissue of the shares. 3) Issue of 50,000 preference shares through a call on shares. 4) Further issue of 25,000 equity shares. 5) Issue of 1,000 debentures to shareholders

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syed rahman
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24 views

SE10210

The document contains journal entries for NBS Ltd from October 2016 to June 2019. It records the initial public offering of shares, calls on shares, forfeiture and reissue of shares, issue of preference shares and debentures, and declaration of dividend. Key events summarized are: 1) Initial public offering of 250,000 equity shares through share applications, allotments and calls on shares. 2) Forfeiture of 15,000 shares and reissue of the shares. 3) Issue of 50,000 preference shares through a call on shares. 4) Further issue of 25,000 equity shares. 5) Issue of 1,000 debentures to shareholders

Uploaded by

syed rahman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

ACCOUNTING ENTRIES

1|Page
Question 1

Part 1

Journal Entries for NBS Ltd.


Date Particulars Amount (Dr.) Amount (Cr.)
01.10.2016 Bank A/c Dr. $23,00,000.00
To Share Application A/c $23,00,000.00
Refer Note-1

07.10.2016 Share Application A/c Dr. $23,00,000.00


To Share Capital A/c (250000 shares @$4) $10,00,000.00
To Share Allotment A/c $10,70,000.00
To Share Call A/c $1,50,000.00
To Bank A/c (20000 shares rejected@$4) $80,000.00
Refer Note-2

11.10.2016 Legal expenses Dr. $1,300.00


Share issue expenses Dr. $10,000.00
To Bank A/c $11,300.00

1.11.2016 Bank A/c Dr. $1,80,000.00


To Share Allotment A/c $1,80,000.00

1.11.2016 Share Allotment A/c Dr. $12,50,000.00


To Share Capital A/c (250000 shares @$5) $12,50,000.00

Share Call A/c Dr.


Bank A/c Dr.
To Share Capital A/c (250000 shares @$3) $7,50,000.00

Note-1
Computation of amount received on applications

Particulars Amount
50000 shares @ $12 $6,00,000.00
100000 shares @ $9 $9,00,000.00
200000 share @ $4 $8,00,000.00
Total amount received $23,00,000.00

Note-2
Apportionment of application money received
Total amount received $23,00,000.00
Amount apportioned on share application $10,00,000.00
(250000 share @ $ 4)
Amount of allotment received for 50000 shares @$5 $2,50,000.00
Amount of allotment received for 100000 shares @$5 $5,00,000.00
Excess amount of remaining shares 80000 @ $4 $3,20,000.00
Amount of call received for 50000 share @$3 $1,50,000.00
Amount refunded for rejected shares
20000 shares @$4 $80,000.00
Total amount received and apportioned $23,00,000.00

2|Page
Part-2

Journal Entries for NBS Ltd.


Amount Amount
Date Particulars (Dr.) (Cr.)
01.07.2018 Bank A/c Dr. $5,55,000.00
Calls in advance A/c Dr. $1,50,000.00
To Share final Call A/c $7,05,000.00
[$3 received for 235000 shares (250000-15000)]

01.07.2018 Share final Call A/c Dr. $7,05,000.00


To Equity share capital A/c $7,05,000.00

10.08.2018 Equity share capital A/c (15000 shares@$12) Dr. $1,80,000.00


To Share final Call A/c (15000 shares @$3) $45,000.00
To Forfeited shares A/c $1,35,000.00

01.09.2018 Bank A/c (15000 shares @$10) Dr. $1,50,000.00


Forfeited shares A/c Dr. $30,000.00
To Equity share capital A/c $1,80,000.00
Gain on forfeiture 15000*9 = $135000
Loss on reissue 15000*($12-$10)= $30000
Net Gain $135000-$30000= $105000

01.09.2018 Share forfeiture and reissue expense A/c Dr. $800.00


To Bank A/c $800.00

01.09.2018 Forfeited shares A/c Dr. $1,05,000.00


To Forfeited share reserve A/c $1,05,000.00

31.10.2018 Bank A/c Dr. $2,50,000.00


To Preference share call A/c (50000 shares@$5) $2,50,000.00

31.10.2018 Preference share call A/c Dr. $2,50,000.00


To Preference share capital A/c $2,50,000.00

30.11.2018 Bank A/c Dr. $2,50,000.00


To Equity share application A/c $2,50,000.00
250000/10= 25000 shares@$10 per share

30.11.2018 Equity share application A/c Dr. $2,50,000.00


To Equity share capital A/c $2,50,000.00

20.12.2018 Bank A/c Dr. $1,00,000.00


To 7% Debentures A/c $1,00,000.00
Shareholders of 100000 shares accept the offer
of one 7% debenture for every 100 shares
No. of debentures=1000 (100000/100)
1000 debentures @$100

28.06.2019 Retained earnings A/c Dr. $1,25,000.00


To Dividend payable $1,25,000.00

Question-2

At 30 June,2019, the Equity of NBS Ltd. Consisted of the


following:

50000 preference shares issued at $10, $500000 $5,00,000.00


250000 ordinary shares issued at $12, $3000000 $30,00,000.00
25000 ordinary shares issued at $10, $250000 $2,50,000.00
Share issue costs -$800.00
Call in advance $0.00
Forfeited share reserve $1,05,000.00
Retained earnings -$16,00,000.00
Total equity $22,54,200.00

3|Page

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