Problems on issue of shares

Issue of shares for immediate full consideration

Non-cash consideration
1. Kailash Ltd. Purchased the business of Ram Bros. for Rs.54,00,000 payable in fully
paid shares of Rs.100 each. What entries will be made in the books of Kailash Ltd., if
such issue is (a) at par, (b) at a premium of 20% and, (c) at a discount of 10%.

Cash Consideration
2. Balu Co. Ltd., issued 50,000 equity shares of Rs.10 each to the public on condition
that full amount of shares will be paid in a lump sum. All these shares were taken up
and paid by the public. Pass journal entries in the books of company when shares are
issued (a) at par, (b) at a premium of 10% and (c) at a discount of 10%.

Issue of shares for consideration receivable in installments

(At Par)
3. Fashion Fabrics Ltd. issued 1,00,000 shares of Rs.10 each on 1st April, 2016. The
amount payable on these shares was as under:
Rs 2 per share on application.
Rs 3 per share on allotment.
Rs 5 per share on call.
Make journal entries.

4. The progressive Industries Limited was registered with a capital of Rs.50,00,000. It

issued 20,000 equity shares of Rs 100 each payable as Rs 25 on application, Rs 25 on
allotment and balance on 1st and final call. All the shares were applied for and
allotted. All money was duly received. Make necessary journal entries in the books of
the company

(At premium)
5. Luxury Cars Ltd. issued 1,00,000 shares of Rs.10 each at a premium of Rs.5 per
share, payable as:
On application Rs.4 (including Rs 2 premium) per share
On allotment Rs.8 (including Rs 3 premium) per share
On call Rs.3 per share
Applications were received for 1,00,000 shares and allotment was made to all. Make
journal entries.

(Calls in- advance)

6. India Software Ltd. offered 50,000 shares of Rs.10 each to the public payable as:
Rs.2 on application
Rs.3 on allotment
 Rs.2 on First call and the balance as and when required.
All the shares were applied for and duly allotted but Mukesh a shareholder holding
200 shares paid the entire balance on allotment. Make necessary journal entries.

(Calls- in – arrears)
7. ABC Ltd issued 20,000 shares of Rs.10 each payable as Rs.2 per share on application,
Rs.5 (including premium of Rs.2 per share) on allotment, Rs.3 per share on first call
and the balance on Final Call. All the money were received except the first call money
on 400 shares which was received later on with final call. Make necessary journal
entries.

(Forfeiture of shares and Re-issue of shares, and issue of shares at discount)

8. A Company issues 50,000 equity shares of Rs.100 each at a discount of 10% (allowed
at the time of allotment). The net amount payable is as follows: -
On applications Rs.20, On allotment Rs.20, On first call Rs.25, On final call Rs.25.
Sham holding 100 shares did not pay final call money. His shares were forfeited. Out
of these, 40 shares were re-issued to Shivali at Rs.70 per share. Pass journal entries.

Over -Subscription
(Forfeiture of shares and Re-issue of shares, Pro-rata Allotment and issue of shares at
discount)
9. Sri Krishna Agro Chemical Ltd. was registered with a capital of Rs.50,00,000 divided
into 50,000 shares of Rs.100 each. It issued 10,000 shares at discount of Rs.10 per
share, payable as :
Rs.40 per share on application
Rs.30 per share on allotment
Rs.20 per share on call.
Company received applications for 15,000 shares. Applicants for 12,000 shares were
allotted 10,000 shares and applications for the remaining shares were sent letters of
regret and their application money was returned. Call was made. Allotment and call
money was duly received. Make journal entries in the books of the company

10. The Full Health Care Ltd has offered to public for subscription 20,000 shares of
Rs.100 each payable as Rs.30 per share on application, Rs.30 per share on allotment
and the balance on call. Applications were received for 30,000 shares. Applications
for 5000 shares were rejected all together and application money was returned.
Remaining applicants were allotted the offered shares. Their excess application
money was adjusted towards some due on allotment. Calls were made and duly
received. Make journal entries in the books of the company.

11. Wye Co. issued for public subscription 20,000 equity shares of Rs.10 each at a
premium of Rs.2 per share payable as under :
On application Rs.2 per share
 On Allotment Rs.5 per share (including premium)
On first call Rs.2 per share
On final call Rs.3 per share
Applications were received for 30,000 Shares. Allotment was made pro-rata to the
applicants for 24,000 shares, the remaining applications being refused. Money overpaid
on applications was applied towards sum due on allotment. A, to whom, 800 shares
were allotted, failed to pay the allotment and call money. B, to whom 1,000 shares
were allotted, failed to pay the two calls. The shares of A and B were subsequently
forfeited after the second call was made. All the forfeited shares were reissued to C @
Rs.8 per share fully paid. Pass journal entries in the books of the company to record the
above transactions.

12. ACE Private Ltd. Issued a prospectus inviting applications for 50,000 shares of Rs.10
each. These shares were issued at par on the following terms:
On applications Rs.3, on allotment Rs.4, on first call Rs.2 and final call the balance.
Applications were received for 60,000 shares. Allotments were made on the
following basis:
(i) To applicants for 10,000 shares – in full;
(ii) To applicants for 20,000 shares – 15,000 shares;
(iii) To applicants for 30,000 shares – 25,000 shares.
The shares were fully called and paid up except amount of allotment, first and
final call not paid by those who applied for 2,000 shares out of the group applying for
20,000 shares.
All the shares on which calls were not paid were forfeited by the Board of
Directors.
1,000 forfeited shares were reissued as fully paid on receipt of Rs.8 per share.
Show the Journal Entries in the books of ACE Private Limited.

(Under Subscription)
13. A & Co Ltd, offered 25,000 shares of Rs.10 each to the public on the following terms:
Rs.2.50 to be paid on application
Rs.3 to be paid on allotment
Rs.2 to be paid on first call
Rs.2.50 to be paid on final call
The public applied for 22,000 shares which were allotted, the allotment taking place
on 1st April 2015. All money due on allotment was received by 15th May. Calls were
duly made but a shareholder holding 500 shares failed to pay the calls. Make entries
in the journal. Also prepare ledger accounts and balance sheet.