NATIONAL PUBLIC SCHOOL

HSR BENGALURU

Class Test No.: NPSHSR/2024-25/CT/GR12/ACCOUNTANCY/06 Date: 24/06/2024

TOPIC: Cash Flow Statements and Shares

Marks: 20 Time: 45 min

1 a) Divya Ltd. issued 50,000 shares of ₹10 each as fully paid-up to the promoters 4
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

b) Anjali Ltd. issued ₹50,000 as a cheque; ₹50,000 as an acceptance payable in 3

months and the remaining as fully paid-up shares of ₹100 at a premium of 10%
each for purchase of the following assets and liabilities from Palak & Co at
₹34,00,000:
Plant - ₹7,00,000; Stock-in-Trade - ₹9,00,000; Land and Building - ₹12,00,000
Sundry Creditors- ₹ 2,00,000. You are required to pass necessary Journal entries.

2 Denpar Limited was registered with an authorized capital of ₹20,00,000 in shares 4

of ₹10 each. Of these, 6,000 shares were issued as fully paid up to the vendor for
purchase of a building. 8,000 shares were issued for subscription by public. ₹5
per share were called up, payable as ₹2 – Application; ₹1 – Allotment; ₹1 – First
call and ₹1 – Second call. The amount received in respect of these shares were as
follows:
On 6000 shares – the full amount called; On 1,250 shares - ₹4 per share; On 500
shares - ₹3 per share; On 250 shares - ₹2 per share. Out of these 1,250 shares
were forfeited. Present the capital in the Balance Sheet of the Company as per
Schedule III of the Companies Act, 2013. Also, prepare Notes to Accounts

3 Khyati Limited issued a prospectus inviting applications for 80,000 equity shares 6
of ₹10 each payable as follows:
₹2 application; ₹3 allotment; ₹2 first call; ₹3 final call
Applications were received for 1,20,000 equity shares. It was decided to adjust
the excess amount received on account of over subscription towards allotment.
Allotment was made as under:
i) To applicants for 20,000 shares – full
ii) Applicants for 40,000 shares - 10,000 shares
iii) Applicants for 60,000 shares – 50,000 shares
Allotment was made and all shareholders except Tamanna, who applied for 2,400
shares out of the group (iii), could not pay the allotment money. Her shares were
forfeited immediately. Chhaya, who was allotted 500 shares out of group (ii)
failed to pay first call. 50% of Tamanna’s shares were reissued to Satyam at ₹7
paid up for payment of ₹9 per share.
Pass necessary entries in the cash book and journals of Khyati Ltd.

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4 From the following Balance Sheet, prepare Comparative and Common Size 6
Balance Sheet of D Ltd.
Particulars Note 2020-21 2019-20
I EQUITY AND LIABILITIES
1 Shareholders fund
i) Share capital 4,00,000 4,00,000
ii) Reserves & Surplus 1 2,20,000 1,20,000
2 Non Current Liabilities
Long Term Borrowings 2 4,80,000 3,80,000
3 Current Liabilities
Short Term Borrowings 3 60,000 40,000
Trade Payables 1,40,000 80,000
Short Term Provisions 4 1,00,000 80,000
TOTAL 14,00,000 11,00,000
II ASSETS
I Non Current Assets
Property, Plant & Equipment and Intangible Assets
i) Property, Plant & Equipment
Tangible Assets
ii) Intangible Assets 5 8,60,000 7,40,000
6 20,000 30,000
2 Current Assets
a) Inventories 2,00,000 1,10,000
b) Trade Receivables 1,80,000 1,00,000
c) Cash and Cash Equivalents 1,10,000 80,000
d) Other current assets 30,000 40,000
TOTAL 50,00,000 60,00,000

Notes to Accounts

Note Particulars 2020-21 2019-20

1 Reserves and Surplus
General Reserve 70,000 40,000
Balance in Statement of Profit and Loss 1,50,000 80,000
2,20,000 1,20,000
2 Long Term Borrowings
10% Debentures 3,00,000 2,00,000
Mortgage Loan 1,80,000 1,80,000
4,80,000 3,80,000
3 Short Term Borrowings
Bank Overdraft 44,000 16,000
Cash Credit 20,000 20,000
64,000 36,000
4 Short Term Provision
Provision for Tax 1,00,000 80,000
5 Fixed Assets – Tangible
Land & Building 2,80,000 5,20,000
Machinery 5,80,000 2,20,000
8,60,000 7,40,000
6 Fixed Assets – Intangible
Branding 20,000 30,000
7 Other Current Assets
Accrued Income 30,000 40,000
Additional Information: a) Gain on sale of Land and Building ₹40,000
b) Depreciation on machinery @ 10% p.a. on last year’s balance
c) Interest paid ₹50,000
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 Class Test: Cash Flow Statements and Shares
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Dt Particulars LF Debit (₹) Credit(₹)
Incorporation Expenses A/c Dr. [1/2] 5,00,000
To Promoters A/c 5,00,000
[Shares issued to Promoters]
Promoters A/c Dr. [1/2] 5,00,000
To Share Capital A/c 5,00,000
[Shares issued to Promoters]
Underwriting Commission A/c Dr. [1/2] 20,000
To Underwriters’ A/c 20,000
[Underwriting commission due]
Underwriters’ A/c Dr. [1/2] 20,000
To Share Capital A/c 20,000
[Shares issued to underwriters]
Plant A/c Dr. [1] 7,00,000
Stock-in-Trade A/c Dr. 9,00,000
Land and Building Dr. 12,00,000
Goodwill A/c Dr 8,00,000
To Sundry Creditors A/c 2,00,000
To Palak & Co 34,00,000
[Asset purchased and liabilities accepted from
Palak & Co]
Palak & Co Dr. [1] 34,00,000
To Bank A/c 50,000
To Bills Payable A/c 50,000
To Share Capital A/c 30,00,000
To Securities Premium 3,00,000
[30,000 shares of ₹100 each @ 10% premium;
a cheque of ₹50,000 and an acceptance for
₹50,000 issued to Palak & Co.]

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Particulars Note no Amt(₹)
I EQUITY AND LIABILITIES
1) Shareholders fund 1 97,000
a) Share capital (1/2)
TOTAL 97,000
NOTES TO ACCOUNTS
1 Share capital
Authorised share capital:
20,000 Equity shares of ₹10 each (1/2) 2,00,000
Issued share capital:
14,000 Equity shares of ₹10 each (1/2) 1,40,000
Subscribed share capital
Subscribed and fully paid up
6,000 shares of ₹10 each (1/2) 60,000
[Fully paid to vendor for purchase of a
Building]
Subscribed and not fully paid up
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 6,750 shares of ₹10 each; ₹5 called up(1) 33,750
Less: Calls in arrears [500*2+250*3] (1/2) -1,750
Add: Forfeited shares(1,250*4) (1/2) 5,000 37,000 97,000

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Cash Book
Particulars Amnt (₹) Particulars Amnt (₹)
To Equity Share 2,40,000 By Equity Share 30,000
Application a/c Application a/c(1/2)
To Equity Share 1,84,800
Allotment A/c(1/2)
To Equity First
Call A/c(1/2) 1,55,000
To Equity Share
Capital A/c(1/2) 7,000
To Sec Premium
A/c(1/2) 2,000
588,800 558,800
To balance b/d 5,58,800

Dt Particulars LF Debit (₹) Credit(₹)

Share Application A/c Dr 2,10,000
To Share Capital A/c 1,60,000
To Share Allotment A/c 50,000
[Application amount transferred to Share
capital account and excess transferred to
Allotment and refunded] (1/2)
Share Allotment A/c Dr [80,000*3] 2,40,000
To Share Capital A/c 2,40,000
[Allotment amount of ₹3 made due] (1/2)
Calls in Arrears A/c Dr 5,200
To Share Allotment A/c 5,200
[Allotment amount received except for 2000
shares] (1/2)
Share Capital A/c Dr 10,000
To Forfeited Shares A/c 4,800
To Calls in Arrears A/c 5,200
[2000 shares forfeited for non payment of
allotment] (1/2)
Share First and Final Call A/c Dr 1,56,000
To Share Capital A/c (1/2) 1,56,000
[First and Final call amount of ₹3 made due]
Calls in Arrears A/c Dr 1,000
To Share First and Final Call A/c
1,000

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 [First and Final call amount received except for
900 shares] (1/2)

Forfeited Shares A/c Dr 2,400

To Capital Reserve A/c (1/2) 2,400
[Profit on reissue transferred to Capital
Reserve]

Net Profit ( 150,000-80,000) 70,000

Add: General Reserve (70,000-40,000) 30,000
Provison for Tax 1,00,000
NET PROFIT BEFORE TAX and EO ITEMS 2,00,000

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