SHAGUN BHAIYA ASPIRE INSTITUTE OF COMMERCE ACCOUNTANCY - XII

SHARES

Q.1 A Company allotted 20,000 shares to applications of 50,000 shares after rejecting 10,000 applications.
The ratio in which company allotted the shares will be

A) 5 : 3 B) 2 : 1 C) 5 : 2 D) 3 : 1

Q.2 Rohini, a holder of 2,000 equity shares of Surya Kiran Limited failed to pay her first call of ₹2 per
share. She had paid ₹14,000 before defaulting at her first call. The directors of Surya Kiran Limited decided
to forfeit her shares after the first call and decided to reissue them to Prabhas for ₹16,000 ₹9 paid-up. The
balance_______ of in Share Forfeiture Account will be transferred to_______

A) ₹12,000; Capital reserve B) ₹16,000; Securities Premium

C) ₹14,000; Capital reserve D) ₹8,000; securities premium

Q.3 choose the incorrect option:

A) Application money must be at least 6% of the nominal value of shares.

B) Discount on issue of shares applicable exclusively on sweat equity shares when issued for cash.

C) Share Forfeiture accounts debuted with the paid-amount on forfeited shares.

D) The forfeited shares can be reissued at par, premium or discount.

Q.4 Arrange in proper sequence:

i) Unpaid Shares are forfeited

ii) Shareholder defaulted at payment of call money

iii) Balance in Share forfeiture Account transferred to Capital Reserve

iv) Forfeited Shares are reissued

A) iv, i, iii, ii B) iv, ii, iii, I C) ii, iii, i, iv D) ii, i, iv, iii

FAME Pharmaceuticals Ltd. was incorporated with an Authorized capital of ₹50,00,000 divided into
5,00,000 equity shares of ₹10 each. The company invited applications for 3,00,000 equity shares of ₹10 each
at a premium of 20%. The amount was called up as follows: On application ₹3; On allotment ₹5 and On
First & Final Call - 2. Applications for 3,50,000 shares were received and allotment was as under:

A) To the applicants of 2,50,000 shares -2,25,000 shares

B) To the applicants of 1,00,000 shares 75.000 shares

The excess money received on application was to be adjusted towards allotment. On the basis of the above
information, answer the following questions:

Q.5 What is the Nominal Capital of FAME Pharmaceuticals Ltd.?

A) ₹30,00,000 B) ₹40,00,000 C) ₹50,00,000 D) ₹60,00,000
Q.6 How much application money was adjusted towards Allotment?

A) ₹1,50,000 B) ₹2,00,000 C) ₹3,50,000 D) ₹2,50,000

SHAGUN BHAIYA ASPIRE INSTITUTE OF COMMERCE ACCOUNTANCY - XII

Q.7 New India Limited was authorized with a capital of ₹10,50,000 divided into 1,05,000 equity shares of
₹10 each. The company issued 80,000 equity shares and the public subscribed for 90,000 shares. The
company called up ₹8 per share. The final call was not made. All the money called up was received with an
exception of 2,000 shares held by Cynthia who did not pay the first call of ₹3 per share. The company
decided to forfeit half of her share and these shares were reissued to Kenneth @ 7 per share; ₹8 paid up.
Present the Share Capital in the Balance Sheet of New India Limited.

Q.8 DCM Ltd issued 50,000 shares of ₹10 each payable as ₹2 per share on application, ₹3 per share on
allotment and ₹5 on first and final call.

Applications were received for 70,000 shares. It was decided that:

A. to refuse allotment to the applicants for 10,000 shares,

B. to allot 20,000 shares to Mohit who had applied for similar number, and

C. to allot the remaining shares on pro rata basis.

Mohit failed to pay the allotment money and Sachin who belonged to Category C and was allotted 3,000
shares paid the call money with allotment. Calculate the amount received on allotment.
Q.9 A Ltd. Forfeited 100 shares of Rs. 100 each issued at a premium of 50% to be paid at the time of
allotment on which first call of Rs. 30 per equity share was not received, final call of Rs. 20 is yet to be
made. These shares were reissued at Rs. 70 per share at Rs. 80 paid up. Pass necessary journal entries.

Q.10 Naveen Ltd. purchased the business of Puratan Ltd. at an agreed purchase consideration of ₹5,20,000.
The following assets and liabilities were taken over by Naveen Ltd.:

Book Value Agreed Value

(i) Sundry Debtors 2,80,000 3,00,000

(ii) Stock 1,50,000 1,40,000

(iii) Machinery 3,00,000 2,50,000

(iv) Creditors 2,20,000 2,00,000

(v) Furniture 80,000 60,000

The purchase consideration was met through:

(i) a cheque of ₹90,00

(ii) a promissory note of ₹1,00,000

(iii) Equity Shares of ₹10 each issued at a premium of 10%.

Pass the necessary Journal entries in the books of Naveen Ltd. to record the above transactions.

Q.11 Pantaloon Ltd. issued 50,000 Equity Shares of ₹10 each at a premium of 20%. The amount was called
as follows: On application - ₹4 per share; On allotment - ₹5 (including premium) and the balance on first
and final call. Applications were received for 75,000 shares and the allotment was provided as:
(i) To the applicants of 20,000 shares full allotment
(ii) To the applicants of 40,000 shares-20,000 shares

(iii) Balance to the remaining applicants.

SHAGUN BHAIYA ASPIRE INSTITUTE OF COMMERCE ACCOUNTANCY - XII

Raghu, holding 2,000 shares and belonging to category (ii) failed to pay his allotment money and the
company forfeited his shares immediately after allotment. His shares were reissued to Deva for ₹4 per share;
₹7 paid-up. Somu, another shareholder who applied for 1,500 shares under category (iii) failed to pay the
first and final call money and his shares were also forfeited. The company reissued 800 shares of Somu to
Kunal for ₹8 per share, fully paid - up. Pass necessary Journal entries by opening Calls-in-arrears Account
and showyour workings clearly.

Q.12

(i) Hardik holding 5,000 shares of ₹10 each, out of the 7,000 shares applied for under the Pro-rata
category failed to pay the allotment money of ₹ 3 per share and first and final call money of ₹4 per
share. His shares were forfeited after the first and final call and later reissued to Jaswant for ₹ 12 per
share, fully paid-up.
(ii) Rishabh who holds 7,000 shares of ₹10 each failed to pay his dues on allotment of ₹ 5 per share
(including ₹ 2 premium) and first and final call of ₹3 per share. The company reissued half of his
shares to Kartik at the maximum permissible discount.
Pass the necessary journal entries for the above cases

Q.13 Shyam Ltd invited applications for issuing 80,000 equity shares of Rs.10 each at a premium of Rs.40
per share. The amount was payable as follows:

On Application — Rs. 35 per share (including Rs.30 premium)

On Allotment — Rs. 8 per share (including Rs. 4 premium)

On First and Final call — Balance

Applications for 77,000 shares were received. Shares were allotted to all the applicants. Sundram to whom
7,000 shares were allotted failed to pay the allotment money. His shares were forfeited immediately after
allotment. Afterwards the first and final call was made. Satyam, the holder of 500 shares failed to pay the
first and final call. His shares were also forfeited. Out of the forfeited shares 1,000 shares were reissued at
Rs.50 per share fully paid - up. The reissued shares included all the shares of Satyam. Pass necessary
journal entries for the above transactions in the books of Shyam Ltd.