Allotment of Shares

Q.

From the following Balance Sheets of XY Ltd. as at 31-03-2018 and 31-03-2017 prepare a Cash Flow statement:
$$\begin{array}{cccc}\text{Particulars}& \text{Note}& 31-03-2018& 31-03-2017\\ & \text{No.}& & \\ \text{I. Equity And Liabilities:}& & \text{Rs.}& \text{Rs.}\\ \text{(1) Share holder's Funds:}& & & \\ \text{(a) Share Capital}& 1& 8,50,000& 4,60,000\\ \text{(b) Reserve and Surplus}& 2& 1,70,000& 2,40,000\\ \text{(2) Non - Current liabilities:}& & & \\ \text{Long term Borrowings}& 3& \underset{–}{1,80,000}& \underset{–}{2,00,000}\\ \text{Total}& & \underset{–}{12,00,000}& \underset{–}{9,00,000}\\ \text{II. Assets:}& & & \\ \text{(1) Non Current Assets:}& & & \\ \text{Fixed Assets}& & 7,00,000& 5,00,000\\ \text{(2) Current Assets:}& & & \\ \text{(a) Inventory}& & 2,50,000& 2,10,000\\ \text{(b) Trade Receivables}& & 1,90,000& 1,40,000\\ \text{(c) Cash and Cash Equivalents}& & \underset{–}{60,000}& \underset{–}{50,000}\\ \text{Total}& & \underset{–}{12,00,000}& \underset{–}{9,00,000}\end{array}$$
Notes :
(1)
$$\begin{array}{ccc}\text{Share Capital:}& 31-03-2018& 31-03-2017\\ \text{Equity Share Capital}& 7,50,000& 4,00,000\\ 8\%\text{Preference share Capital}& \underset{–}{1,00,000}& \underset{–}{60,000}\\ & \underset{–}{8,50,000}& \underset{–}{4,60,000}\\ \left(2\right)\text{Reserve and Surplus:}& & \\ \text{General reserve}& 50,000& 70,000\\ \text{Profit and Loss Balance}& \underset{–}{1,20,000}& \underset{–}{1,70,000}\\ & \underset{–}{1,70,000}& \underset{–}{2,40,000}\\ \left(3\right)\text{Long term Borrowings:}& & \\ 10\%\text{Debentures}& \underset{–}{1,80,000}& \underset{–}{2,00,000}\end{array}$$
Additional Information
(i) During the year machine costing Rs. 80, 000 was sold for Rs. 50, 000.
(ii) Interim Dividend paid on equity share capital Rs. 80, 000

Q.

From the following balance sheets of ABC Ltd., Find out cash from operating activities only:
$$\begin{array}{cccc}\text{Particulars}& \text{Note No.}& 31-03-2017& 31-03-2016\\ \text{I. Equity and Liabilities:}& & & \\ \left(1\right)\text{Shareholder's Funds:}& & & \\ \left(a\right)\text{Share Capital}& & 35,000& 30,000\\ \left(b\right)\text{Reserve and Surplus}& 1& 22,000& 3,500\\ \left(2\right)\text{Non - Current Liabilities}& & & \\ \text{Long term Borrowings}& 2& 25,000& 21,000\\ \left(3\right)\text{Current Liabilities}& & & \\ \text{Trade Payables}& & \underset{–}{12,500}& \underset{–}{8,500}\\ \text{Total}& & \underset{–}{94,500}& \underset{–}{63,000}\\ \text{II. Assets:}& & & \\ \left(1\right)\text{Non- Current Assets:}& & & \\ \left(a\right)\text{Fixed Assets}& & & \\ \left(i\right)\text{Tangible Assets}& 3& 41,000& 32,000\\ \left(ii\right)\text{Intangible Assets}& 4& 8,000& 10,000\\ \left(b\right)\text{Non Current Investments}& 5& 8,000& 3,000\\ \left(2\right)\text{Current Assets:}& & & \\ \left(a\right)\text{Inventory}& & 24,500& 6,000\\ \left(b\right)\text{Cash and Cash Equivalents}& & \underset{–}{13,000}& \underset{–}{12,000}\\ \text{Total}& & \underset{–}{94,500}& \underset{–}{63,000}\end{array}$$
Notes:
$$\begin{array}{cccc}\left(1\right)& \text{Reserve and Surplus:}& 2017& 2016\\ & \text{General Reserve}& 15,000& 9,500\\ & \text{Profit and Loss Balance}& \underset{–}{7,000}& \underset{–}{(6,000)}\\ & & \underset{–}{22,000}& \underset{–}{3,500}\\ & \text{Bracket Denotes negative balance.}& & \\ \left(2\right)& \text{Long- term Borrowings:}& & \\ & 10\%\text{Debentures}& \underset{–}{25,000}& \underset{–}{21,000}\\ \left(3\right)& \text{Tangible Assets:}& & \\ & \text{Machinery}& 54,000& 41,000\\ & (-)\text{Provision for Depreciation}& \underset{–}{13,000}& \underset{–}{9,000}\\ & & \underset{–}{41,000}& \underset{–}{32,000}\\ \left(4\right)& \text{Intangible Assets:}& & \\ & \text{Goodwill}& \underset{–}{8,000}& \underset{–}{10,000}\\ \left(5\right)& \text{Rate of interest on Investments is}10\%p.a.& & \end{array}$$

Additional Information:
1. Debentures were issued on 31.3.2017
2. Investments were made on 31.3.2017

Q.

Following is the Balance Sheet of Wisben Led , as on 31st March, 2012.

$$\begin{array}{cccc}\text{Particulars}& \text{Notes to}& \text{Current Year}& \text{Previous Year}\\ & & \text{(Rs)}& \text{(Rs)}\\ \text{1. Equity and Liabilities :}& & & \\ \text{(1) Shareholders' Funds}& & & \\ \text{(a) Share Capital}& & 7,00,000& 6,00,000\\ \text{(b) Reserve and Surplus (Profit and Loss Balance)}& & 2,00,000& 1,10,000\\ \text{(2) Non-current Liabilities}& & & \\ \text{Long-term Borrowings}& & 3,00,000& 2,00,000\\ \text{(3) Current Liabilities}& & & \\ \text{Trade Payables}& & 30,000& 25,000\\ \text{Total}& & 12,30,000& 9,35,000\\ \text{II. Assets :}& & & \\ \text{(1)Non-current Assets}& & 11,00,000& 8,00,000\\ \text{(a) Fixed Asset : Tangible Assets}& & & \\ \text{(2) Current Assets}& & & \\ \text{(a)Inventories}& & 70,000& 60,000\\ \text{(b) Trade Receivables}& & 32,000& 40,000\\ \text{CAsh and Cash Equivalents}& & 28,000& 35,000\\ \text{Total}& & 12,30,000& 9,35,000\end{array}$$

Adjustments : During the year a piece of machinery of the book value of Rs 80, 000 was sold for Rs 65, 000.Depreciation provided on tangible assets during the year amounted to Rs 2, 00, 000. Prepare a Cash Flow Statement.

Q.

Anish Limited issued 30, 000 equity shares of Rs 100 each payable at Rs 30 on application, Rs 50 on allotment and Rs 20 on Ist and final call. All money was duly received.

Record these transactions in the journal of the company.

Q. When shares are forfeited, share capital account will be debited by:

[0.88 marks]

1. Face value of shares
2. Market value of shares
3. Paid-up value of shares
4. Called-up value of shares

Q.

On January 01, 2012, X. Ltd. issues 5, 000, 8% Debentures of Rs 100 each repayable at par at the end of three years. It has been decided to set up a cumulative sinking fund for the purpose of their redemption. The investments are expected to realise 4% net. The Sinking Fund Table shows that Rs 0.320348 amounts to one rupee @4% per annum in three years. On December 31, 2015 the balance at bank was Rs 2, 42, 360 and the investments realised Rs 3, 25, 000. The debentures were paid off.

Give journal entries and show ledger account.

Q.

Give journal entries for the following transactions:

1. To record the Realisation of various assets and liabilities,

2. A Firm has a Stock of Rs 1, 60, 000. Aziz, a partner took over 50% of the Stock at a discount of 20%,

3. Remaining Stock was sold at a profit of 30% on cost,

4. Land and Buildging (book value Rs 1, 60, 000) sold for Rs 3, 00, 000 through a broker who charged 2%, commission on the deal,

5. Plant and Machinery (book value Rs 60, 000) was handed over to a Creditor at an agreed valuation of 10% less than the book value,

6. Investment whose face value was Rs 4, 000 was realised at 50%.

Q.

Ashu And Harish are partners sharing profit and losses as 3: 2 They decided to dissolve the firm on december 31. 2012. Their balance sheet on the above date was
$$\begin{array}{cccccccc}& & & & \text{Balance Sheet of Ashu and Harish}& & & \\ & & & & \text{as on December 31. 2012}& & & \end{array}$$
$$\begin{array}{ccccc}\text{Liabilities}& & \text{Amt.}& \text{Assets}& \text{Amt.}\\ \text{Capitals}& & & \text{Building}& 80,000\\ \text{Ashu}& 1,08,000& & \text{Machinery}& 70,000\\ \text{Harish}& \underset{–}{54,000}& 1,62,000& \text{Furniture}& 14,000\\ \text{Creditors}& & 88,000& \text{Stock}& 20,000\\ \text{Bank Overdraft}& & 50,000& \text{Investment}& 60,000\\ & & & \text{Debtors}& 48,000\\ & & & \text{Cash in Hand}& 8,000\\ & & \underset{–}{}& & \underset{–}{}\\ & & 3,00,000& & 3,00,000\\ & & \underset{–}{}& & \underset{–}{}\end{array}$$

Ashu is to take over the building at Rs. 95, 000 and Machinery and Furniture is taken over by Harish at value of Rs. 80, 000. Ashu agreed to pay creditor and Harish agreed to meet bank overdraft. Stock and Investments are taken by both partner in profit sharing ratio. Debtors realised for Rs. 46, 000. Expenses of realisation amounted to Rs. 3, 000.
Prepare necessary ledger account.

Q.

Q.

Sumit Machine Ltd issued 50, 000 shares of Rs 100 each at discount of 5%. The shares were payable Rs 25 on application, Rs 40 on allotment and Rs 30 on first and final call. The issue were fully subscribed and money were duly received except the final call on 400 shares. The discount was adjusted on allotment. Give journal entries and prepare balance sheet.

Q.

Which letters are sent to the shareholders to whom shares have been allotted ?

1. None of the above

2. Letters of allottment

3. Letters of appreciation

4. Letters of regret

Q.

B.Ltd. purchased assets of the book value of Rs 4, 00, 000 and took over the liability of Rs 50, 000 from Mohan Bros. It was agreed that the purchase consideration, settled at Rs, 3, 80, 000, be paid by issuing debentures of Rs 100 each.

What Journal entries will be made in the following three cases, if debentures are issued: (a) at par; (b) at discount; (c) at premium of 10%? It was agreed that any fraction of debentures be paid in cash.

Q.

Q. Unrepresented cheques are also referred as __________.

1. uncollected cheques
2. uncredited cheques
3. outstanding cheques
4. bounced cheques

Q.

The first step in the issue of shares is __________.

1. None of the above

2. Allotment of Shares

3. Issue of Prospectus

4. Receipt of Applications

Q. Zoya Ltd. issued 10, 000 shares of ₹10 each payable as ₹3 on application, ₹2 on allotment, ₹3 on first call, and ₹2 on the second and final call. K, a shareholder of 100 shares paid only application and allotment money. Y, a shareholder of 250 shares did not pay second and final call money. Calculate the total amount of calls-in-arrear:

[2 marks]

1. ₹1, 000
2. ₹500

3. ₹300

4. ₹3, 500

Q.

DG Ltd Purchased assets of Rs 2, 50, 000 from VG Ltd . DG Ltd issued equity shares of Rs 50 each fully paid in consideration at a discount of Rs 30. Calculate the no of shares issued.

1. 31, 250

2. 21, 250

3. 12, 500

4. 51, 250

Q.

In case a company does not have sufficient funds for the purchase of fixed assets or for payment to creditors it may offer and allot its shares to vendor/ creditors in lieu of cash. In such a case, which account is debited ?

1. Goodwill account

2. Share application account

3. Share capital account

4. Vendor/ Creditor`s account

Q.

The next step in the issue of shares after receiving share application money is ___

1. None of the above

2. Allottment of shares

3. Receiving Application money

4. Issue of Prospectus

Q.

Provision for bad debts are created by ____________ profit and loss account. a) Debiting b) Adding c) Crediting d) Deducting

Q.

PRACTICAL PROBLEMS

(Full Subscription)

The HMT Ltd. issued 15, 000 Equity shares of Rs 10 each, payable as under-

On Application	Rs 3	On Allotment	Rs 2
On First Call	Rs 3	On Final Call	Rs 2

All the shares were fully subscribed by the public. All the money due on installments were received.

Pass journal entries to record the above transactions in the books of the company.

Q.

Shares are alloted after _________

1. None of the above

2. Not sure

3. No

4. Yes

Q.

DG Ltd Purchased assets of Rs 2, 50, 000 from VG Ltd . DG Ltd issued equity shares of Rs 50 each fully paid in consideration at a premium of Rs 30. Calculate the no of shares issued.

1. 4, 125 shares

2. 3, 125 shares

3. 2, 125 shares

4. 5, 125 shares

Q.

DG Ltd Purchased assets of Rs 2, 50, 000 from VG Ltd . DG Ltd issued equity shares of Rs 50 each fully paid in consideration. Which of the following is true ?

1. None of the above

2. Share capital account shall be debited with Rs 250000

3. Share capital account shall be credited with Rs 250000

4. Share capital account shall be credited with Rs 5000

Q.

Bansal Heavy machine Ltd purchased machine worth Rs 3, 20, 000 from Handa Trader. Payment was made as Rs 50, 000 cash and remaining amount by issue of equity share of the face value of Rs 100 each fully paid at an issue price of Rs 90 each.

Give journal entries to record the above transaction.

Q.

x ltd. invited applications for 10, 000 equity share of Rs 10 each assued at 20% premium. The whole amount was payable on application. the issue was undersubscribed by 1, 000 share. pass the journal entries

Q. N Ltd. had 9, 000, 8% preference shares of Rs. 100 each, fully paid up. The company decided to redeem these preference shares at par by the issue of sufficient number of equity shares. How many equity shares are required to be issued if new equity shares are to be issued at Rs. 10 each?

1. 93, 333
2. 90, 000
3. 1, 00, 000
4. 75, 000

Q. Objective Type Question :
Answer in one Sentence only :

What is allotment of shares?

Q. Companies Act, $2013$ contains ______ sections.

1. $487$
2. $290$
3. $380$
4. $470$

Q. 1, 00, 000 equity shares of Rs. 10 each are issued at a discount of 10% to redeem the preference shares, the proceeds of a fresh issue under Section 80 is _______.

1. Rs. 10, 00, 000
2. Rs. 9, 00, 000
3. Rs. 90, 000
4. nil