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Issue of Shares Question Part 1

Radhika Ltd. acquired the business of Geethika Stores as a going concern for Rs. 20,00,000. The assets acquired were valued at Rs. 50,00,000 and liabilities taken over were Rs. 10,00,000. Radhika Ltd. paid for the acquisition by issuing equity shares of Rs. 100 each. The document provides a transaction and asks the reader to pass the relevant journal entries to record it.

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Madhvi Gaur.
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69 views2 pages

Issue of Shares Question Part 1

Radhika Ltd. acquired the business of Geethika Stores as a going concern for Rs. 20,00,000. The assets acquired were valued at Rs. 50,00,000 and liabilities taken over were Rs. 10,00,000. Radhika Ltd. paid for the acquisition by issuing equity shares of Rs. 100 each. The document provides a transaction and asks the reader to pass the relevant journal entries to record it.

Uploaded by

Madhvi Gaur.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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~9 (Issue of Shares to Vendors)

Radhika Ltd. took over business of Geethika Stores as a going concern for a price of~ 20,00,000. The business consisted
of various assets valued at' 50,00,000 and corresponding liabilities of~ 10,00,000.
The company made the payment in equity shares of~ 100 each. Pass the journal entries to record the transaction.
Solution
Radhika Ltd.
Journal Entries

Purnima Shoe Company Ltd. acquired a building for its office costing f 5,40,000 from Jain Builders. The payment
was made by the issue of 5,400 fully paid equity shares oft 100 each. Pass journal entries.
(ii) Also determine the number of shares when the issue is at a premium of 20%.

Solution
Purnima Shoe Company Ltd.
Journal Entries

NOTE

Number of shares issued has been·calculated-as·u nder:


For making payment oft 120, the company issues l share

.
For making payment of,"" 5,40,000, the company issues 5,40,000
: _ __
120
J
.
= 4,500 shares
Nominal amount of Share Capital : f 4,500 x 100 = 4,50,000
Amount of Premium : 20% i.e., I/5th oft 4,50,000 0.000
2.36 Basic Corporate Accounting· "'
• J.ext and As .
s1gn,nt11~
Illustration 16 (Forfeiture After ·first Call)

Bhavna-Kareena Ltd offered 10 000 equity shares oft 100 each for subscr iption at a premiu m oft 20 per
as follows : sh
· , are payable
On Application f 10
On Allotme nt f 40 (includi ng premiu m)
On First Call f 20
On Second Call and balance on Final Call. f 30
The compa ny received applications for 12,000 shares and 10,000 shares were allotte d pro-rata.
Holders of 400 shares failed to pay the first call and after due notice, their shares were forfeited. The amounts
payable
on sec~nd call were paid in full except that a holder of 200 shares failed to pay.
250 of the 400 shares forfeited were re-issued, credited t 80 paid for f 50 per share.
The final call was met in full including the arrears of the second call.
Journalise the transactions including cash transactions in the books of the compa ny
Solution

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