Unit-1 (Numerical Questions)

1. Shipping Limited issued 10,000 equity shares of $25 each, payable $5 on application, $10
on allotment, and $10 on first and final call.

All the shares are subscribed and the amount duly received. Pass the journal entries.

2. A company was registered with an authorized capital share of $2,500,000 divided into
10,000 preference shares of $100 each and 15,000 equity shares of $100 each.

Out of these, 4,000 preference shares and 8,500 equity shares were issued. These shares were
payable as under:

Preference Shares Equity Shares

On Application 20 20

On Allotment 30 40

On First Call 50 40

All shares were paid in full. You are required to prepare the necessary journal
entries, and a balance sheet.

3. The Adarsh Control Device Ltd. was registered with the authorised capital
of ₹ 3,00,000 divided into 30,000 shares of ₹ 10 each, which were offered to
the public. Amount payable as ₹ 3 per share on application, ₹ 4 per share on
allotment and ₹ 3 per share on first and final call. These shares were fully
subscribed and all money was dully received. Prepare journal entries.
4. Software Solution India Ltd. invited applications for 20,000 equity shares
of ₹ 100 each, payable ₹ 40 on application, ₹ 30 on allotment and ₹ 30 on first
and final call. The company received applications for 32,000 shares.
Application for 2,000 shares were rejected and money returned to applicants.
Applications for 10,000 shares were accepted in full and applicants for 20,000
shares allotted half of the number of shares applied and excess application
money adjusted into allotment. All money due on allotment and call was
received. Prepare Journal Entries.
5. Mona Earth Mover Limited decided to issue 12,000 shares of Rs.100 each payable at Rs.30
on application, Rs.40 on allotment, Rs.20 on first call and balance on second and final call.
Applications were received for 13,000 shares. The directors decided to reject application of
1,000 shares and their application money being refunded in full. The allotment money was
duly received on all the shares, and all sums due on calls are received except on 100 shares.
Record the transactions in the books of Mona Earth Movers Limited.
6. Janta Papers Limited invited applications for 1,00,000 equity shares of Rs. 25 each payable
as under: On Application Rs. 5.00 per share On Allotment Rs. 7.50 per share On First Call
Rs. 7.50 per share (due two months after allotment) On Second and Final Call Rs. 5.00 per
share (due two months after First Call) Applications were received for 4,00,000 shares on
January 01, 2017 and allotment was made on February 01, 2017. Record journal entries in the
books of the company to record these share capital transactions under each of the following
circumstances:
1. The directors decide to allot 1,00,000 shares in full to selected applicants and the
applications for the remaining 3,00,000 shares were rejected outright.
2. The directors decide to make a pro-rata allotment of 25 per cent of the shares applied for to
every applicant; to apply the balance of application money towards amount due on allotment;
and to refund the amount remaining thereafter.
3. The directors totally reject applications for 2,00,000 shares, accept full applications for
80,000 shares and make a pro-rata allotment of the 20,000 shares to remaining applicants and
the excess application money is to be adjusted towards allotment and calls to be made.
7. Jupiter Company Limited issued 35,000 equity shares of Rs. 10 each at a premium of Rs.2
payable as follows: On Application Rs. 3 On Allotment Rs. 5 (including premium) Balance
on First and Final Call The issue was fully subscribed. All the money was duly received.
Record journal entries in the books of the Company.
8. Honda Limited issued 10,000 equity shares of 100 each payable as follows: Rs. 20 on
application, Rs. 30 on allotment, Rs. 20 on first call and Rs. 30 on second and final calls
10,000 shares were applied for and allotted. All money due was received with the exception
of both calls on 300 shares held by Supriya. These shares were forfeited. Give necessary
journal entries.
9. Ashok Limited issued 3,00,000 equity shares of Rs. 10 each at a premium of Rs. 2 per
share, payable as Rs. 3 on application, Rs. 5 on allotment (including premium) and the
balance in two calls of equal amount. Applications were received for 4,00,000 shares and pro-
rata allotment was made to all the applicants. The excess application money was adjusted
towards allotment. Mukesh who was allotted 800 shares failed to pay both the calls and his
shares were forfeited after the second call. Record necessary journal entries in the books of
Ashok Limited and also show the balance sheet.
10. The director of Poly Plastic Limited resolved that 200 equity shares of Rs.100 each be
forfeited for non-payment of the second and final call of Rs.30 per share. Out of these, 150
shares were re-issued at Rs.60 per share to Mohit. Show the necessary journal entries.
11. A Ltd. Issued 10,000, 10% debentures of Rs,100 each at a premium of 5% payable as
follows: Rs. 10 on application; Rs.20 along with premium on allotment and balance on first
& final call. Record necessary journal entries.
12. Suyash Ltd. Issued 4,000, 9% debentures of Rs. 100 each on the following terms:
Rs.20 on Application, Rs. 20 on allotment, Rs.30 on First call, and Rs.30 on final call.
The public applied for 4,800 debentures. Application for 3,600 debentures were accepted in
full. Applications for 800 debentures were allotted 400 debentures and applications for 400
debentures were rejected.