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    Accounts Answer Key 240720 140950

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    Gargee

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    © All Rights Reserved
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    Accounts Answer Key 240720 140950

    Uploaded by

    Gargee
    6 views3 pages

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    © © All Rights Reserved

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    PDF, TXT or read online from Scribd

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    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    6 views3 pages

    Accounts Answer Key 240720 140950

    Uploaded by

    Gargee

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    Jaju’s Professional Academy

    CA Foundation - Solutions

    Q.1.
    Solution :- In the books of X company Ltd.
    Journal Entries
    Date Particulars Rs. Rs.
    (a) Bank A/c Dr. 27,00,000
    To Debentures Application A/c 27,00,000
    (Being the application money received on 5,000
    debentures@ Rs. 450 each)
    Debentures Application A/c Dr. 27,00,000
    Discount on issue Debentures A/c Dr. 3,00,000
    To 14% Debentures A/c 30,00,000
    (Being the issue of 5,000 14% Debentures @
    90% as per Boards Resolution No… dated…)

    (b) Fixed Assets A/c Dr. 12,00,000


    To Vendor A/c 12,00,000
    (Being the purchase of fixed assets from vendor)

    Vendor A/c Dr. 12,00,000


    Discount on issue of Debentures A/c Dr. 3,00,000
    To 14% Debentures A/c 15,00,000
    (Being the issue of debentures of Rs. 15,00,000
    to Vendor to satisfy his claim)
    (c) Bank A/c Dr. 10,00,000
    To Bank Loan A/c (See Note) 10,00,000
    (Being a loan of Rs. 10,00,000 taken from bank
    by issuing debentures of Rs.15,00,000 as
    collateral security)
    Note :- No entry is made in the books of account of the company at the time of making
    issue of such debentures in the Balance Sheet due to the fact that the debentures
    being issued as collateral security and outstanding are shown under the respective
    liability.

    Q.2.
    Solution : Journal
    Date Particulars Dr. (Rs.) Cr. (Rs.)
    Bank A/c Dr. 65,000
    To Share Application A/c 65,000
    (For application money received on 750 shares @
    Rs. 50 per share)
    Share Application A/c Dr. 65,000
    To Equity Share Capital A/c 65,000
    (For disposition of application money received)
    Preference Share Capital A/c Dr. 90,000
    Premium on Redemption of
    Preference Share A/c Dr. 9,000
    To Preference Shareholders A/c 99,000
    (For amount payable on redemption of preference
    shares)
    Bank A/c Dr. 18,000
    Profit and loss A/c (loss on sale) A/c Dr. 500
    To Investment A/c 18,500
    (For sale of investments at a loss of Rs. 3,500)
    Profit and Loss A/c Dr. 25,000
    To Capital Redemption Reserve A/c 25,000
    (For transfer to CRR out of divisible profits an
    amount equivalent to excess of nominal value of
    preference shares over proceeds (face value of
    equity shares) i.e. Rs. 90,000 – Rs. 65,000)
    Preference Shareholder A/c Dr. 99,000
    To Bank A/c 99,000
    (For payment of preference shareholders)
    Profit and Loss A/c Dr. 9,000
    To Premium on Redemption of Preference 9,000
    Shares A/c
    (For writing off premium on redemption out of
    profits)
    Working Note :
    Calculation of Number of Shares Rs.
    Amount payable on redemption (Rs. 90,000 + 10% of Rs. 90,000) 99,000
    Less : Sale price of investment (18,000)
    81,000
    Less : Available bank balance (31,000 – 15,000) (16,000)
    Funds from fresh issue 65,000
    No. of shares = 65,000/50 = 1300 Shares.

    Q.3.
    Solution :- Journal Entries
    Rs. Rs.
    8% Preference Share Final Call A/c Dr. 15,00,000
    To 8% Preference Share Capital A/c 15,00,000
    (For final call made on preference shares @ Rs. 30 each to
    make them fully paid up)
    Bank A/c Dr. 15,00,000
    To 8% Preference shares Final Call A/c 15,00,000
    (For receipt of final call money on Preference shares)
    Bank A/c Dr. 10,00,000
    To Equity Share Application A/c 10,00,000
    (For receipt of application money on 50,000 equity shares @
    Rs. 20 per share)
    Equity Share Application Dr. 10,00,000
    To Equity Share Capital A/c 10,00,000
    (For capitalisation of application money received)

    Equity Share Allotment A/c Dr. 17,50,000


    To Equity Share Capital A/c 12,50,000
    To Securities Premium A/c 5,00,000
    (For allotment money due on 50,000 equity shares @ Rs. 35
    per share including a premium of Rs. 10 per share)
    Bank A/c Dr. 17,50,000
    To Equity Share Allotment A/c 17,50,000
    (For receipt of allotment money on equity shares)
    General Reserve A/c Dr. 27,50,000
    To Capital Redemption Reserve A/c 27,50,000
    (For transfer of CRR the amount not covered by the proceeds
    of fresh issue of equity shares i.e. 50,00,000 – 10,00,000 –
    12,50,000)
    8% Preference Share Capital A/c Dr. 50,00,000
    Premium on Redemption of Preference Share A/c Dr. 5,00,000
    To Preference Shareholders A/c 55,00,000
    (For amount paid to preference shareholders)
    Preference Shareholders A/c Dr. 55,00,000
    To Bank A/c 55,00,000
    (For amount paid to preference shareholders)
    General Reserve A/c Dr. 5,00,000
    To Premium on Redemption A/c 5,00,000
    (For writing off premium on redemption of preference
    shares)
    Note :- On the redemption of redeemable preference shares out of accumulated
    divisible profits it will be necessary to transfer to the Capital Redemption
    Reserve Account an amount equal to the amount repaid on the redemption of
    preference shares on account of face value less proceeds of a fresh issue of
    shares made for the purpose of redemption.

    Q.4.
    Solution :- Journal Entries in the books of Libra Ltd.
    Journal Entries
    Date Particulars Amount Rs. Amount Rs.
    Dr. Cr.
    1/5/2021 Bank A/c Dr. 2,00,00,000
    To Debenture Application A/c 2,00,00,000
    (Application money received on 1,50,000
    debentures @ Rs. 100 each0
    1/6/2021 Debenture Application A/c Dr. 2,00,00,000
    To 15% Debenture A/c 2,00,00,000
    (Allotment of 1,50,000 debentures to
    applicants and 50,000 debentures to
    underwriters)
    1/6/2021 Debenture Redemption Investment A/c 12,00,000
    To Bank A/c Dr. 12,00,000
    (2,00,000 x 100 x 15% x 40%)
    (Being Investments made for redemption
    purpose)
    30/9/2021 Debenture Interest A/c Dr. 10,00,000
    To Bank A/c 10,00,000
    (Interest paid on debentures for 4 months
    @ 15% on Rs. 2,00,00,000)
    31/12/2021 15% Debentures A/c Dr. 1,20,00,000
    To Equity Share Capital A/c 20,00,000
    To Securities Premium A/c 1,00,00,000
    (Conversion of 60% of debentures into
    shares of Rs. 60 each with a face value of
    Rs. 10)
    31/3/2022 Debenture Interest A/c Dr. 10,50,000
    To Bank A/c 10,50,000
    (Interest paid on debentures for the half
    year) (Refer working note)

    Working Note :
    Calculation of Debenture interest for the half year ended 31st March, 2022
    On Rs. 80,00,000 for 6 months @ 15% = Rs. 6,00,000
    On Rs.1,20,00,000 for 3 months @ 15% = Rs. 4,50,000
    = Rs. 10,50,000

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