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12th Accountancy - Company Accounts Model Question Paper

Published on: 16/10/2019

Company Accounts

Download Tamil Nadu 12th Standard Accountancy question papers, model tests, one-mark questions, important questions, and public exam papers in PDF format. Free study materials and answer keys for TN State Board students.

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Std: 12th Standard - Accountancy

chapter: - Model Question paper

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Questions:

Generic 5

6 x 5 = 30

Anjali Flour Ltd. with a registered capital of Rs.4,00,000 in equity shares of Rs.10 each, issued 30,000 of such shares; payable Rs.2 per share on application, Rs.5 per share on allotment and Rs.3 share on first call. The issue was duly subscribed.
All the money payable was duly received but on allotment, one shareholder paid the entire balance on his holding of 500 shares. Give journal entries to record the transactions.

State the differences between preference shares and equity shares.

Thangam Ltd. issued 50,000 shares of Rs.10 each at a premium of Rs.2 per share payable as follows:

On application	Rs.5
On allotment	Rs.5 (including premium)
On first and final call	Rs.2

Issue was fully subscribed and the amounts due were received except Priya to whom 500 shares were allotted who failed to pay the allotment money and fist and final call money. Her shares were forfeited. All the forfeited shares were reissued to Devi at Rs.8 per share. Pass journal entries.

Sudha Ltd. offered 1,00,000 shares of Rs.10 each to the public payable Rs.3 on application, Rs.4 on share allotment and the balance when required. Applications for 1,40,000 shares were received on which the directors allotted as:
Applicants for 60,000 shares - Full
Applicants for 75,000 shares - 40,000 shares (excess money will be utilised for allotment)
Applicants for 5,000 shares - Nil
All the money due was received. Pass journal entries upto the receipt of allotment.

Bharath Ltd. issued 1,00,000 equity shares of Rs. 10 each to the public at par. The details of the amount payable on the shares are as follows:

On application	Rs.5 per share
On allotment	Rs.3 per share
On first and final call	Rs.2 per share

Application money was received for 1,20,000 shares. Excess application money was refunded immediately. Pass journal entries to record the above.

Thai Ltd. issued 1,00,000 equity shares of Rs. 10 each, payable Rs. 5 on application, Rs. 2 on allotment Rs. 2 on first call and Rs. 1 on final call. All the shares are subscribed and amount was duly received. Pass journal entries.

Generic 2

5 x 2 = 10

What is allotment?

Why are the shares forfeited?

What is meant by calls in arrear?

10.

What is a share?

11.

Anitha was holding 500 equity shares of Rs.10 each of Thanjavur Motors Ltd, issued at par. She paid Rs.3 on application, Rs.5 on allotment but could not pay the first and final call of Rs.2. The directors forfeited the shares for nonpayment of call money. Give Journal entry for forfeiture of shares.

Generic 3

3 x 3 = 9

12.

What is meant by issue of shares for consideration other than cash?

13.

Write a brief note on calls in advance.

14.

Gemini Ltd. forfeited 20 equity shares of Rs.10 each, Rs.7 called up, on which Mahesh had paid application and allotment money of Rs.5 per share. Of these 15 shares were reissued to Naresh by receiving Rs.6 per share paid up as Rs.7 per share. Pass journal entries for forfeiture and reissue.

Multiple Choice Question

7 x 1 = 7

15.

The liability of the shareholders of the company is limited to the extent of face value of the shares held by the ___________

(a)

shareholders

(b)

cardholders

(c)

debenture holders

(d)

none of these

16.

Profits are distributed among the shareholders in the form of ___________

(a)

(b)

dividends

(c)

both

(d)

none of these

17.

The capital of companies is divided into small units called __________

(a)

(b)

debentures

(c)

dividend

(d)

none of these

18.

Supreme Ltd. forfeited 100 shares of Rs.10 each for non-payment of final call of Rs.2 per share. All these shares were re-issued at Rs.9 per share. What amount will be transferred to capital reserve account?

(a)

Rs.700

(b)

Rs.800

(c)

Rs.900

(d)

Rs.1,000

19.

If a share of Rs.10 on which Rs.8 has been paid up is forfeited. Minimum reissue price is

(a)

Rs.10 per share

(b)

Rs.8 per share

(c)

Rs.5 per share

(d)

Rs.2 per share

20.

When shares are issued for purchase of assets, the amount should be credited to

(a)

Vendor’s A/c

(b)

Sundry assets A/c

(c)

Share capital A/c

(d)

Bank A/c

21.

The amount received over and above the par value is credited to

(a)

Securities premium account

(b)

Calls in advance account

(c)

Share capital account

(d)

Forfeited shares account

Assertion and reason

2 x 2 = 4

22.

Assertion (A): Authorised Capital is the maximum amount of capital which a company is authorised to raise and is stated in the Memorandum of Association.
Reason (R): It can also be called as 'Preference Capital'.
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true and (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true

23.

Assertion (A): The right to receive dividend at a specified rate before any dividend is paid.
Reason (R): It is an intangible asset as it has no physical existence.
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true and (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true

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Answers Key:

Generic 5

6 x 5 = 30

Particulars		Debit Rs.	Credit Rs.
Bank A/c (30000 x 2)	Dr	60,000
To Share application A/c			60,000
(Application money received)
Share application A/c	Dr	60,000
To Share capital A/c			60,000
(Application money transferred to share capital A/c)
Share allotment A/c (30,000 x 5)	Dr	1,50,000
To Share capital A/c			1,50,000
(Allotment money due)
Bank A/c (30,000 x 5)+ (500 x 3)	Dr	1,51,500
To Share allotment A/c			1,51,500
To Calls in advance A/c			1,500
(Allotment money received)
Share first call A/c 30,000 x 3	Dr	90,000
To share capital A/c			90,000
(First call money due)
Bank A/c (29,500 x 3)	Dr	88,500
Calls in advance A/c	Dr	1,500
To Share first call A/c			90,000
(First call money received and calls in advance adjusted)

	Basis	Equity shares	Preference shares
1.	Meaning	Equity shares are the ordinary share of the company representing the part ownership of the shareholder in the company.	Preference shares are the shares that carry preferential rights on the matters of payment of dividend and repayment of capital.
2.	Payment of dividend	The dividend is paid after the payment of all liabilities	Priority in payment of dividend over equity shareholders.
3.	Rate of dividend	Fluctuating	Fixed
4.	Voting rights	Equity shares carry voting rights	Normally, preference shares do not carry voting rights
5.	Convertibility	Equity shares can never be converted	Preference shares can be converted into equity shares.

In the books of Thangam Ltd. Journal entries
Particulars		Debit Rs.	Credit Rs.
Bank A/c (50,000 × 5)	Dr.	2,50,000
To Equity share application A/c			2,50,000
(Application money received)
Equity share application A/c	Dr.	2,50,000
To Equity share capital A/c			2,50,000
(Transfer of application money to share capital)
Equity share allotment A/c (50,000 × 5)	Dr.	2,50,000
To Equity share capital A/c (50,000 × 3)			1,50,000
To Securities premium A/c (50,000 × 2)			1,00,000
(Allotment money due)
Bank A/c (49,500 × 5)	Dr.	2,47,500
To Equity share allotment A/c			2,47,500
(Allotment money received except on 500 shares )
Equity share first and final call A/c (50,000 × 2)	Dr.	1,00,000
To Equity share capital A/c			1,00,000
(First and final call money due)
Bank A/c (49,500 × 2)	Dr.	99,000
To Equity share first and final call A/c			99,000
(First and final call money received)
Equity share capital A/c (500 × 10)	Dr.	5,000
Securities Premium A/c (500 × 2)		1,000	2,500
To Equity share allotment A/c (500 × 5)			1,000
To Equity share first and final call A/c (500 × 2)			2,500
To Forfeited shares A/c (500 × 5)
(500 shares forfeited for nonpayment of allotment and first and final call money)
Bank A/c (500 × 8)	Dr.	4,000
Forfeited shares A/c (500 × 2)	Dr.	1,000
To Equity share capital A/c (500 × 10)			5,000
(500 forfeited shares reissued)
Forfeited shares A/c (2,500-1,000)	Dr.	1,500
To Capital reserve A/c			1,500
(Gain on reissue of forfeited shares transferred to capital reserve)

In the books of Khan Ltd. Journal entries
Particulars		Debit Rs.	Credit Rs.
Bank A/c (1,40,000 × 3)	Dr.	4,20,000
To Equity share application A/c			4,20,000
(Application money received)
Equity share application A/c (1,00,000 × 3)	Dr.	3,00,000
To Equity share capital A/c			3,00,000
(Transfer of share application money to share capital)
Equity share application A/c (5,000 × 3)	Dr.	15,000
To Bank A/c			15,000
(Excess application money refunded)
Equity share application A/c (35,000 × 3)	Dr.	1,05,000
To Share allotment A/c			1,05,000
(Excess share application money utilised for allotment)
Equity share allotment A/c (1,00,000 × 4)	Dr.	4,00,000
To Equity share capital A/c			4,00,000
(Share allotment money due)
Bank A/c	Dr.	2,95,000
To Equity share allotment A/c			2,95,000
(Allotment money received)

In the books of Bharath Ltd. Journal entries
Particulars		Debit Rs.	Credit Rs.
Bank A/c (1,20,000 × 5)	Dr.	6,00,000
To Equity share application A/c			6,00,000
(Application money received)
Equity share application A/c (1,00,000 × 5)	Dr.	5,00,000
To Equity share capital A/c			5,00,000
(Transfer of share application money to share capital)
Equity share application A/c (20,000 × 5)	Dr.	1,00,000
To Bank A/c			1,00,000
(Excess share application money refunded)
Equity share allotment A/c	Dr.	3,00,000
To Equity share capital A/c			3,00,000
(Share allotment money due)
Bank A/c	Dr.	3,00,000
To Equity share allotment A/c			3,00,000
(Allotment money received)
Equity share first and final call A/c	Dr.	2,00,000
To Equity share capital A/c			2,00,000
(Share first and final call money due)
Bank A/c	Dr.	2,00,000
To Equity share first and final call A/c			2,00,000
(Share first and final call money received)

In the books of Thai Ltd. Journal entries
Particulars		Debit Rs.	Credit Rs.
Bank A/c	Dr.	5,00,000
To Equity share application A/c			5,00,000
(Application money received)
Equity share application A/c	Dr.	5,00,000
To Equity share capital A/c			5,00,000
(Transfer of share application money to share capital)
Equity share allotment A/c	Dr.	2,00,000
To Equity share capital A/c			2,00,000
(Share allotment money due)
Bank A/c	Dr.	2,00,000
To Equity share allotment A/c			2,00,000
(Allotment money received)
Equity share first call A/c	Dr.	2,00,000
To Equity share capital A/c			2,00,000
(Share first call money due)
Bank A/c	Dr.	2,00,000
To Equity share first call A/c			2,00,000
(Share first call money received)
Equity share second and final call A/c	Dr.	1,00,000
To Equity share capital A/c			1,00,000
(Share second and final call money due)
Bank A/c	Dr.	1,00,000
To Equity share second and final call A/c			1,00,000
(Share second and final call money received)

Generic 2

5 x 2 = 10

(i) Allotment means acceptance by a company of the offer made by an applicant to take shares.
(ii) It is done by Board of Directors.
(iii) On allotment, the applicant becomes the shareholder or member of the company.

When a shareholder defaults in making payment of allotment andlor call money, the shares may be forfeited. On forfeiture, the share allotment is cancelled and to that extent paid up share capital a reduced. The person ceases to be a shareholder of the company after the shares are forfeited.

When a shareholder fails to pay the amount due on allotment or on calls, the amount remaining unpaid is known a calls in arrears. In other words, the amount called up but not paid is calls in arrear.

10.

The capital of a company is divided into small units of fixed amount. These units are called shares. These are two types
(i) preference shares and
(ii) equity shares

11.

Particulars		Debit Rs.	Credit Rs.
Equity share capital A/c (500 × 10)	Dr.	5,000
To Equity share call A/c (500 × 2)			1,000
To Forfeited shares A/c (500 × 8)			4,000
(500 shares forfeited for non payment of call money)

Generic 3

3 x 3 = 9

12.

A company may issue shares for consideration other than cash when the company acquires fixed assets such as land and buildings, machinery, etc under such situation, the following journal entries are to be passed.

Particulars	Debit Rs.	Credit Rs.
(i) For Purchase of asset:
Respective asset A/c Dr	xxx
To Vendor A/c		xxx
(ii) For issue of shares:
Vendor A/c Dr	xxx
To Equity share capital A/c		xxx
To Securities premium A/c (if issued at premium)		xxx

A company may also issue shares a consideration for the purchase of business, to promoters for their services and to brokers and underwriters for commission.

13.

(i) The excess amount paid over the called up value of a share is known as calls in advance.
(ii) It is the excess money paid on application or allotment or calls. Such excess amount can be returned or adjusted towards future payment.
(iii) If the company decides to adjust such amount towards future payment, the excess amount may also be transferred to a separate account called call in advance.
(iv) Calls in advance does not form part of the company's share capital and no dividend is payable on such amount.
(v) In the balance sheet, it should be shown under current liabilities.

14.

In the books of Gemini Ltd. Journal entries
Particulars		Debit Rs.	Credit Rs.
Equity share capital A/c (20 × 7)	Dr.	140
To Equity share first call A/c (20 × 2)			40
To Forfeited shares A/c (20 × 5)			100
(Forfeiture of 120 shares, Rs.7 called up)
Bank A/c (15 × 6)	Dr.	90
Forfeited shares A/c		15
To Equity share capital A/c (15 × 7)			105
(Reissue of 15 forfeited shares @ Rs.6 per share)
Forfeited shares A/c	Dr	60
To Capital reserve A/c			60
(Gain on reissue of forfeited shares transferred to capital reserve account)