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12th Standard Accountancy Chapter 7 Company Accounts Book Back Questions

Published on: 04/09/2019

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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Questions:

Generic 5

5 x 5 = 25

Aruna Mills Ltd. with a registered capital of Rs.5,00,000 in equity shares of Rs.10 each, issued 20,000 of such shares payable as follows; Rs. 4 per share on application,Rs.4 per share on allotment and Rs.2 per share on first and final 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 300 shares. Give journal entries to record the above.

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.

Keerthiga Company issued shares of Rs.10 each at 10% premium, payable Rs.2 on application, Rs.3 on allotment (including premium), Rs.3 on first call and Rs.3 on second and final call. Journalise the transactions relating to forfeiture of shares for the following situations:
(i) Mohan who holds 50 shares failed to pay the second and final call and his shares were forfeited.
(ii) Mohan who holds 50 shares failed to pay the allotment money, first call and second and final call money and his shares were forfeited.
(iii) Mohan who holds 50 shares failed to pay the allotment money and first call and his shares were forfeited after the first call.

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.

Khan Ltd. issued 50,000 shares of Rs.10 each to the public payable Rs.4 on application, Rs.4 on allotment and Rs.2 on first and final call. Applications were received for 65,000 shares. The directors decided to allot 50,000 shares on pro rata basis and surplus application money was utilised for allotment. Pass journal entries assuming that the amounts due were received.

Generic 3

3 x 3 = 9

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

Write a short note on
(a) Authorised capital
(b) Reserve capital

Anu Company forfeited 200 equity shares of Rs.10 each issued at par held by Thiyagu for nonpayment of the final call of Rs.3 per share. The shares were reissued to Laxman at Rs.6 per share. Show the journal entries for forfeiture and reissue.

Multiple Choice Question

5 x 1 = 5

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

10.

Match the pair and identify the correct option

(1) Under subscription	(i) Amount prepaid for calls
(2) Over subscription	(ii) Subscription above the offered shares
(3) Calls in arrear	(iii) Subscription below the offered shares
(4) Calls in advance	(iv) Amount unpaid on calls

(a)

(1)	(2)	(3)	(4)
(i)	(ii)	(iv)	(iv)

(b)

(1)	(2)	(3)	(4)
(iv)	(iii)	(ii)	(i)

(c)

(1)	(2)	(3)	(4)
(iii)	(ii)	(iv)	(i)

(d)

(1)	(2)	(3)	(4)
(iii)	(iv)	(i)	(ii)

11.

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

12.

Which of the following statement is false?

(a)

Issued capital can never be more than the authorised capital

(b)

In case of under subscription, issued capital will be less than the subscribed capital

(c)

Reserve capital can be called at the time of winding up

(d)

Paid up capital is part of called up capital

13.

A preference share is one
(i) which carries preferential right with respect to payment of dividend at fixed rate
(ii) which carries preferential right with respect to repayment of capital on winding up

(a)

Only (i) is correct

(b)

Only (ii) is correct

(c)

Both (i) and (ii) are correct

(d)

Both (i) and (ii) are incorrect

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Answers Key:

Generic 5

5 x 5 = 25

**In the books of Aruna Mills Ltd. Journal entries**
Particulars	Debit Rs.	Credit Rs.
Bank A/c (20,000 × 4)Dr	80,000
To Share application A/		80,000
(Application money received
Share application A/cDr.	80,000
To Share capital A/c		80,000
(Application money transferred to share capital A/c)
Share allotment A/c (20,000 × 4) Dr.	80,000
To Share capital A/c		80,000
(Allotment money due)
Bank A/c (20,000 × 4) + (300x2) Dr.	80,600
To Share allotment A/c		80,000
To Calls in advance A/c (300 × 2)		600
(Allotment money received)
Share first and final call A/c (20,000 × 2) Dr.	40,000
To Share capital A/c		40,000
(First and final call money due)
Bank A/c (19,700 × 2) Dr.	39,400
Calls in advance A/c Dr.	600
To Share first and final call A/c		40,000
(First call money received and calls in advance adjusted)

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)

(i) When final call money is not paid

In the books of Keerthiga Company Journal entries
Particulars		Debit Rs.	Credit Rs.
Equity share capital A/c (50 × 10)	Dr.	500
To Equity share second and final call A/c (50 × 3)			150
To Forfeited shares A/c (50 × 7)			350
(50 shares forfeited)

Note: Since the premium amount is received by the company, premium should not be cancelled
(ii) When allotment, first call money and second and final call money is not paid

Particulars		Debit Rs.	Credit Rs.
Share capital A/c (50 × 10)	Dr.	500
Share premium A/c (50 × 1)	Dr.	50
To Share allotment A/c (50 × 3)			150
To Share first call A/c (50 × 3)			150
To Share second and final call A/c (50 × 3)			150
To Shares forfeited A/c (50 × 2)			100
(50 shares forfeited)

(iii) When allotment and first call money is not paid

Particulars		Debit Rs.	Credit Rs.
Share capital A/c (50 × 7)	Dr.	350
Share premium A/c (50 × 1)	Dr.	50
To Share allotment A/c (50 × 3)			150
To Share first call A/c (50 × 3)			150
To Shares forfeited A/c (50 × 2)			100
(50 shares forfeited)

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 Khan Ltd. Journal entries
Particulars		Debit Rs.	Credit Rs.
Bank A/c (65,000 × 4)	Dr.	2,60,000
To Equity share application A/c			2,60,000
(Application money received)
Equity share application A/c (50,000 × 4)	Dr.	2,00,000
To Equity share capital A/c			2,00,000
(Transfer of share application money to share capital)
Equity share application A/c (15,000 × 4)	Dr.	60,000
To Equity share allotment A/c			60,000
(Excess share application money utilised for allotment)
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 (2,00,000 – 60,000)	Dr.	1,40,000
To Equity share allotment A/c			1,40,000
(Allotment money received)
Equity share first and final call A/c (50,000 × 2)	Dr.	1,00,000
To Equity share capital A/c			1,00,000
(Share first and final call money due)
Bank A/c	Dr.	1,00,000
To Equity share first and final call A/c			1,00,000
(Share first and final call money received)

Generic 3

3 x 3 = 9

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.

(a) Authorised capital:
It means such capital as is authorised by the memorandum of association. It is the maximum amount which can be raised as capital. It is also known as registered capital or nominal capital.
(b) Reserve capital :
Sec. 65 of Companies Act, 2013, only an unlimited company having share capital while Converting into a limited company may have a reserve capital. the company reserve a part of its subscribed Capital to be called up, only at the time of winding up. It is called reserve capitals.

In the books of Anu Company Journal entries
Particulars		Debit Rs.	Credit Rs.
Equity share capital A/c (200 × 10)	Dr.	2,000
To Equity share final call A/c (200 × 3)			600
To Forfeited shares A/c (200 × 7)			1,400
(200 shares forfeited)
Bank A/c (200 × 6)	Dr	1,200
Forfeited shares A/c (200 × 4)	Dr	800
To Share capital A/c (200 × 10)			2,000
(Forfeited shares reissued)
Forfeited shares A/c (1,400-800)	Dr.	600
To Capital reserve A/c			600
(Gain on reissue of forfeited shares transferred to capital reserve account)