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.

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.

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.

Joy Company issued 10,000 equity shares at Rs.10 per share payable Rs.5 on application, Rs.3 on allotment and Rs.2 on first and final call. The public subscribed for 9,000 shares. The directors allotted all the 9,000 shares and duly received the money. Pass the necessary journal entries.

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

10 x 2 = 20

What are the differences between over subscription and under subscription?

What is prorata allotment?

What is allotment?

Definition of a Company.

10.

Why are the shares forfeited?

11.

Write a short note on securities premium account.

12.

What is meant by calls in arrear?

13.

What is over-subscription?

14.

What is a share?

15.

Jeyam Tyres issued 15,000 ordinary shares of Rs.10 each payable as follows:
Rs.3 on application; Rs.5 on allotment; Rs.2 on first and final call. All money were duly received except one shareholder holding 100 shares failed to pay the call money. Pass the necessary journal entries for call (using calls in arrear account).

Visit QB365-SLMS - https://www.qb365.in/slms/

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 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 Joy Company Journal entries
Particulars		Debit Rs.	Credit Rs.
Bank A/c (9,000 × 5)	Dr.	45,000
To Equity share application A/c			45,000
(Application money received)
Equity share application A/c	Dr.	45,000
To Equity share capital A/c			45,000
(Transfer of application money to share capital A/c)
Equity share allotment A/c	Dr.	27,000
To Equity share capital A/c			27,000
(Allotment money due)
Bank A/c	Dr.	27,000
To Equity share allotment A/c			27,000
(Allotment money received)
Equity share first and final call A/c	Dr.	18,000
To Equity share capital A/c			18,000
(Call money due)
Bank A/c	Dr.	18,000
To Equity share first and final call A/c			18,000
(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

10 x 2 = 20

Under subscription Over subscription 1. In under subscription all the shares offered
may not be taken up by the public. In over subscription all the shares
offered are taken up by the public 2. The shares cannot be allotted, if the
minimum subscription is not received Here all shares are subscribed, so
there is no question of minimum
subscription 3. Under subscription does not require any
special treatment in journal entries. In over subscription additional journal
entries are required for rejection and
adjustment of application money

(i) In the case of over subscription, the shares are allotted to the public with certain number lesser than the number of shares they applied for, in certain basis.
(ii) It is called pro - rata allotment.

(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.

According to Lord Justice Lindley, A company is an association of many persons who contribute money or money's worth to - a common stock and employ it in some trade or business and who share the profit and loss arising there from. The common stock so contributed is denoted in money and is the capital of the company. The persons who contributed in it or form it, or to whom it belongs, are members. The proportion of capital to which each member is entitled is his share.

10.

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.

11.

When a company issues shares at a price more than the face value (nominal value), the shares are said to be issued at premium. The excess is called as premium amount and is transferred to securities premium account. Securities premium account is shown under reserves and surplus as a separate head in the Note to Accounts to the balance sheet.

12.

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.

13.

When the number of shares applied for is more than the number of shares offered for subscription, it is said to be over subscription.

14.

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

15.

Journal entries
Particulars		Debit Rs.	Credit Rs.
Equity share first and final call A/c (15,000 × 2)	Dr.	30,000
To Share capital A/c			30,000
(Share first and final call money due)
Bank A/c (14,900 × 2)	Dr.	29,800
Calls in arrear A/c (100 × 2)	Dr.	200
To Equity share first and final call A/c			30,000
(Amount received on calls and amount not
received transferred to calls in arrear account)