Accounting for Share Capital

State which of the following statements are true:

On April 01, 2019, a limited company was incorporated with an authorised capital of Rs. 40,000 divided into shares of Rs. 10 each. It offered to the public for subscription of 3,000 shares payable as follows:

On Application Rs. 3 per share On Allotment Rs. 2 per share On First Call (One month after allotment) Rs. 2.50 per share On Second and Final Call Rs. 2.50 per share

The shares were fully subscribed for by the public and application money duly received on April 15, 2019. The directors made the allotment on May 1, 2015. How will you record the share capital transactions in the books of a company if the amounts due have been duly received, and the company maintains the combined account for application and allotment.

Harsha Ltd., was registered with authorised capital of Rs. 25,00,000 divided into 2,50,000 Equity Shares of Rs. 10 each. Promoters of the company had undertaken to subscribe 25,000 Equity Shares of Rs. 10 each once the company was incorporated. The amount was paid by the subscribers and received by the company.

The company later issued at par 2,00,000 shares to public for subscription. It received applications for 1,80,000 Equity Shares both through ASBA and physical mode. Shares were allotted to all the applicants.

Determine the Authorised Share Capital, Issued Share Capital and Subscribed Share Capital of the Harsha Ltd.

Equity shareholders are:

Nominal share capital is:

Interest on calls in arrears is charged according to “Table F” at:

Money received in advance from shareholders before it is actually called-up by the directors is:

Shares can be forfeited:

The Profit on reissue of forfeited shares is transferred to:

Balance of share forfeiture account is shown in the balance sheet under the item:

A company issued 20,000 equity shares of Rs.10 each payable Rs.3 on application, Rs.3 on allotment, Rs.2 on first call and Rs.2 on second and the final call. The allotment money was payable on or before May 01, 2015; first call money on or before August 1st, 2015; and the second and final call on or before October 1st, 2015; ‘X’, whom 1,000 shares were allotted, did not pay the allotment and call money; ‘Y’, an allottee of 600 shares, did not pay the two calls; and ‘Z’, whom 400 shares were allotted, did not pay the final call. Pass journal entries and prepare the balance sheet of the company.

Alfa Company Ltd. issued 10,000 shares of Rs.10 each for cash payable Rs.3 on application, Rs.2 on allotment and the balance in two equal instalments. The allotment money was payable on or before March 31, 2015; the first call money on or before 30 June, 2015; and the final call money on or before August, 31. 2015. Mr. ‘A’, to whom 600 shares were allotted, paid the entire remaining face value of shares allotted to him on allotment. Record journal entries in company’s books and also exhibit the share capital in the balance sheet on the date.

A company forfeited 100 equity shares of Rs.10 each issued at a premium of 20% for non-payment of final call of Rs.5 including the premium. Show the journal entry for forfeiture of shares.

A company forfeited 800 equity shares of Rs.10 each issued at a discount of 10% for non-payment of first and final calls of Rs.2 each. Calculate the amount forfeited by the company and pass the journal entry for forfeiture of the shares.

Excel Company Limited made an issue of 1,00,000 Equity Shares of Rs.10 each, payable as follows:

On Application Rs.2.50 per share On Allotment Rs.2.50 per share On First and Final Call Rs.5.00 per share

X, the holder of 400 shares did not pay the call money and his shares were forfeited. 200 of the forfeited shares were reissued as fully paid at Rs.8 per share. Draft necessary journal entries and prepare Share Capital and Share Forfeiture accounts in the books of the company.

If a Share of Rs. 10 on which Rs. 8 is called-up and Rs. 6 is paid as forfeited. State with what amount the Share Capital account will be debited.

If a Share of Rs. 10 on which Rs. 6 has been paid is forfeited, at what minimum price it can be reissued.

Ahluwalia Ltd. issued 1,000 equity shares of Rs. 100 each as fully paid-up in consideration of the purchase of plant and machinery worth Rs. 1,00,000. What entry will be recorded in company’s journal.

Journalise the following:

(a) The directors of a company forfeited 200 equity shares of Rs.10 each on which Rs. 800 had been paid. The shares were reissued upon payment of Rs.1,500. (b) A holds 100 shares of Rs.10 each on which he has paid Re.1 per share on application. B holds 200 shares of Rs.10 each on which he has paid Re.1 on application Rs.2 on allotment. C holds 300 shares of Rs.10 each who has paid Re.1 on applications, Rs.2 on allotment and Rs.3 on first call. They all failed to pay their arrears and second call of Rs.4 per share as well. All the shares of A, B and C were forfeited and subsequently reissued at Rs.11 per share as fully Paid-up.

What is public company?