All Courses
Get the App Signup / Login
Sign in Open App
Commerce Exam  >  Commerce Tests  >  Accountancy Class 12  >  Test: Issue, Forfeiture And Reissue Of Shares - 3 - Commerce MCQ

Test: Issue, Forfeiture And Reissue Of Shares - 3 - Commerce MCQ


Test Description

30 Questions MCQ Test Accountancy Class 12 - Test: Issue, Forfeiture And Reissue Of Shares - 3

Test: Issue, Forfeiture And Reissue Of Shares - 3 for Commerce 2024 is part of Accountancy Class 12 preparation. The Test: Issue, Forfeiture And Reissue Of Shares - 3 questions and answers have been prepared according to the Commerce exam syllabus.The Test: Issue, Forfeiture And Reissue Of Shares - 3 MCQs are made for Commerce 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Issue, Forfeiture And Reissue Of Shares - 3 below.
Solutions of Test: Issue, Forfeiture And Reissue Of Shares - 3 questions in English are available as part of our Accountancy Class 12 for Commerce & Test: Issue, Forfeiture And Reissue Of Shares - 3 solutions in Hindi for Accountancy Class 12 course. Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free. Attempt Test: Issue, Forfeiture And Reissue Of Shares - 3 | 40 questions in 40 minutes | Mock test for Commerce preparation | Free important questions MCQ to study Accountancy Class 12 for Commerce Exam | Download free PDF with solutions
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 1
Save

The excess price received over the par value of shares, should be credited to __________.

Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 1
Answer:
The excess price received over the par value of shares should be credited to the Share premium account. Here is a detailed explanation:
- When a company issues shares, the par value represents the nominal value assigned to each share. It is the minimum price at which a company can issue its shares.
- However, in many cases, shares are issued at a price higher than their par value. The difference between the issue price and the par value is known as the premium.
- The premium represents the additional value investors are willing to pay for the shares of the company.
- The premium amount is not recorded in the share capital account because it is not part of the nominal value of the shares.
- Instead, it is credited to a separate account called the Share premium account.
- The Share premium account is a reserve account that represents the excess amount received from the issuance of shares above their par value.
- This account is used to record and track the additional capital raised by the company through the issuance of shares at a premium.
- The Share premium account can be utilized for various purposes such as bonus issues, writing off capital losses, or paying dividends.
- It is an important component of a company's equity and provides flexibility in managing its capital structure.
In conclusion, the excess price received over the par value of shares should be credited to the Share premium account.
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 2
Save

When shares are issued to promoters for the services offered by them, the account that will be debited with the nominal value of shares is ____________.

Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 2
Accounting Treatment for Issuing Shares to Promoters:
When shares are issued to promoters for the services offered by them, the nominal value of shares is debited to the appropriate account. In this case, the account that will be debited with the nominal value of shares is Goodwill.
Explanation:
1. Promoters: Promoters are individuals who initiate and organize a company. They play a crucial role in the formation and development of the company.
2. Services: Promoters often provide various services during the initial stages of the company, such as business planning, market research, raising capital, etc.
3. Shares Issued: As a reward for their services, shares are issued to the promoters. These shares represent their ownership in the company.
4. Nominal Value: Every share has a nominal value, which is the face value or the initial value assigned to the share. It represents the amount for which the share is issued.
5. Debiting Goodwill: When shares are issued to promoters, the nominal value of shares is debited to the Goodwill account. This is because the services provided by the promoters are considered as an intangible asset to the company, known as goodwill.
6. Goodwill Account: The Goodwill account represents the value of the company's reputation, brand, customer base, and other intangible assets. Issuing shares to promoters acknowledges their contribution towards building the company's goodwill.
Therefore, the correct answer is B: Goodwill.
1 Crore+ students have signed up on EduRev. Have you? Download the App
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 3
Save

Which of the following statements is false?

Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 3

The correct option is A.

When the shares are forfeited the premium which has already been received cannot be debited as this amount has already been paid by shareholders and cannot be debited for the purpose of receiving the amount in future.

a newly opened business cannot issue shares at discount since it has no earnings as of now. If this happens, the company might be in loss and may lose the opportunity for goodwill.

Security premium is used by many companies to redeem their preference shares in case of shortage of funds.

Hence, the option A is false because forfeited shares can be reissued at premium if the company needs funds in its reserves.

Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 4
Save

The directors of E Ltd. made the final call of Rs.30 per share on May 15, 2004 indicating the last due of payment of call money to be paid on May 31, 2004. Mr. F holding 5,000 shares paid the call money on July 15, 2004. If the company adopts Table A, the amount of interest on calls-in-arrear is? 
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 4

To calculate the amount of interest on calls-in-arrear, we need to consider the following information:
1. Call money:
- The directors of E Ltd. made a final call of Rs.30 per share on May 15, 2004.
2. Due date of payment:
- The last due date for the payment of call money was May 31, 2004.
3. Payment of call money:
- Mr. F holding 5,000 shares paid the call money on July 15, 2004.
4. Table A:
- The company adopts Table A.
Now, let's calculate the amount of interest on calls-in-arrear using the following steps:
Step 1: Calculate the number of days delayed in payment:
- May 31, 2004 to July 15, 2004 = 45 days
Step 2: Calculate the interest on call money:
- Interest on call money = Number of shares x Call money x Rate of interest x Number of days / 365
- Number of shares = 5,000
- Call money = Rs.30 per share
- Rate of interest = 10% (as per Table A)
- Number of days = 45
Step 3: Substitute the values in the formula:
- Interest on call money = 5,000 x 30 x 10 x 45 / 365 = Rs.937.50
Therefore, the amount of interest on calls-in-arrear is Rs.937.50 (Option B).
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 5
Save

Use the following information for questions 5 to 9

B Ltd. was registered with a share capital of Rs 1,00,00,000 divided into equity shares of Rs 10 each. It issued 9,00,000 equity shares to the general public at par payable as to Rs 3 on application, Rs 3 on allotment and balance in 2 equal calls. The public had subscribed for 8,50,000 shares.
Till 31st March, 2006, only first call had been made. All the shareholders had paid up except Mr. C, a holder of 25,000 shares, who did not pay the call money.

 

Q.How much is B Ltd.’s authorized share capital?
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 5
Authorized Share Capital of B Ltd.
To determine the authorized share capital of B Ltd., we need to refer to the given information:
- B Ltd. was registered with a share capital of Rs 1,00,00,000.
- The share capital is divided into equity shares of Rs 10 each.
Calculation:
Authorized share capital refers to the maximum amount of share capital a company is allowed to issue. In this case, the authorized share capital is Rs 1,00,00,000.
Therefore, the answer is:
A: Rs 1,00,00,000
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 6
Save

B Ltd. was registered with a share capital of Rs 1,00,00,000 divided into equity shares of Rs 10 each. It issued 9,00,000 equity shares to the general public at par payable as to Rs 3 on application, Rs 3 on allotment and balance in 2 equal calls. The public had subscribed for 8,50,000 shares.
Till 31st March, 2006, only first call had been made. All the shareholders had paid up except Mr. C, a holder of 25,000 shares, who did not pay the call money.

 

Q.How much is B Ltd.’s Issued Capital?
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 6

Calculation of Issued Capital:


Issued capital refers to the total value of shares that have been issued by a company to its shareholders. In this case, B Ltd. issued 9,00,000 equity shares to the general public at par.


Given information:



  • Total number of shares issued = 9,00,000

  • Face value of each share = Rs 10


Calculation:


Issued capital = Total number of shares issued x Face value


Issued capital = 9,00,000 x Rs 10


Issued capital = Rs 90,00,000


Therefore, the issued capital of B Ltd. is Rs 90,00,000.

Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 7
Save

B Ltd. was registered with a share capital of Rs 1,00,00,000 divided into equity shares of Rs 10 each. It issued 9,00,000 equity shares to the general public at par payable as to Rs 3 on application, Rs 3 on allotment and balance in 2 equal calls. The public had subscribed for 8,50,000 shares.
Till 31st March, 2006, only first call had been made. All the shareholders had paid up except Mr. C, a holder of 25,000 shares, who did not pay the call money.

 

Q.How much is B Ltd.’s Subscribed Capital?
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 7

To calculate B Ltd.'s subscribed capital, we need to consider the number of shares subscribed by the public and the amount paid by them.
Given data:
- Share capital of B Ltd.: Rs 1,00,00,000
- Face value of each share: Rs 10
- Number of shares issued to the public: 9,00,000
- Subscription by the public: 8,50,000 shares
Now, let's calculate the subscribed capital:
1. Number of shares subscribed by the public: 8,50,000 shares
2. Face value of each share: Rs 10
3. Subscribed capital = Number of shares subscribed x Face value per share
= 8,50,000 shares x Rs 10 = Rs 8,50,00,000
Therefore, B Ltd.'s subscribed capital is Rs 8,50,00,000.
Answer: C) Rs 85,00,000
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 8
Save

B Ltd. was registered with a share capital of Rs 1,00,00,000 divided into equity shares of Rs 10 each. It issued 9,00,000 equity shares to the general public at par payable as to Rs 3 on application, Rs 3 on allotment and balance in 2 equal calls. The public had subscribed for 8,50,000 shares.
Till 31st March, 2006, only first call had been made. All the shareholders had paid up except Mr. C, a holder of 25,000 shares, who did not pay the call money.

 

 Q.How much is B Ltd.’s Called Up Capital?
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 8
Calculation of Called Up Capital:
The called up capital is the portion of the share capital that the shareholders are required to pay. In this case, the shares were issued at a face value of Rs 10 each, with a total share capital of Rs 1,00,00,000.
Step 1: Calculate the total value of the shares issued
- Number of shares issued: 9,00,000
- Face value of each share: Rs 10
- Total value of shares issued: 9,00,000 x Rs 10 = Rs 90,00,000
Step 2: Calculate the total value of the shares subscribed
- Number of shares subscribed: 8,50,000
- Face value of each share: Rs 10
- Total value of shares subscribed: 8,50,000 x Rs 10 = Rs 85,00,000
Step 3: Calculate the total value of the shares unpaid
- Number of shares unpaid: 25,000
- Face value of each share: Rs 10
- Total value of shares unpaid: 25,000 x Rs 10 = Rs 2,50,000
Step 4: Calculate the called up capital
- Called up capital = Total value of shares subscribed - Total value of shares unpaid
- Called up capital = Rs 85,00,000 - Rs 2,50,000 = Rs 82,50,000
Therefore, B Ltd.'s called up capital is Rs 82,50,000.
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 9
Save

B Ltd. was registered with a share capital of Rs 1,00,00,000 divided into equity shares of Rs 10 each. It issued 9,00,000 equity shares to the general public at par payable as to Rs 3 on application, Rs 3 on allotment and balance in 2 equal calls. The public had subscribed for 8,50,000 shares.
Till 31st March, 2006, only first call had been made. All the shareholders had paid up except Mr. C, a holder of 25,000 shares, who did not pay the call money.

 

Q.How much is B Ltd.’s Paid Up Capital?
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 9

To determine the paid-up capital of B Ltd., we need to consider the shares that have been fully paid up by the shareholders.
Given information:
- Share capital of B Ltd. is Rs 1,00,00,000 divided into equity shares of Rs 10 each.
- 9,00,000 equity shares were issued to the general public at par.
- The subscription was received for 8,50,000 shares.
Now, let's calculate the amount received from the shareholders for the subscribed shares:
- Application money: 8,50,000 shares x Rs 3 = Rs 25,50,000
- Allotment money: 8,50,000 shares x Rs 3 = Rs 25,50,000
The total amount received from the shareholders for the subscribed shares is Rs 51,00,000.
Since only the first call has been made and all shareholders have paid up except Mr. C, who holds 25,000 shares, we need to calculate the amount received from the first call:
- First call money: 8,50,000 shares x Rs 3 = Rs 25,50,000
Since Mr. C did not pay the call money for his 25,000 shares, we deduct that amount:
- Amount not paid by Mr. C: 25,000 shares x Rs 3 = Rs 75,000
Now, we can calculate the total paid-up capital of B Ltd.:
- Total amount received from shareholders: Rs 51,00,000 (application and allotment money) - Rs 75,000 (amount not paid by Mr. C) = Rs 50,25,000
Therefore, B Ltd.'s paid-up capital is Rs 50,25,000.
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 10
Save

Use the following information for questions 10 to 23

D Ltd. issued 2,00,000 shares of Rs.100 each at a premium of Rs.20 per share payable as follows :

On application Rs.20

On allotment Rs.50 (including premium)

On first call Rs.30

On second and final call Rs.20

Applications were received for 3,00,000 shares and pro rata allotment was made to applicants of 2,40,000 shares. Money excess received on application was employed on account of sum due on allotment as part of share capital. E, to whom 4,000 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited and F, the holder of 6,000 shares failed to pay the two calls and his shares were forfeited after the second call. Of the forfeited shares, 8,000 shares were reissued to G at a discount of 10%, the whole of E’s forfeited shares being reissued.

 

Q.Amount received on application = ___________.
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 10
Amount received on application = Rs 60,00,000
To calculate the amount received on application, we need to consider the following information:
1. Number of shares issued: 2,00,000
2. Face value of each share: Rs.100
3. Premium per share: Rs.20
The formula to calculate the amount received on application is:
Amount received on application = Number of shares issued x Amount paid on application
Now let's calculate the amount received on application step by step:
1. Number of shares applied for: 3,00,000
2. Pro-rata allotment made: 2,40,000 (out of 3,00,000 shares)
3. Amount paid on application: Rs.20 per share
Amount received on application = Number of shares applied for x Amount paid on application
= 2,40,000 x Rs.20
= Rs. 48,00,000
However, it is mentioned that the excess money received on application was used to adjust the allotment money. Therefore, the total amount received on application is:
Amount received on application = Amount received on application (before adjustment) + Excess money used for allotment
= Rs. 48,00,000 + Rs. 12,00,000 (2,40,000 shares x Rs. 50 - 2,40,000 shares x Rs. 20)
= Rs. 60,00,000
Therefore, the amount received on application is Rs. 60,00,000.
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 11
Save

D Ltd. issued 2,00,000 shares of Rs.100 each at a premium of Rs.20 per share payable as follows :

On application Rs.20

On allotment Rs.50 (including premium)

On first call Rs.30

On second and final call Rs.20

Applications were received for 3,00,000 shares and pro rata allotment was made to applicants of 2,40,000 shares. Money excess received on application was employed on account of sum due on allotment as part of share capital. E, to whom 4,000 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited and F, the holder of 6,000 shares failed to pay the two calls and his shares were forfeited after the second call. Of the forfeited shares, 8,000 shares were reissued to G at a discount of 10%, the whole of E’s forfeited shares being reissued.

 

Q.Application money adjusted against allotment = __________. a.
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 11

Correct Answer :- B

Explanation : Total refund amount = (300000-240000) * 20 = 12,00,000

so , adjustment towards allotment (20,00,000 - 12,00,000) 

= 8,00,000.

Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 12
Save

D Ltd. issued 2,00,000 shares of Rs.100 each at a premium of Rs.20 per share payable as follows :

On application Rs.20

On allotment Rs.50 (including premium)

On first call Rs.30

On second and final call Rs.20

Applications were received for 3,00,000 shares and pro rata allotment was made to applicants of 2,40,000 shares. Money excess received on application was employed on account of sum due on allotment as part of share capital. E, to whom 4,000 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited and F, the holder of 6,000 shares failed to pay the two calls and his shares were forfeited after the second call. Of the forfeited shares, 8,000 shares were reissued to G at a discount of 10%, the whole of E’s forfeited shares being reissued.

 

Q.Amount refunded to shareholders = __________.
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 12

Correct Answer :- C

Explanation : Total refund amount = (300000-240000) * 20 

= 12,00,000

 

Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 13
Save

D Ltd. issued 2,00,000 shares of Rs.100 each at a premium of Rs.20 per share payable as follows :

On application Rs.20

On allotment Rs.50 (including premium)

On first call Rs.30

On second and final call Rs.20

Applications were received for 3,00,000 shares and pro rata allotment was made to applicants of 2,40,000 shares. Money excess received on application was employed on account of sum due on allotment as part of share capital. E, to whom 4,000 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited and F, the holder of 6,000 shares failed to pay the two calls and his shares were forfeited after the second call. Of the forfeited shares, 8,000 shares were reissued to G at a discount of 10%, the whole of E’s forfeited shares being reissued.

.

 Q.Total amount paid by E = _________.
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 13

To find the total amount paid by E, we need to calculate the amount paid on application, allotment, and first call.
Calculation:
- Total shares issued = 2,00,000
- Application money per share = Rs.20
- Allotment money per share = Rs.50 (including premium)
- First call money per share = Rs.30
1. Amount paid on application:
- Number of shares allotted to E = 4,000
- Amount paid on application = Number of shares allotted to E * Application money per share
- Amount paid on application by E = 4,000 * 20 = Rs.80,000
2. Amount paid on allotment:
- Amount paid on allotment = Allotment money per share - Application money per share
- Amount paid on allotment by E = 4,000 * (50 - 20) = Rs.1,20,000
3. Amount paid on first call:
- Amount paid on first call = First call money per share - Allotment money per share
- Amount paid on first call by E = 4,000 * (30 - 50) = -Rs.80,000 (negative amount)
Since E failed to pay the first call, his shares were forfeited. Therefore, the total amount paid by E is the sum of the amounts paid on application and allotment.
Total amount paid by E = Amount paid on application + Amount paid on allotment
Total amount paid by E = Rs.80,000 + Rs.1,20,000 = Rs.2,00,000
Hence, the total amount paid by E is Rs.2,00,000, which is not one of the given answer choices. Therefore, the correct answer cannot be determined from the information provided.
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 14
Save

D Ltd. issued 2,00,000 shares of Rs.100 each at a premium of Rs.20 per share payable as follows :

On application Rs.20

On allotment Rs.50 (including premium)

On first call Rs.30

On second and final call Rs.20

Applications were received for 3,00,000 shares and pro rata allotment was made to applicants of 2,40,000 shares. Money excess received on application was employed on account of sum due on allotment as part of share capital. E, to whom 4,000 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited and F, the holder of 6,000 shares failed to pay the two calls and his shares were forfeited after the second call. Of the forfeited shares, 8,000 shares were reissued to G at a discount of 10%, the whole of E’s forfeited shares being reissued.

 

Q.Total amount paid by F = ________.
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 14

To find out the total amount paid by F, we need to calculate the amount paid by F for the shares and the amount forfeited by F.
Given data:
- Total number of shares issued: 2,00,000
- Share price: Rs.100
- Premium per share: Rs.20
- Amount received on application: Rs.20
- Amount received on allotment (including premium): Rs.50
- Amount received on first call: Rs.30
- Amount received on second and final call: Rs.20
Calculation of shares allotted and forfeited:
- Total applications received: 3,00,000
- Pro rata allotment made: 2,40,000 shares
- Excess shares allotted: 3,00,000 - 2,40,000 = 60,000 shares
Forfeiture of shares:
- E failed to pay the allotment money for 4,000 shares.
- F failed to pay both calls for 6,000 shares.
Total shares forfeited: 4,000 + 6,000 = 10,000 shares
Reissue of forfeited shares:
- 8,000 shares were reissued to G at a discount of 10%.
- Remaining 2,000 shares were not reissued.
Calculation of amount paid by F:
- Amount paid on application for allotted shares: 6,000 shares * Rs.20 = Rs.1,20,000
- Amount paid on allotment for allotted shares (including premium): 6,000 shares * Rs.50 = Rs.3,00,000
- Amount paid on first call for allotted shares: 6,000 shares * Rs.30 = Rs.1,80,000
- Amount paid on second call for allotted shares: 6,000 shares * Rs.20 = Rs.1,20,000
- Total amount paid by F: Rs.1,20,000 + Rs.3,00,000 + Rs.1,80,000 + Rs.1,20,000 = Rs.7,20,000
Calculation of amount forfeited by F:
- Amount forfeited on first call for forfeited shares: 6,000 shares * Rs.30 = Rs.1,80,000
- Amount forfeited on second call for forfeited shares: 6,000 shares * Rs.20 = Rs.1,20,000
- Total amount forfeited by F: Rs.1,80,000 + Rs.1,20,000 = Rs.3,00,000
Total amount paid by F = Amount paid - Amount forfeited = Rs.7,20,000 - Rs.3,00,000 = Rs.4,20,000
Therefore, the total amount paid by F is Rs.4,20,000.
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 15
Save

D Ltd. issued 2,00,000 shares of Rs.100 each at a premium of Rs.20 per share payable as follows :

On application Rs.20

On allotment Rs.50 (including premium)

On first call Rs.30

On second and final call Rs.20

Applications were received for 3,00,000 shares and pro rata allotment was made to applicants of 2,40,000 shares. Money excess received on application was employed on account of sum due on allotment as part of share capital. E, to whom 4,000 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited and F, the holder of 6,000 shares failed to pay the two calls and his shares were forfeited after the second call. Of the forfeited shares, 8,000 shares were reissued to G at a discount of 10%, the whole of E’s forfeited shares being reissued.

 

Q.Total amount paid by G = __________.
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 15

To find the total amount paid by G, we need to calculate the amount paid at each stage of the share issuance and forfeiture process. Here's the step-by-step calculation:
1. Shares issued:
- Total shares issued = 2,00,000 shares
- Face value of each share = Rs.100
- Premium per share = Rs.20
2. Application stage:
- Applications received = 3,00,000 shares
- Pro rata allotment made = 2,40,000 shares
- Excess application money received = 60,000 shares (3,00,000 - 2,40,000)
- Value of excess application money received = 60,000 shares * Rs.20 = Rs.12,00,000
3. Allotment stage:
- Allotment money per share = Rs.50 (including premium)
- Shares allotted to E = 4,000 shares
- Shares allotted to F = 6,000 shares
4. Forfeiture stage:
- E failed to pay allotment money of Rs.50 per share (4,000 shares)
- F failed to pay two calls of Rs.30 and Rs.20 per share (6,000 shares)
- Total forfeited shares = 10,000 shares
5. Reissue of forfeited shares:
- Forfeited shares reissued to G = 8,000 shares
- Discount on reissue = 10% of face value = 10% of Rs.100 = Rs.10 per share
- Reissue price per share = Face value - Discount = Rs.100 - Rs.10 = Rs.90
Now, let's calculate the total amount paid by G:
- Amount paid at application stage = Rs.0 (G did not apply)
- Amount paid at allotment stage = Rs.0 (G did not receive any allotment)
- Amount paid at first call = Rs.0 (G did not receive any allotment)
- Amount paid at second and final call = Rs.0 (G did not receive any allotment)
- Amount paid for reissued forfeited shares = 8,000 shares * Rs.90 = Rs.7,20,000
Therefore, the total amount paid by G is Rs.7,20,000. Hence, the correct answer is option A.
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 16
Save

D Ltd. issued 2,00,000 shares of Rs.100 each at a premium of Rs.20 per share payable as follows :

On application Rs.20

On allotment Rs.50 (including premium)

On first call Rs.30

On second and final call Rs.20

Applications were received for 3,00,000 shares and pro rata allotment was made to applicants of 2,40,000 shares. Money excess received on application was employed on account of sum due on allotment as part of share capital. E, to whom 4,000 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited and F, the holder of 6,000 shares failed to pay the two calls and his shares were forfeited after the second call. Of the forfeited shares, 8,000 shares were reissued to G at a discount of 10%, the whole of E’s forfeited shares being reissued.

 

Q.Amount transferred to Share forfeiture account at the time of forfeiting E’s shares = _________.
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 16
Calculation of Amount transferred to Share forfeiture account:
To calculate the amount transferred to the Share forfeiture account, we need to consider the following steps:
1. Calculation of Share Capital:
- Total number of shares issued = 2,00,000 shares
- Face value of each share = Rs.100
- Total share capital = Total number of shares issued * Face value per share = 2,00,000 * Rs.100 = Rs.2,00,00,000
2. Calculation of Premium on Shares:
- Premium per share = Rs.20
- Total premium on shares = Premium per share * Total number of shares issued = Rs.20 * 2,00,000 = Rs.40,00,000
3. Calculation of Application Money:
- Application money per share = Rs.20
- Total application money received = Application money per share * Total number of shares issued = Rs.20 * 2,00,000 = Rs.40,00,000
4. Calculation of Allotment Money:
- Allotment money per share = Rs.50 (including premium)
- Total allotment money received = Allotment money per share * Total number of shares allotted = Rs.50 * 2,40,000 = Rs.1,20,00,000
5. Calculation of Forfeited Shares:
- Shares forfeited of E = 4,000 shares
- Shares forfeited of F = 6,000 shares
- Total forfeited shares = Shares forfeited of E + Shares forfeited of F = 4,000 + 6,000 = 10,000 shares
6. Calculation of Amount Transferred to Share Forfeiture Account:
- Amount transferred to Share forfeiture account = (Forfeited shares * Face value per share) + (Forfeited shares * Premium per share)
- Amount transferred to Share forfeiture account = (10,000 * Rs.100) + (10,000 * Rs.20) = Rs.10,00,000 + Rs.2,00,000 = Rs.12,00,000
Therefore, the amount transferred to the Share forfeiture account at the time of forfeiting E's shares is Rs. 12,00,000.
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 17
Save

D Ltd. issued 2,00,000 shares of Rs.100 each at a premium of Rs.20 per share payable as follows :

On application Rs.20

On allotment Rs.50 (including premium)

On first call Rs.30

On second and final call Rs.20

Applications were received for 3,00,000 shares and pro rata allotment was made to applicants of 2,40,000 shares. Money excess received on application was employed on account of sum due on allotment as part of share capital. E, to whom 4,000 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited and F, the holder of 6,000 shares failed to pay the two calls and his shares were forfeited after the second call. Of the forfeited shares, 8,000 shares were reissued to G at a discount of 10%, the whole of E’s forfeited shares being reissued.

 

Q.Amount transferred to Share forfeiture account at the time of forfeiting F’s shares = _________.
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 17
Amount transferred to Share forfeiture account at the time of forfeiting F's shares = Rs 3,00,000.
Explanation:
To calculate the amount transferred to the Share forfeiture account, we need to consider the following steps:
1. Calculation of excess money received on application:
- Number of shares applied for = 3,00,000
- Number of shares allotted = 2,40,000
- Excess shares applied for = 3,00,000 - 2,40,000 = 60,000
- Excess money received on application = Excess shares applied for * Application money per share
= 60,000 * Rs 20 = Rs 12,00,000
2. Utilization of excess money received on application:
- The excess money received on application is used to adjust the sum due on allotment.
- The sum due on allotment per share is Rs 50 (including premium).
- Total sum due on allotment = Number of shares allotted * Sum due on allotment per share
= 2,40,000 * Rs 50 = Rs 1,20,00,000
- Excess money utilized = Minimum of (Excess money received on application, Total sum due on allotment)
= Minimum of (Rs 12,00,000, Rs 1,20,00,000) = Rs 12,00,000
3. Calculation of forfeiture amount:
- F failed to pay the two calls, which amounts to Rs 30 (first call) + Rs 20 (second call) = Rs 50 per share.
- Number of shares forfeited = F's shares = 6,000
- Forfeiture amount = Number of shares forfeited * Forfeiture amount per share
= 6,000 * Rs 50 = Rs 3,00,000
4. Calculation of reissued shares at a discount:
- E's shares were forfeited and reissued to G at a discount of 10%.
- Number of shares forfeited and reissued = E's shares = 4,000
- Discount on reissued shares = Discount rate * Face value per share
= 10% * Rs 100 = Rs 10 per share
- Reissued price per share = Face value per share - Discount on reissued shares
= Rs 100 - Rs 10 = Rs 90 per share
- Amount received from G for reissued shares = Number of reissued shares * Reissued price per share
= 4,000 * Rs 90 = Rs 3,60,000
5. Calculation of amount transferred to the Share forfeiture account:
- Amount transferred to the Share forfeiture account = Excess money utilized + Forfeiture amount
= Rs 12,00,000 + Rs 3,00,000 = Rs 15,00,000
Therefore, the amount transferred to the Share forfeiture account at the time of forfeiting F's shares is Rs 3,00,000.
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 18
Save

D Ltd. issued 2,00,000 shares of Rs.100 each at a premium of Rs.20 per share payable as follows :

On application Rs.20

On allotment Rs.50 (including premium)

On first call Rs.30

On second and final call Rs.20

Applications were received for 3,00,000 shares and pro rata allotment was made to applicants of 2,40,000 shares. Money excess received on application was employed on account of sum due on allotment as part of share capital. E, to whom 4,000 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited and F, the holder of 6,000 shares failed to pay the two calls and his shares were forfeited after the second call. Of the forfeited shares, 8,000 shares were reissued to G at a discount of 10%, the whole of E’s forfeited shares being reissued.

 

Q.Net balance in Share Capital Account = ________.
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 18

The given question involves the issuance and forfeiture of shares, along with reissue at a discount. Let's break down the information and calculate the net balance in the Share Capital Account.
1. Shares Issued:
- Number of shares issued = 2,00,000
- Face value per share = Rs. 100
- Premium per share = Rs. 20
2. Amount received on application:
- Total application money received = 2,00,000 shares * Rs. 20 = Rs. 40,00,000
3. Amount received on allotment:
- Allotment money received = 2,40,000 shares * Rs. 50 = Rs. 1,20,00,000
4. Calls on Shares:
- First call amount = Rs. 30 per share
- Second and final call amount = Rs. 20 per share
5. Forfeiture of Shares:
- E failed to pay allotment money and first call, resulting in forfeiture of 4,000 shares.
- F failed to pay both the calls, resulting in forfeiture of 6,000 shares.
- Total forfeited shares = 4,000 + 6,000 = 10,000 shares
6. Reissue of Forfeited Shares:
- Out of the forfeited shares, 8,000 shares were reissued to G at a discount of 10%, which means G paid only 90% of the face value and premium.
Now, let's calculate the net balance in the Share Capital Account:
- Share Capital from Issuance:
- Face value of issued shares = 2,00,000 shares * Rs. 100 = Rs. 2,00,00,000
- Premium received = 2,00,000 shares * Rs. 20 = Rs. 40,00,000
- Share Capital from Allotment:
- Allotment money received = Rs. 1,20,00,000
- Share Capital from Calls:
- First call amount received = 2,40,000 shares * Rs. 30 = Rs. 72,00,000
- Second call amount received = 2,40,000 shares * Rs. 20 = Rs. 48,00,000
- Forfeited Shares:
- Total forfeited shares = 10,000 shares
- Face value of forfeited shares = 10,000 shares * Rs. 100 = Rs. 10,00,000
- Premium on forfeited shares = 10,000 shares * Rs. 20 = Rs. 2,00,000
- Reissue of Forfeited Shares:
- Reissued shares to G = 8,000 shares
- Reissue price per share = 90% of face value + premium = 90% of (Rs. 100 + Rs. 20) = Rs. 108
- Reissue amount received = 8,000 shares * Rs. 108 = Rs. 8,64,000
Now, let's calculate the net balance in the Share Capital Account:
- Total Share Capital = Share Capital from Issuance + Share Capital from Allotment + Share Capital from Calls
= Rs.
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 19
Save

D Ltd. issued 2,00,000 shares of Rs.100 each at a premium of Rs.20 per share payable as follows :

On application Rs.20

On allotment Rs.50 (including premium)

On first call Rs.30

On second and final call Rs.20

Applications were received for 3,00,000 shares and pro rata allotment was made to applicants of 2,40,000 shares. Money excess received on application was employed on account of sum due on allotment as part of share capital. E, to whom 4,000 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited and F, the holder of 6,000 shares failed to pay the two calls and his shares were forfeited after the second call. Of the forfeited shares, 8,000 shares were reissued to G at a discount of 10%, the whole of E’s forfeited shares being reissued.

 

Q.Net balance in Securities Premium Account = ________.
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 19

To find the net balance in the Securities Premium Account, we need to calculate the total premium received on the issuance of shares and adjust for forfeitures and reissuance.
1. Total premium received on issuance of shares:
- Number of shares issued at a premium = 2,00,000
- Premium per share = Rs. 20
- Total premium received = 2,00,000 * Rs. 20 = Rs. 40,00,000
2. Adjustments for forfeitures:
- E failed to pay the allotment money and the first call, resulting in the forfeiture of his 4,000 shares.
- F failed to pay the two calls, resulting in the forfeiture of his 6,000 shares.
- Total forfeited shares = 4,000 + 6,000 = 10,000 shares
3. Reissuance of forfeited shares:
- 8,000 forfeited shares were reissued to G at a discount of 10%.
- Reissued shares = 8,000
- Discount per share = 10% of Rs. 100 = Rs. 10
- Reissued price per share = Rs. 100 - Rs. 10 = Rs. 90
- Reissued amount = 8,000 * Rs. 90 = Rs. 7,20,000
4. Calculation of net balance in the Securities Premium Account:
- Total premium received on issuance = Rs. 40,00,000
- Adjustments for forfeitures = Rs. 0 (since E's shares were reissued)
- Reissued amount = Rs. 7,20,000
- Net balance in the Securities Premium Account = Total premium received - Adjustments for forfeitures + Reissued amount
- Net balance = Rs. 40,00,000 - Rs. 0 + Rs. 7,20,000 = Rs. 39,20,000
Therefore, the correct answer is option A: Rs. 39,20,000.
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 20
Save

D Ltd. issued 2,00,000 shares of Rs.100 each at a premium of Rs.20 per share payable as follows :

On application Rs.20

On allotment Rs.50 (including premium)

On first call Rs.30

On second and final call Rs.20

Applications were received for 3,00,000 shares and pro rata allotment was made to applicants of 2,40,000 shares. Money excess received on application was employed on account of sum due on allotment as part of share capital. E, to whom 4,000 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited and F, the holder of 6,000 shares failed to pay the two calls and his shares were forfeited after the second call. Of the forfeited shares, 8,000 shares were reissued to G at a discount of 10%, the whole of E’s forfeited shares being reissued.

 

Q.Net balance in Share Forfeiture Account = ________.
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 20
Calculation of Net balance in Share Forfeiture Account:

  • Total number of shares issued = 2,00,000 shares

  • Application received for = 3,00,000 shares

  • Pro rata allotment made = 2,40,000 shares

  • Excess application money received = 3,00,000 - 2,40,000 = 60,000 shares

  • Money received on excess application utilized for allotment = 60,000 shares

  • Shares allotted to E = 4,000 shares

  • Allotment money not paid by E = 4,000 x Rs.50 = Rs.2,00,000

  • Shares forfeited of E = 4,000 shares

  • Shares allotted to F = 6,000 shares

  • Total calls made on F = Rs.30 + Rs.20 = Rs.50

  • Call money not paid by F = 6,000 x Rs.50 = Rs.3,00,000

  • Shares forfeited of F = 6,000 shares

  • Shares reissued to G = 8,000 shares

  • Discount on reissue = 10% of Rs.100 = Rs.10

  • Net balance in Share Forfeiture Account = Forfeited amount - Reissued amount


Calculations:
For E:
- Allotment money not paid = Rs.2,00,000
- Shares forfeited = 4,000 shares
- Forfeited amount = 4,000 x Rs.100 = Rs.4,00,000
For F:
- Call money not paid = Rs.3,00,000
- Shares forfeited = 6,000 shares
- Forfeited amount = 6,000 x Rs.100 = Rs.6,00,000
For G:
- Shares reissued = 8,000 shares
- Discount on reissue = 10% of Rs.100 = Rs.10
- Reissued amount = 8,000 x (Rs.100 - Rs.10) = Rs.8,00,000
Net balance in Share Forfeiture Account = (Forfeited amount - Reissued amount) = (Rs.4,00,000 + Rs.6,00,000) - Rs.8,00,000 = Rs.2,00,000
Therefore, the correct answer is A: Rs 1,00,000.
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 21
Save

D Ltd. issued 2,00,000 shares of Rs.100 each at a premium of Rs.20 per share payable as follows :

On application Rs.20

On allotment Rs.50 (including premium)

On first call Rs.30

On second and final call Rs.20

Applications were received for 3,00,000 shares and pro rata allotment was made to applicants of 2,40,000 shares. Money excess received on application was employed on account of sum due on allotment as part of share capital. E, to whom 4,000 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited and F, the holder of 6,000 shares failed to pay the two calls and his shares were forfeited after the second call. Of the forfeited shares, 8,000 shares were reissued to G at a discount of 10%, the whole of E’s forfeited shares being reissued.

.

 

Q.Net balance in Capital Reserve Account = ________.
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 21

To find the net balance in the Capital Reserve Account, we need to calculate the various transactions related to the issuance, forfeiture, and reissue of shares. Let's break down the given information and calculate step by step:
1. Issue of shares:
- Number of shares issued: 2,00,000
- Face value per share: Rs.100
- Premium per share: Rs.20
- Total amount received on issue = (2,00,000 shares * Rs.100 face value) + (2,00,000 shares * Rs.20 premium) = Rs.2,00,00,000 + Rs.40,00,000 = Rs.2,40,00,000
2. Applications and allotment:
- Applications received: 3,00,000 shares
- Pro rata allotment made to applicants: 2,40,000 shares
- Excess money received on application: (3,00,000 shares - 2,40,000 shares) * Rs.20 per share = Rs.12,00,000
- Allotment money received: 2,40,000 shares * (Rs.50 allotment + Rs.20 premium) = Rs.1,80,00,000
3. Forfeiture of shares:
- E failed to pay allotment money for 4,000 shares.
- F failed to pay two calls for 6,000 shares.
- Total forfeited shares = 4,000 shares + 6,000 shares = 10,000 shares
4. Reissue of forfeited shares:
- E's forfeited shares of 4,000 were reissued to G at a discount of 10%.
- Reissued shares = 4,000 shares - (4,000 shares * 10% discount) = 4,000 shares - 400 shares = 3,600 shares
5. Calculation of Capital Reserve:
- Excess money received on application used for allotment = Rs.12,00,000
- Allotment money received = Rs.1,80,00,000
- Total forfeited shares = 10,000 shares
Net Balance in Capital Reserve Account = Excess money received on application + Allotment money received - (Forfeited shares * (Face value + Premium))
= Rs.12,00,000 + Rs.1,80,00,000 - (10,000 shares * (Rs.100 + Rs.20))
= Rs.12,00,000 + Rs.1,80,00,000 - Rs.12,00,000
= Rs.1,80,00,000
Therefore, the net balance in the Capital Reserve Account is Rs.2,16,00,000.
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 22
Save

D Ltd. issued 2,00,000 shares of Rs.100 each at a premium of Rs.20 per share payable as follows :

On application Rs.20

On allotment Rs.50 (including premium)

On first call Rs.30

On second and final call Rs.20

Applications were received for 3,00,000 shares and pro rata allotment was made to applicants of 2,40,000 shares. Money excess received on application was employed on account of sum due on allotment as part of share capital. E, to whom 4,000 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited and F, the holder of 6,000 shares failed to pay the two calls and his shares were forfeited after the second call. Of the forfeited shares, 8,000 shares were reissued to G at a discount of 10%, the whole of E’s forfeited shares being reissued.

 

Q.Net balance in Bank Account = ________.
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 22
Calculation of Net balance in Bank Account:


1. Calculation of Share Capital:



  • Total number of shares issued = 2,00,000 shares

  • Face value of each share = Rs.100

  • Premium on each share = Rs.20

  • Total amount received on issue of shares = (2,00,000 * (100 + 20)) = Rs. 2,40,00,000


2. Calculation of Allotment Money:



  • Amount received on application = 2,40,000 shares * Rs.20 = Rs. 4,80,000

  • Allotment money per share = Rs.50 (including premium)

  • Total allotment money = 2,40,000 shares * Rs.50 = Rs. 1,20,00,000


3. Calculation of Calls Money:



  • First call money per share = Rs.30

  • Total first call money = 2,40,000 shares * Rs.30 = Rs. 72,00,000

  • Second and final call money per share = Rs.20

  • Total second and final call money = 2,40,000 shares * Rs.20 = Rs. 48,00,000


4. Calculation of Forfeiture:



  • Shares forfeited from E = 4,000 shares

  • Shares forfeited from F = 6,000 shares

  • Total forfeited shares = 4,000 + 6,000 = 10,000 shares


5. Calculation of Reissued Shares:



  • Reissued shares to G at a discount of 10% = 8,000 shares

  • Value of each reissued share = Rs.100 - (10% of Rs.100) = Rs. 90

  • Total value of reissued shares = 8,000 shares * Rs.90 = Rs. 7,20,000


6. Calculation of Net Balance in Bank Account:



  • Net balance in Bank Account = Total amount received on issue of shares + Amount received on application - Allotment money - First call money - Second and final call money + Reissued shares money

  • Net balance in Bank Account = Rs. 2,40,00,000 + Rs. 4,80,000 - Rs. 1,20,00,000 - Rs. 72,00,000 - Rs. 48,00,000 + Rs. 7,20,000

  • Net balance in Bank Account = Rs. 2,40,36,000


Therefore
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 23
Save

D Ltd. issued 2,00,000 shares of Rs.100 each at a premium of Rs.20 per share payable as follows :

On application Rs.20

On allotment Rs.50 (including premium)

On first call Rs.30

On second and final call Rs.20

Applications were received for 3,00,000 shares and pro rata allotment was made to applicants of 2,40,000 shares. Money excess received on application was employed on account of sum due on allotment as part of share capital. E, to whom 4,000 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited and F, the holder of 6,000 shares failed to pay the two calls and his shares were forfeited after the second call. Of the forfeited shares, 8,000 shares were reissued to G at a discount of 10%, the whole of E’s forfeited shares being reissued.

 

Q.Balance Sheet Total = _________.
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 23
Calculation of Balance Sheet Total:
1. Calculation of Share Capital:
- Number of shares issued = 2,00,000
- Face value per share = Rs.100
- Premium per share = Rs.20
Total Share Capital = Number of shares issued x Face value per share
Total Share Capital = 2,00,000 x Rs.100
Total Share Capital = Rs.2,00,00,000
2. Calculation of Amount Received on Application:
- Amount received on application per share = Rs.20
- Number of shares applied for = 3,00,000
- Number of shares allotted = 2,40,000
Amount received on application = Amount received on application per share x Number of shares allotted
Amount received on application = Rs.20 x 2,40,000
Amount received on application = Rs.4,80,00,000
3. Calculation of Amount Received on Allotment:
- Amount received on allotment per share = Rs.50
- Number of shares allotted = 2,40,000
Amount received on allotment = Amount received on allotment per share x Number of shares allotted
Amount received on allotment = Rs.50 x 2,40,000
Amount received on allotment = Rs.1,20,00,000
4. Calculation of First Call Amount:
- First call amount per share = Rs.30
- Number of shares allotted = 2,40,000
First call amount = First call amount per share x Number of shares allotted
First call amount = Rs.30 x 2,40,000
First call amount = Rs.72,00,000
5. Calculation of Second Call Amount:
- Second call amount per share = Rs.20
- Number of shares allotted = 2,40,000
Second call amount = Second call amount per share x Number of shares allotted
Second call amount = Rs.20 x 2,40,000
Second call amount = Rs.48,00,000
6. Calculation of Forfeited Shares:
- Number of shares allotted to E = 4,000
- Number of shares allotted to F = 6,000
Forfeited shares = Shares allotted to E + Shares allotted to F
Forfeited shares = 4,000 + 6,000
Forfeited shares = 10,000
7. Calculation of Reissued Shares:
- Number of forfeited shares reissued to G = 8,000
- Discount on reissued shares = 10%
Reissued shares = Forfeited shares - Shares reissued to G
Reissued shares = 10,000 - 8,000
Reissued shares = 2,000
8. Calculation of Balance Sheet Total:
Balance Sheet Total = Share Capital + Amount Received on Application + Amount Received on Allotment + First Call Amount + Second Call Amount - Forfeited Shares + Reissued Shares
Balance Sheet Total = Rs.2,00,00,000 + Rs.4,80,00,000 + Rs.1,20,00,000 + Rs.72,00,000 + Rs.48,00,000 - Rs
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 24
Save

When shares are forfeited, the share capital account is debited with ________ and the share forfeiture account is credited with __________.
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 24
Explanation:
When shares are forfeited, there are certain accounting entries that need to be made. The share capital account is debited and the share forfeiture account is credited. Let's break down the answer choices to see which is correct:
A: Paid-up capital of shares forfeited; Called up capital of shares forfeited
- This is not correct because the share capital account should be debited, not the paid-up capital account.
B: Called up capital of shares forfeited; Calls in arrear of shares forfeited
- This is not correct because the share forfeiture account should be credited, not the calls in arrear account.
C: Called up capital of shares forfeited; Amount received on shares forfeited
- This is the correct answer because the share capital account is debited (called up capital) and the share forfeiture account is credited (amount received on shares forfeited).
D: Calls in arrears of shares forfeited; Amount received on shares forfeited
- This is not correct because the share capital account should be debited, not the calls in arrears account.
Therefore, the correct answer is C: Called up capital of shares forfeited; Amount received on shares forfeited.
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 25
Save

Use the following information for the questions 25 to 29

B Ltd. issued 80,000 equity shares of Rs.10 each, payable as under:

On application     Rs.3

On allotmen     Rs.4

On first call     Rs.2

On final call     Rs.1

The applications received for 1,20,000 shares were dealt with as under:

  •  Applicants of 20,000 shares were allotted in full.
  •  Applicants of 80,000 shares were allotted 60,000 shares pro-rata.
  •  Applications for 20,000 shares were rejected

 

Q.Amount received on application is _____________.
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 25
Amount received on application is Rs 3,60,000.
The amount received on application can be calculated by multiplying the number of shares allotted to each category by the respective application money.
Given:
- Total number of shares applied for = 1,20,000
- Number of shares allotted in full = 20,000
- Number of shares allotted pro-rata = 60,000
Amount received from shares allotted in full:
- Application money per share = Rs 3
- Number of shares allotted in full = 20,000
Amount received = Application money per share * Number of shares allotted in full
= Rs 3 * 20,000
= Rs 60,000
Amount received from shares allotted pro-rata:
- Application money per share = Rs 3
- Number of shares allotted pro-rata = 60,000
- Total number of shares applied for = 1,20,000
Pro-rata ratio = Number of shares allotted pro-rata / Total number of shares applied for
= 60,000 / 1,20,000
= 1/2
Amount received = Application money per share * Number of shares allotted pro-rata * Pro-rata ratio
= Rs 3 * 60,000 * (1/2)
= Rs 90,000
Total amount received on application = Amount received from shares allotted in full + Amount received from shares allotted pro-rata
= Rs 60,000 + Rs 90,000
= Rs 1,50,000
Therefore, the amount received on application is Rs 3,60,000.
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 26
Save

Use the following information for the questions 25 to 29

B Ltd. issued 80,000 equity shares of Rs.10 each, payable as under:

On application     Rs.3

On allotmen     Rs.4

On first call     Rs.2

On final call     Rs.1

The applications received for 1,20,000 shares were dealt with as under:

  •  Applicants of 20,000 shares were allotted in full.
  •  Applicants of 80,000 shares were allotted 60,000 shares pro-rata.
  •  Applications for 20,000 shares were rejected

 

Q.Total excess money received as compared to the number of shares allotted = ?
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 26
Total excess money received as compared to the number of shares allotted:
To calculate the total excess money received, we need to determine the amount of money received from the applicants and compare it with the amount of money required for the allotted shares.
1. Amount received from applicants:
- Applicants of 20,000 shares were allotted in full, so the amount received from them is 20,000 shares x Rs.3 (application amount) = Rs.60,000.
- Applicants of 80,000 shares were allotted 60,000 shares pro-rata, so the amount received from them is 60,000 shares x Rs.3 (application amount) = Rs.1,80,000.
2. Amount required for allotted shares:
- Applicants of 20,000 shares were allotted in full, so the amount required for them is 20,000 shares x Rs.10 (face value) = Rs.2,00,000.
- Applicants of 80,000 shares were allotted 60,000 shares pro-rata, so the amount required for them is 60,000 shares x Rs.10 (face value) = Rs.6,00,000.
3. Excess money received:
- For the applicants allotted in full, there is no excess money received.
- For the applicants allotted pro-rata, the excess money received is the difference between the amount received and the amount required. So, the excess money received is Rs.1,80,000 - Rs.6,00,000 = Rs. (-4,20,000).
Therefore, the total excess money received as compared to the number of shares allotted is Rs. (-4,20,000).
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 27
Save

Use the following information for the questions 25 to 29

B Ltd. issued 80,000 equity shares of Rs.10 each, payable as under:

On application     Rs.3

On allotmen     Rs.4

On first call     Rs.2

On final call     Rs.1

The applications received for 1,20,000 shares were dealt with as under:

  •  Applicants of 20,000 shares were allotted in full.
  •  Applicants of 80,000 shares were allotted 60,000 shares pro-rata.
  •  Applications for 20,000 shares were rejected

 

Q.Amount to be refunded = ?
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 27
Amount to be refunded = ?
To determine the amount to be refunded, we need to calculate the excess amount received from the applicants who were allotted the shares pro-rata.
Given information:
- Total shares issued: 80,000
- Share price: Rs.10
- Amount received on application: Rs.3
- Amount received on allotment: Rs.4
- Amount received on first call: Rs.2
- Amount received on final call: Rs.1
Applications received for 1,20,000 shares:
- Applicants of 20,000 shares were allotted in full.
- Applicants of 80,000 shares were allotted 60,000 shares pro-rata.
- Applications for 20,000 shares were rejected.
Step 1: Calculate the total amount received from the applicants who were allotted shares pro-rata.
- Total shares allotted pro-rata: 60,000
- Amount received on application for these shares: 60,000 * Rs.3 = Rs.1,80,000
Step 2: Determine the excess amount received from the applicants who were allotted shares pro-rata.
- Total amount received from the applicants who were allotted shares pro-rata: Rs.1,80,000
- Total amount that should have been received for these shares: 60,000 * Rs.10 = Rs.6,00,000
- Excess amount received: Rs.6,00,000 - Rs.1,80,000 = Rs.4,20,000
Step 3: Calculate the amount to be refunded.
- Amount to be refunded = Excess amount received - Amount received on allotment
- Amount to be refunded = Rs.4,20,000 - (60,000 * Rs.4) = Rs.4,20,000 - Rs.2,40,000 = Rs.1,80,000
Therefore, the amount to be refunded is Rs.1,80,000.
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 28
Save

Use the following information for the questions 25 to 29

B Ltd. issued 80,000 equity shares of Rs.10 each, payable as under:

On application     Rs.3

On allotmen     Rs.4

On first call     Rs.2

On final call     Rs.1

The applications received for 1,20,000 shares were dealt with as under:

  •  Applicants of 20,000 shares were allotted in full.
  •  Applicants of 80,000 shares were allotted 60,000 shares pro-rata.
  •  Applications for 20,000 shares were rejected

 

Q.Amount of excess application money available for adjustment against allotment money = ?
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 28
Amount of excess application money available for adjustment against allotment money:
The excess application money available for adjustment against allotment money can be calculated by following these steps:
Step 1: Calculate the total application money received:
- 20,000 shares were allotted in full, so the application money received for these shares is (20,000 shares * Rs.3) = Rs.60,000.
- 60,000 shares were allotted pro-rata, so the application money received for these shares is (60,000 shares * Rs.3) = Rs.1,80,000.
- The total application money received is Rs.60,000 + Rs.1,80,000 = Rs.2,40,000.
Step 2: Calculate the total allotment money required:
- The total allotment money required for the allotted shares is (20,000 shares * Rs.4) = Rs.80,000.
- The total allotment money required for the pro-rata allotted shares is (60,000 shares * Rs.4) = Rs.2,40,000.
- The total allotment money required is Rs.80,000 + Rs.2,40,000 = Rs.3,20,000.
Step 3: Calculate the excess application money:
- The excess application money is the difference between the total application money received and the total allotment money required.
- Excess application money = Rs.2,40,000 - Rs.3,20,000 = -Rs.80,000.
Since the excess application money is negative (-Rs.80,000), it means there is no excess application money available for adjustment against allotment money.
Therefore, the correct answer is Option A: Nil.
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 29
Save

Use the following information for the questions 25 to 29

B Ltd. issued 80,000 equity shares of Rs.10 each, payable as under:

On application     Rs.3

On allotmen     Rs.4

On first call     Rs.2

On final call     Rs.1

The applications received for 1,20,000 shares were dealt with as under:

  •  Applicants of 20,000 shares were allotted in full.
  •  Applicants of 80,000 shares were allotted 60,000 shares pro-rata.
  •  Applications for 20,000 shares were rejected

 

Q.Amount of excess application money available for adjustment against call money = ?
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 29
Amount of excess application money available for adjustment against call money = ?
To calculate the amount of excess application money available for adjustment against call money, we need to follow these steps:
1. Determine the total number of shares applied for:
- Applicants of 20,000 shares were allotted in full.
- Applicants of 80,000 shares were allotted 60,000 shares pro-rata.
- Applications for 20,000 shares were rejected.
- Total shares applied for = 20,000 + 60,000 + 0 = 80,000 shares.
2. Calculate the total amount received from the applicants:
- On application: Rs.3 per share.
- Total amount received on application = 80,000 shares × Rs.3 per share = Rs.2,40,000.
3. Calculate the total amount to be adjusted against allotment:
- On allotment: Rs.4 per share.
- Total amount to be adjusted against allotment = 80,000 shares × Rs.4 per share = Rs.3,20,000.
4. Calculate the total amount available for adjustment against call money:
- Total amount available for adjustment = Total amount received on application - Total amount to be adjusted against allotment.
- Total amount available for adjustment = Rs.2,40,000 - Rs.3,20,000 = - Rs.80,000.
Based on the calculations, the amount of excess application money available for adjustment against call money is Nil (Option A).
Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 30
Save

Which type of the following shares have the right to receive dividends unpaid in prior years, whenever earnings become adequate?
Detailed Solution for Test: Issue, Forfeiture And Reissue Of Shares - 3 - Question 30
Question: Which type of the following shares have the right to receive dividends unpaid in prior years, whenever earnings become adequate?
Answer: Cumulative preference shares
Explanation:

  • Cumulative preference shares: This type of shares have the right to receive dividends unpaid in prior years, whenever earnings become adequate.

  • Participating preference shares:

  • Convertible preference shares:

  • Callable preference shares:

View more questions
41 videos|168 docs|43 tests
Join Course
Information about Test: Issue, Forfeiture And Reissue Of Shares - 3 Page
In this test you can find the Exam questions for Test: Issue, Forfeiture And Reissue Of Shares - 3 solved & explained in the simplest way possible. Besides giving Questions and answers for Test: Issue, Forfeiture And Reissue Of Shares - 3, EduRev gives you an ample number of Online tests for practice

Top Courses for Commerce

41 videos|168 docs|43 tests
Join Course
Download as PDF

Top Courses for Commerce

Important Questions for Issue, Forfeiture And Reissue Of Shares - 3

Find all the important questions for Issue, Forfeiture And Reissue Of Shares - 3 at EduRev.Get fully prepared for Issue, Forfeiture And Reissue Of Shares - 3 with EduRev's comprehensive question bank and test resources. Our platform offers a diverse range of question papers covering various topics within the Issue, Forfeiture And Reissue Of Shares - 3 syllabus. Whether you need to review specific subjects or assess your overall readiness, EduRev has you covered. The questions are designed to challenge you and help you gain confidence in tackling the actual exam. Maximize your chances of success by utilizing EduRev's extensive collection of Issue, Forfeiture And Reissue Of Shares - 3 resources.

Issue, Forfeiture And Reissue Of Shares - 3 MCQs with Answers

Prepare for the Issue, Forfeiture And Reissue Of Shares - 3 within the Commerce exam with comprehensive MCQs and answers at EduRev. Our platform offers a wide range of practice papers, question papers, and mock tests to familiarize you with the exam pattern and syllabus. Access the best books, study materials, and notes curated by toppers to enhance your preparation. Stay updated with the exam date and receive expert preparation tips and paper analysis. Visit EduRev's official website today and access a wealth of videos and coaching resources to excel in your exam.

Online Tests for Issue, Forfeiture And Reissue Of Shares - 3 Accountancy Class 12

Practice with a wide array of question papers that follow the exam pattern and syllabus. Our platform offers a user-friendly interface, allowing you to track your progress and identify areas for improvement. Access detailed solutions and explanations for each test to enhance your understanding of concepts. With EduRev's Online Tests, you can build confidence, boost your performance, and ace Issue, Forfeiture And Reissue Of Shares - 3 with ease. Join thousands of successful students who have benefited from our trusted online resources.
© EduRev
Education Revolution
Follow Us
Signup to see your scores go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup