Test: Accounting for Share Capital- Case Based Type Questions


12 Questions MCQ Test Accountancy Class 12 | Test: Accounting for Share Capital- Case Based Type Questions


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Attempt Test: Accounting for Share Capital- Case Based Type Questions | 12 questions in 24 minutes | Mock test for Commerce preparation | Free important questions MCQ to study Accountancy Class 12 for Commerce Exam | Download free PDF with solutions
QUESTION: 1

Based on the information below, you are required to answer the following questions:

Nidiya Limited was incorporated on 1st April 2017 with a registered office in Mumbai. The capital clause of the memorandum of Association reflected a registered capital of 8,00,000 equity shares of ₹10 each and 1,00,000 preference shares of ₹50 each.

Since some large investments were required for building and machinery the company in consultation with vendors, M/s VPS Enterprises, issued 1,00,000 equity shares and 20,000 preference shares at par to them in full consideration of assets acquired. Besides this the company issued 2,00,000 equity shares for cash at par payable as ₹ 3 on application, 2 on allotment, 3 on first call and 2 on second call.

Till date the second call has not yet been made and all the shareholders have paid except Mr. Ajay who did not pay allotment and calls on his 300 shares and Mr. Vipul who did not pay the first call on his 200 shares. Shares of Mr. Ajay was then forfeited and out of them 100 shares were reissued at ₹12 per share.

What amount of share forfeiture would be reflected in the balance sheet?

Solution: No. of shares forfeited at the end of the year: 200 Amount of share forfeiture to be reflected in the balance sheet: 200 × ₹3 = ₹600
QUESTION: 2

Based on below information you are required to answer the following questions:

The directors of Bhagat and Company Ltd. issued 50,000 equity shares of ₹10 each at ₹ 12 per share, payable as ₹ 5 on application including the premium, ₹ 4 on allotment and the balance on final call. Applications were received for 70,000 shares out of which applications for 8,000 shares were rejected and their money was refunded. Money overpaid on application was applied towards sums due on allotment. All the money were duly received except from one shareholder holding 500 shares who failed to pay the final call money.

What is the amount to be received on the Allotment of share?

Solution: As ₹60,000 out of ₹2,00,000 is already received so only ₹1,40,000 is to be received.
QUESTION: 3

Based on the information below you are required to answer the following questions:

Sangita Limited invited applications for issuing 60,000 shares of ₹10 each at par. The amount was payable as follows : On Application ₹ 2 per share On Allotment ₹ 3 per share One First and Final Call ₹ 5 per share Applications were received for 92,000 shares. Allotment was made on the following basis :

(i) To applicants for 40,000 shares — Full

(ii) To applicants for 50,000 shares — 40%

(iii) To applicants for 2,000 shares — Nil

₹1,08,000 was released on account of allotment (excluding the amount carried from application money) and ₹2,50,000 on account of call.

The directors decided to forfeit shares of those applicants to whom full allotment was made and on which allotment money was overdue.

What amount is received at the time of first and final call?

Solution: ₹2,50,000 amount is received at the time of first and final call.
QUESTION: 4

Based on the information below, you are required to answer the following questions:

Nidiya Limited was incorporated on 1st April 2017 with a registered office in Mumbai. The capital clause of the memorandum of Association reflected a registered capital of 8,00,000 equity shares of ₹10 each and 1,00,000 preference shares of ₹50 each.

Since some large investments were required for building and machinery the company in consultation with vendors, M/s VPS Enterprises, issued 1,00,000 equity shares and 20,000 preference shares at par to them in full consideration of assets acquired. Besides this the company issued 2,00,000 equity shares for cash at par payable as ₹ 3 on application, 2 on allotment, 3 on first call and 2 on second call.

Till date the second call has not yet been made and all the shareholders have paid except Mr. Ajay who did not pay allotment and calls on his 300 shares and Mr. Vipul who did not pay the first call on his 200 shares. Shares of Mr. Ajay was then forfeited and out of them 100 shares were reissued at ₹12 per share.

How many equity shares of the company have been subscribed?

Solution: No. of shares forfeited at the end of the year: 200
QUESTION: 5

Based on the information below you are required to answer the following questions:

Sangita Limited invited applications for issuing 60,000 shares of ₹10 each at par. The amount was payable as follows : On Application ₹ 2 per share On Allotment ₹ 3 per share One First and Final Call ₹ 5 per share Applications were received for 92,000 shares. Allotment was made on the following basis :

(i) To applicants for 40,000 shares — Full

(ii) To applicants for 50,000 shares — 40%

(iii) To applicants for 2,000 shares — Nil

₹1,08,000 was released on account of allotment (excluding the amount carried from application money) and ₹2,50,000 on account of call.

The directors decided to forfeit shares of those applicants to whom full allotment was made and on which allotment money was overdue.

The above case shows which of the following cases of subscription?

Solution: Oversubscribed is a term used for when the demand for a new issue of securities, such as an IPO's shares, is greater than the number of securities offered. Oversubscribed can be contrasted with an undersubscribed issue, where demand cannot fully meet the available supply.
QUESTION: 6

Based on below information you are required to answer the following questions:

The directors of Bhagat and Company Ltd. issued 50,000 equity shares of ₹10 each at ₹ 12 per share, payable as ₹ 5 on application including the premium, ₹ 4 on allotment and the balance on final call. Applications were received for 70,000 shares out of which applications for 8,000 shares were rejected and their money was refunded. Money overpaid on application was applied towards sums due on allotment. All the money were duly received except from one shareholder holding 500 shares who failed to pay the final call money.

What is the amount received on application of shares?

Solution: Application 70,000 shares are received at the rate of ₹5 inclusive of the premium of ₹2 . 70,000 × ₹ 5 = ₹ 3,50,000
QUESTION: 7

Based on the information below, you are required to answer the following questions:

Nidiya Limited was incorporated on 1st April 2017 with a registered office in Mumbai. The capital clause of the memorandum of Association reflected a registered capital of 8,00,000 equity shares of ₹10 each and 1,00,000 preference shares of ₹50 each.

Since some large investments were required for building and machinery the company in consultation with vendors, M/s VPS Enterprises, issued 1,00,000 equity shares and 20,000 preference shares at par to them in full consideration of assets acquired. Besides this the company issued 2,00,000 equity shares for cash at par payable as ₹ 3 on application, 2 on allotment, 3 on first call and 2 on second call.

Till date the second call has not yet been made and all the shareholders have paid except Mr. Ajay who did not pay allotment and calls on his 300 shares and Mr. Vipul who did not pay the first call on his 200 shares. Shares of Mr. Ajay was then forfeited and out of them 100 shares were reissued at ₹12 per share.

Shares issue to vendors of building and machinery, Ms. VPS Enterprises, would be classified as:

Solution: When an asset is acquired by a company, the payment of asset price can be made by the issue of shares or in cash to the vendor. As the term clear itself, issue of shares for consideration other than cash means shares of the company are issued to somebody for anything which is not cash.
QUESTION: 8

Based on the information below you are required to answer the following questions:

Sangita Limited invited applications for issuing 60,000 shares of ₹10 each at par. The amount was payable as follows : On Application ₹ 2 per share On Allotment ₹ 3 per share One First and Final Call ₹ 5 per share Applications were received for 92,000 shares. Allotment was made on the following basis :

(i) To applicants for 40,000 shares — Full

(ii) To applicants for 50,000 shares — 40%

(iii) To applicants for 2,000 shares — Nil

₹1,08,000 was released on account of allotment (excluding the amount carried from application money) and ₹2,50,000 on account of call.

The directors decided to forfeit shares of those applicants to whom full allotment was made and on which allotment money was overdue.

How many shares will be issued for the applicants of 50,000 shares?

Solution: 40% of 50,000 = 20,000
QUESTION: 9

Based on below information you are required to answer the following questions:

The directors of Bhagat and Company Ltd. issued 50,000 equity shares of ₹10 each at ₹ 12 per share, payable as ₹ 5 on application including the premium, ₹ 4 on allotment and the balance on final call. Applications were received for 70,000 shares out of which applications for 8,000 shares were rejected and their money was refunded. Money overpaid on application was applied towards sums due on allotment. All the money were duly received except from one shareholder holding 500 shares who failed to pay the final call money.

What is the amount received on application of shares?

What is the amount that will be transferred to the securities premium account?

Solution: As only 50,000 shares were issued. 50,000 × ₹2 = ₹1,00,000
QUESTION: 10

Based on the information below, you are required to answer the following questions:

Nidiya Limited was incorporated on 1st April 2017 with a registered office in Mumbai. The capital clause of the memorandum of Association reflected a registered capital of 8,00,000 equity shares of ₹10 each and 1,00,000 preference shares of ₹50 each.

Since some large investments were required for building and machinery the company in consultation with vendors, M/s VPS Enterprises, issued 1,00,000 equity shares and 20,000 preference shares at par to them in full consideration of assets acquired. Besides this the company issued 2,00,000 equity shares for cash at par payable as ₹ 3 on application, 2 on allotment, 3 on first call and 2 on second call.

Till date the second call has not yet been made and all the shareholders have paid except Mr. Ajay who did not pay allotment and calls on his 300 shares and Mr. Vipul who did not pay the first call on his 200 shares. Shares of Mr. Ajay was then forfeited and out of them 100 shares were reissued at ₹12 per share.

What is the amount of security premium reflected in the balance sheet at the end of the year?

Solution:

Called-up amount = ₹8 per share

Re-issue amount = ₹12 per share

Premium = ₹4 per share

Number of shares Reissued = 100

Security premium reflected in the balance sheet at the end of the year = 100 × ₹4 = ₹400

QUESTION: 11

Based on the information below you are required to answer the following questions:

Sangita Limited invited applications for issuing 60,000 shares of ₹10 each at par. The amount was payable as follows : On Application ₹ 2 per share On Allotment ₹ 3 per share One First and Final Call ₹ 5 per share Applications were received for 92,000 shares. Allotment was made on the following basis :

(i) To applicants for 40,000 shares — Full

(ii) To applicants for 50,000 shares — 40%

(iii) To applicants for 2,000 shares — Nil

₹1,08,000 was released on account of allotment (excluding the amount carried from application money) and ₹2,50,000 on account of call.

The directors decided to forfeit shares of those applicants to whom full allotment was made and on which allotment money was overdue.

How much allotment amount is already received during application?

Solution: 40,000 × ₹2 = ₹60,000 received extra from the group of 50,000 shares is to be adjusted in the share allotment.
QUESTION: 12

Based on below information you are required to answer the following questions:

The directors of Bhagat and Company Ltd. issued 50,000 equity shares of ₹10 each at ₹ 12 per share, payable as ₹ 5 on application including the premium, ₹ 4 on allotment and the balance on final call. Applications were received for 70,000 shares out of which applications for 8,000 shares were rejected and their money was refunded. Money overpaid on application was applied towards sums due on allotment. All the money were duly received except from one shareholder holding 500 shares who failed to pay the final call money.

What is the amount received on application of shares?

How much money is still not paid up on the allotted shares?

Solution: The first and final call amount (₹3) is not received on 500 shares. 500 × ₹3 = ₹1,500
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