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Test: Accounting for Share Capital- Case Based Type Questions - Commerce MCQ


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12 Questions MCQ Test Online MCQ Tests for Commerce - Test: Accounting for Share Capital- Case Based Type Questions

Test: Accounting for Share Capital- Case Based Type Questions for Commerce 2024 is part of Online MCQ Tests for Commerce preparation. The Test: Accounting for Share Capital- Case Based Type Questions questions and answers have been prepared according to the Commerce exam syllabus.The Test: Accounting for Share Capital- Case Based Type Questions MCQs are made for Commerce 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Accounting for Share Capital- Case Based Type Questions below.
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Test: Accounting for Share Capital- Case Based Type Questions - 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?

Detailed Solution for Test: Accounting for Share Capital- Case Based Type Questions - Question 1
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
Test: Accounting for Share Capital- Case Based Type Questions - 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?

Detailed Solution for Test: Accounting for Share Capital- Case Based Type Questions - Question 2
As ₹60,000 out of ₹2,00,000 is already received so only ₹1,40,000 is to be received.
Test: Accounting for Share Capital- Case Based Type Questions - 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?

Detailed Solution for Test: Accounting for Share Capital- Case Based Type Questions - Question 3
₹2,50,000 amount is received at the time of first and final call.
Test: Accounting for Share Capital- Case Based Type Questions - 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?

Detailed Solution for Test: Accounting for Share Capital- Case Based Type Questions - Question 4
No. of shares forfeited at the end of the year: 200
Test: Accounting for Share Capital- Case Based Type Questions - 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?

Detailed Solution for Test: Accounting for Share Capital- Case Based Type Questions - Question 5
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.
Test: Accounting for Share Capital- Case Based Type Questions - 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?

Detailed Solution for Test: Accounting for Share Capital- Case Based Type Questions - Question 6
Application 70,000 shares are received at the rate of ₹5 inclusive of the premium of ₹2 . 70,000 × ₹ 5 = ₹ 3,50,000
Test: Accounting for Share Capital- Case Based Type Questions - 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:

Detailed Solution for Test: Accounting for Share Capital- Case Based Type Questions - Question 7
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.
Test: Accounting for Share Capital- Case Based Type Questions - 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?

Detailed Solution for Test: Accounting for Share Capital- Case Based Type Questions - Question 8
40% of 50,000 = 20,000
Test: Accounting for Share Capital- Case Based Type Questions - 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?

Detailed Solution for Test: Accounting for Share Capital- Case Based Type Questions - Question 9
As only 50,000 shares were issued. 50,000 × ₹2 = ₹1,00,000
Test: Accounting for Share Capital- Case Based Type Questions - 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?

Detailed Solution for Test: Accounting for Share Capital- Case Based Type Questions - Question 10

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

Test: Accounting for Share Capital- Case Based Type Questions - 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?

Detailed Solution for Test: Accounting for Share Capital- Case Based Type Questions - Question 11
40,000 × ₹2 = ₹60,000 received extra from the group of 50,000 shares is to be adjusted in the share allotment.
Test: Accounting for Share Capital- Case Based Type Questions - 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?

Detailed Solution for Test: Accounting for Share Capital- Case Based Type Questions - Question 12
The first and final call amount (₹3) is not received on 500 shares. 500 × ₹3 = ₹1,500
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