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NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce PDF Download

Question 5 : Mohit Glass Ltd. issued 20,000 shares of Rs 100 each at Rs 110 per share, payable Rs 30 on application, Rs 40 on allotment (including Premium), Rs 20 on first call and Rs 20 on final call. The applications were received for 24,000 shares and allotted 20,000 shares and reject 4,000 shares and amount returned thereon. The money was duly received. Give journal entries.
Answer :

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for CommerceQuestion 6 : A limited company offered for subscription of 1,00,000 equity shares of Rs 10 each at a premium of Rs 2 per share. 2,00,000. 10% Preference shares of Rs 10 each at par. 
The amount on share was payable as under :

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

All the shares were fully subscribed, called-up and paid.
Record these transactions in the journal and cash book of the company:
Answer :
NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce
NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce
NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

Question 7 : Eastern Company Limited, having an authorised capital of Rs 10,00,000 in shares of Rs 10 each, issued 50,000 shares at a premium of Rs 3 per share payable as follows :

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

Applications were received for 60,000 shares and the directors allotted the shares as follows:
 (a) Applicants for 40,000 shares received shares, in full.
 (b) Applicants for 15,000 shares received an allotment of 8,000 shares.
 (c) Applicants for 500 shares received 200 shares on allotment, excess money being returned.

All amounts due on allotment were received.
The first call was duly made and the money was received with the exception of the call due on 100 shares.
Give journal and cash book entries to record these transactions of the company. Also prepare the Balance Sheet of the company.
Answer : 
Note: In order to solve this question, applicants of category C has been assumed as 5000 instead of 500 and allotment to the applicants of this category has been taken as 2000 in place of 200.

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

 NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce                          


Question 8 : Sumit Machine Ltd issued 50,000 shares of Rs 100 each at discount of 5%. The shares were payable Rs 25 on application, Rs 40 on allotment and Rs 30 on first and final call. The issue were fully subscribed and money were duly received except the final call on 400 shares. The discount was adjusted on allotment. Give journal entries and prepare balance sheet.
Answer :
NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce
NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce


Question 9: Kumar Ltd purchases assets of Rs 6,30,000 from Bhanu Oil Ltd. Kumar Ltd. issued equity share of Rs 100 each fully paid in consideration. What journal entries will be made, if the share are issued, (a) at par, (b) at discount of 10 % and (c) at premium of 20%.
Answer :

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

No. of Shares issued of at par = (Amount payable over /Face Value)
6,300 Shares= {6,30,000/ 100})

Case (b)

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

No. of Shares issued of at par = NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

7,000 Shares = ; NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

Case (c)

 NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

No. of Shares issued of at par =  NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce


Question 10 : Bansal Heavy machine Ltd purchased machine worth Rs 3,20,000 from Handa Trader. Payment was made as Rs 50,000 cash and remaining amount by issue of equity share of the face value of Rs 100 each fully paid at an issue price of Rs 90 each. Give journal entries to record the above transaction.
Answer :

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

Working Notes:-

1. Number of share issued

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

Question 11 : Naman Ltd issued 20,000 shares of Rs 100 each, payable Rs 25 on application, Rs 30 on allotment , Rs 25 on first call and The balance on final call. All money duly received except Anubha, who holding 200 shares did not pay allotment and calls money and Kumkum, who holding 100 shares did not pay both the calls. The directors forfeited shares of Anubha and kumkum.
Give journal entries.

Answer:

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

Alternatively this question can be solved by debiting Calls in Arrears Account

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

Working Note: 
1. Forfeited Amount

NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce

The document NCERT Solution (Part - 3) - Accounting for Share Capital | Additional Study Material for Commerce is a part of the Commerce Course Additional Study Material for Commerce.
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FAQs on NCERT Solution (Part - 3) - Accounting for Share Capital - Additional Study Material for Commerce

1. What is share capital in accounting?
Ans. Share capital is the amount of money that a company raises by issuing shares to investors in exchange for ownership in the company. It represents the total value of the company's shares held by its shareholders.
2. How is share capital recorded in the accounting books?
Ans. Share capital is recorded in the accounting books as a liability on the company's balance sheet. It is typically categorized under the shareholders' equity section and represents the funds contributed by shareholders to the company.
3. What are the types of share capital?
Ans. There are two main types of share capital: equity share capital and preference share capital. Equity share capital represents ownership in the company and carries voting rights, while preference share capital represents ownership with certain preferential rights, such as a fixed dividend rate or priority in receiving dividends.
4. How is share capital different from retained earnings?
Ans. Share capital represents the funds raised from issuing shares, while retained earnings represent the accumulated profits of the company that have been retained and reinvested in the business. Share capital is a source of funding, whereas retained earnings reflect the company's profitability and financial performance over time.
5. Can share capital be increased or decreased after the initial issuance of shares?
Ans. Yes, share capital can be increased or decreased after the initial issuance of shares through various corporate actions such as issuing additional shares, buying back existing shares, or canceling shares. These changes are reflected in the company's financial statements and may require approval from shareholders and regulatory authorities.
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