Long Answer TypeOn 1st April, 2008'a company made an issue of Rs. 2,00,000, 6% Debentures of Rs. 100 each, repayable at a premium of 10%. The terms of issue provided for the redemption of 400 debentures every year starting from the end of 31-3-2010 either by purchase from the open market or by draw of lots at the company's option.
On 31-3-2010, the company purchased for cancellation 300 Debentures at 95% and 100 Debentures at 90%.
Pass the necessary Journal entries for the issue and redemption of debentures assuming that the company had already created the Debenture Redemption Reserve A/c by the required amount.
X Ltd. issued 40,000 Equity Shares of Rs. 10 each at a premium of Rs. 2.50 per share. The amount was payable as follows:
On application – Rs. 2 per share
On allotment – Rs. 4.50 per share (including premium)
and on call – Rs. 6 per share
Owing to heavy subscription the allotment was made on pro-rata basis as follows:
(a) Applicants for 20,000 shares were allotted 10,000 shares.
(b) Applicants for 56,000 shares were allotted 14,000 shares.
(c) Applicants for 48,000 shares were allotted 16,000 shares.
It was decided that excess amount received on applications would be utilized on allotment and the surplus would be refunded.
Ram, to whom 1,000 shares were allotted, who belong to category (a), failed to pay allotment money. His shares were forfeited after the call.
Pass the necessary Journal entries in the books of X Ltd. for the above transactions.
Give Journal entries to record the following transactions of forfeiture and re-issue of shares and open share forfeited account in the books of the respective companies.
(i) C Ltd. forfeited 1000 shares of Rs. 100 each issued at a discount of 8% on these shares the first call of Rs. 30 per share was not received and the final call of Rs. 20 per share was yet to be called. These shares were subsequently re-issued at Rs. 70 per share Rs. 80 paid up.
(ii) L Ltd. forfeited 470 Equity Shares of Rs. 10 each issued at a premium of Rs. 5 per share for non-payment of allotment money of Rs. 8 per share (including share premium Rs. 5 per share) and the first and final call of Rs. 5 per share. Out of these 60 Equity Shares were subsequently re-issued at Rs. 14 per share.
|
Date |
Particulars |
LF |
Debit (Rs) |
Credit (Rs) |
|
|
Share Capital A/c (1000 x 80) Dr
To Forfeited Share A/c (1000 x 42)
To Discount on Issue of Share A/c (1000 x 8)
To Share First Call A/c (1000 x 30 ) / Calls in Arrears A/c
(Being 1000 Shares Forfeited due to non payment of first call)
|
|
80000
70000
8000
2000
40000
|
42000
8000
30000
|
|
Bank A/c 1000 x 70) Dr
Discount on Issue of Share A/c Dr
Forfeited Share A/c Dr
To Share Capital A/c (1000 x 80)
(Being 1000 shares re – issued as Rs. 80 called up at Rs. 70 per share)
|
||||
|
Forfeited Share A/c Dr
To Capital Reserve A/c
(Being the profit on re- issued shares transferred to Capital Reserve A/c) |
Forfeited share Account
|
Particulars |
Amount |
Particulars |
Amount |
|
To share capital a/c
To capital reserve |
2000
40000
|
By share capital a/c |
42000
|
|
42000 |
42000
|
(ii)
|
Date |
Particulars |
Lf |
Debit (Rs) |
Credit (Rs) |
|
|
Equity Share Capital A/c (470 x 10) Dr
Securities Premium A/c (470 x 5) Dr
To Forfeited Share A/c (470 x 2)
To Equity Share Allotment A/c (470 x 8)
To Equity Share First & Final Call A/c (470 x 5)
OR
Equity Share Capital A/c (470 x 10) Dr
Securities Premium A/c (470 x 5) Dr
To Forfeited Share A/c (470 x 2)
To Calls in Arrears A/c
(Being 470 shares forfeited)
|
|
4700
2350
4700
2350
840
120 |
940
470
2350
940
6110
600
240
120 |
|
Bank A/c (60 x 14 ) Dr
To Equity Share Capital A/c (60 x 10) To Security Premium A/c (60 x 4)
(Being 60 shares re issued @ of Rs. 14 per share)
|
||||
|
Forfeited Shares A/c Dr
To Capital Reserve A/c
(Being the profit on re-issued shares transferred to capital reserve A/c) |
Forfeited shares account
|
Particulars |
Rs |
Particulars |
Rs |
|
To capital Reserve a/c
To balance c/d |
120
820 |
By share capital a/c |
940 |
|
|
940 |
|
940 |
Note: Amount of Forfeited shares transferred to capital reserve A/c = 940 x 60 / 470 = Rs. 120
From the following Balance Sheets of Vijaya Ltd. as on 31-3-2009 and 31-3-2010 prepare a Cash Flow Statement.
|
Liabilities |
31-3-2009 (Rs) |
31-3-2010 (Rs) |
Assets |
31-3-2009 (Rs) |
31-3-2010 (Rs) |
|
Share Capital General Reserve Profit & loss account Trade Creditors
|
45,000 15,000 10,000 8,700 |
65,000 27,500 15,000 11,000 |
Fixed Assets Stock Debtors Cash Preliminary expense |
46,700 11,000 18,000 2,000 1,000 |
83,000 13,000 19,500 2,500 500
|
|
|
78,700 |
1,18,500 |
|
78,700 |
1,18,500 |
Additional Information:
(i) Depreciation on Fixed Assets for the year 2009-2010 was Rs. 14,700.
(ii) An interim dividend Rs. 7,000 has been paid to the shareholders during the year.
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