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Accounting for share Capital Test - 24

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Accounting for share Capital Test - 24
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  • Question 1
    1 / -0
    When company issues shares at a premium, the amount of premium may be received by the company:
    Solution
    When a company issues shares at a premium, the premium amount will be received by it along with application money, allotment money, or calls.
  • Question 2
    1 / -0
    Anju Ltd. issued certain number of shares of Rs. 100.00 each. On all shares the application and allotment monies of Rs.15.00 and Rs. 40.00 respectively have been received. But the first call of Rs. 30.00 and second call of Rs.15.00 on 100 shares have not been received. These shares are forfeited and the entry to record forfeiture is:
  • Question 3
    1 / -0
    Amit holds 20 shares of Rs. 10.00 each on which he had paid Rs. 2.00 per share on application but could not pay Rs. 3.00 per share on allotment and Rs. 1.00 per share on first call. The journal entry to record the forfeiture of these shares is:
  • Question 4
    1 / -0
    The journal entry for the issue of shares at a premium to be recorded at the time of allotment is:
    Solution
    Share allotment a/c is debited with total allotment money due.
    Securities premium a/c Is credited with premium amount and Share capital a/c is also credited with the amount due on allotment less premium amount.
  • Question 5
    1 / -0
    When a fixed asset is acquired in exchange for shares and other securities in the enterprise, it is usually recorded at:
    Solution
    When a fixed asset is acquired in exchange for shares or other securities in the enterprise, it is usually recorded at its fair market value, or the fair market value of the securities issued, whichever is more clearly evident.
    Therefore, D is the correct option.
  • Question 6
    1 / -0
    Which of the following is correct ?
  • Question 7
    1 / -0
    Vikas was holding 30 shares of Rs. 10.00 each issued at $$10\%$$ discount. He paid Rs. 2.00 per share on application but could not pay the allotment money of Rs. 3.00 per share and his shares were forfeited. The journal entry to record forfeiture is :
  • Question 8
    1 / -0
    The profit on the re-issue of forfeited shares is transferred to ________________.
    Solution
    When a company re-issues only a part of the forfeited shares, then it will transfer only the profit relating to this part to the capital reserve. When a company re-issues shares at a price more than their face value, it shall transfer the excess amount to the Securities Premium A/c.
  • Question 9
    1 / -0
    Madhur Ltd. forfeited 10 shares of Rs. 10 each, (Rs. 8 called up) issued at a discount of $$10\%$$ to Anita on which she had paid Rs. 2 per share. Out of these, 8 shares were re-issued to Sumita as Rs. 8 called up for Rs. 6 per share. What amount is left in share forfeiture account after re-issue of 8 shares?
  • Question 10
    1 / -0
    Anmol Ltd. forfeited 20 shares of Rs. 10 each and of which Rs. 4 per share were paid. What minimum price company must charge if the forfeited shares are re-issued as Rs. 8 per share paid up?
    Solution
    Reissue of share is merely a sale of Forfeited Shares and not an allotment of shares. The forfeited shares can be reissued as per the provisions of Articles of the company.
    The Re-issue price of forfeited shares must be at least equal to the difference between the paid up value of Re-issued Shares and the Amount Forfeited on Re-issue Shares. In other words, Re-issue price must not be less than the amount unpaid on Forfeited Shares.
    Therefore, difference between Paid up value of reissue shares and amount forfeited = Rs. 8 - 4 = Rs. 4
    Therefore, B is the correct option.
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