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Accounting for share Capital Test - 43

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Accounting for share Capital Test - 43
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  • Question 1
    1 / -0
    B Ltd. issued 1,00,000 equity shares of Rs. 10 each to the public at par. The details of the amount payable are as follows:
    Application                Rs. 2.00
    Allotment                   Rs. 3.00
    First & final call         Rs. 5.00
    Applications were received for 1,20,000 shares. Excess application monies were refunded. All other amount was received excepting final call on 1,000 shares. These shares were forfeited and reissued at Rs. 8 per share.
    Closing balance of Bank Account will be ______.
  • Question 2
    1 / -0
    N Ltd. Issued 1,00,000 equity shares of Rs.10 each to the public at par. Full amount payable at the time of application. Application was received for 1,20,000 shares. Excess application to be credited to share capital account should be_____.
    Solution
    The total amount of equity share issued to public here is Rs 10,00,000 (Rs 1,00,000*10). Application for shares is 1,20,000 which takes the amount needed to be issued to Rs. 12,00,000. This is the case of over subscription,  This situation is termed as Over-subscription where allotment can be made only to the number of shares that are issued. The Company cannot allot more shares than the issued even if there is demand for the shares. Hence, here excess  application to be credited to share capital account should be Rs. 10,00,000.
  • Question 3
    1 / -0
    B Ltd. issued 1,00,000 equity shares of Rs. 10 each to the public at par. The details of the amount payable are as follows:
    Application                Rs. 2.00
    Allotment                   Rs. 3.00
    First & final call         Rs. 5.00
    Applications were received for 1,20,000 shares. Excess application monies were refunded. All other amount was received excepting final call on 1,000 shares. These shares were forfeited and reissued at Rs. 8 per share.
    On forfeiture of shares share, Forfeiture Account will be credited by_____.
  • Question 4
    1 / -0
    B Ltd. issued 1,00,000 equity shares of Rs. 10 each to the public at par. The details of the amount payable are as follows:
    Application                Rs. 2.00
    Allotment                   Rs. 3.00
    First & final call         Rs. 5.00
    Applications were received for 1,20,000 shares. Excess application monies were refunded. All other amount was received excepting final call on 1,000 shares. These shares were forfeited and reissued at Rs. 8 per share.
    On reissue of forfeited shares, balance of Share Forfeiture Account transferred to Capital Reserve Account will be _____.
  • Question 5
    1 / -0
    If forfeited shares are re-issued at a premium, the amount of such premium should be credited to_____.
    Solution
    The share premium account is an equity account found on a company's balance sheet. The amount in the account represents the additional amount shareholders paid for their issued shares that was in excess of the par value of those shares. If forfeited shares are re-issued at a premium, the amount of such premium should be credited to such account.
  • Question 6
    1 / -0
    B Ltd. issued 1,00,000 equity shares of Rs. 10 each to the public at par. The details of the amount payable are as follows:
    Application                Rs. 2.00
    Allotment                   Rs. 3.00
    First & final call         Rs. 5.00
    Applications were received for 1,20,000 shares. Excess application monies were refunded. All other amount was received excepting final call on 1,000 shares. These shares were forfeited and reissued at Rs. 8 per share.
    On receipt of first & final call, bank account will be debited by _____.
  • Question 7
    1 / -0
    S Ltd. issued 1,00,000 equity shares of Rs. 10 each at a premium of Rs. 2 per share to the public. Full amount payable at the time of application. Application was received for 1,20,000 shares. Excess application monies were refunded. Amount to be credited to share capital account should be____.
    Solution
    The total amount of equity share issued to public here is Rs 10,00,000 (Rs 1,00,000*10). Application for shares is 1,20,000 which takes the amount needed to be issued to Rs. 12,00,000. But here premium on the issue of shares is Rs 2 per share which means selling price is more than nominal value i.e. Rs 10. So selling price here is Rs 12 per share. This makes total amount of share issued as Rs 12,00,000. Application money Rs 1,20,000*12 i.e. Rs. 14,40,000. This situation is termed as Over-subscription where allotment can be made only to the number of shares that are issued. The Company cannot allot more shares than the issued even if there is demand for the shares. Hence, here excess  application to be credited to share capital account should be Rs. 10,00,000 and other Rs 2,00,000 will go to securities premium account.
  • Question 8
    1 / -0
    10,000 equity shares of Rs. 10 each were issued to public at a premium of Rs. 2 per share. Application was received for 12,000 shares. Amount of securities premium account will be_____.
    Solution
    In this case, nominal value of shares issued becomes Rs. 1,00,000 but selling price is Rs 1,20,000 (Rs 2 is premium). Therefore, share account will have Rs 1,00,000 and Rs 20,000 will go to the securities premium account.
  • Question 9
    1 / -0
    B Ltd. Issued 1,00,000 equity shares of Rs. 10 each to the public at par. The details of the amount payable are as follows:
    Application                Rs. 2.00
    Allotment                   Rs. 3.00
    First & final call         Rs. 5.00
    Applications were received for 1,20,000 shares. Excess application monies were refunded. All other amount was received except final call on 1,000 shares. These shares were forfeited and reissued at Rs. 8 per share.
    Amount to be refunded on allotment for excess application is ______.
  • Question 10
    1 / -0
    D Ltd. issued 1,00,000 equity shares of Rs 10 each at a premium of Rs. 2 per share. The amount payable was Rs. 2 on application, Rs. 5 on allotment (including premium) & rest on first & final call. Applications were received for 1,20,000 shares. Excess application money was refunded to applications. All monies due were received except the allotment and first & final call monies on 1,000 shares. These shares were forfeited and reissued at Rs 9 per share.
    Amount to be refunded on allotment for excess application will be _____.
    Solution
    The amount received on shares issued is Rs 12,00,000. The application money is Rs 2 per share and application received is 1,20,000 then application money received is Rs 2,40,000. But application issued were still 100000 as it is case of over-subscription and hence application money received on issuance of share is Rs 2,00,000. There amount to refunded is Rs 40,000 (Rs 2,40,000-Rs 2,00,000).
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