Accounting for share Capital Test

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Accounting for share Capital Test - 49

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Question 1
1 / -0

The following information pertains to X Ltd.
Called-up-share capital= Rs. 5,00,000
Calls-in-arrears=Rs. 40,000
calls-in-advance=Rs. 25,000
Proposed dividend=15%
The amount of payable is ____________.

A
Rs. 75,000

B
Rs. 72,750

C
Rs. 71,250

D
Rs. 69,000

Solution

Called-up-share capital= Rs. 5,00,000,
Calls-in-arrears=Rs. 40,000
calls-in-advance=Rs. 25,000
Proposed dividend=15%
The amount payable ( 5,00,000 - 40,000) x 15% = Rs. 69,000.
Dividend is not paid on Calls in advance.
Question 2
1 / -0

When shares are not payable in a lump sum, third instalment is called ______________.

A
Application Money

B
Allotment Money

C
First Call Money

D
Final Call money

Solution

Final call: The remaining amount of the shares allotted is called up by writing a letter to the shareholders which are known as calls on the share. Such remaining amount is called up after receiving the allotment money. The balance of share money can be called up either in one or two installments. If the entire balance of share is called up at once, it is called ‘first and final call’. However, if the balance of share is called up in two different installments, it is called first call and second and final call respectively.
Question 3
1 / -0

Which of the following security can be forfeited for non-payment of call?

A
Shares.

B
Debentures.

C
Bonds.

D
Any of the above.

Solution

Debentures & Bonds are in the nature of loan provided to a company and usually have a high face value and periodic payment of interest to the debenture holders & bond holders. So it is highly unlikely that there is a default of payment of money by denture holders & bond holders.
But default in payment of call money is quite a common event in case of shares. Hence this is the reason that shares can be forfeited for non-payment of call & not debenture & bonds.
Question 4
1 / -0

Which of the following statement is true in relation to provisions of Companies Act, 2013?

A
In case of a private company, every member owing fully paid-up shares can freely transfer shares held by him subject to the provisions in the articles of the company.

B
The liability of the members of a company is limited to the extent of the market value or nominal value whichever is less of the shares held by them.

C
A company being a body corporate can sue but cannot be sued in its own name.

D
The corporate veil can be lifted to see why company is making huge advertisement cost even if it is incurring losses.

Solution

In case of a private company, every member owing fully paid-up shares can freely transfer shares held by him subject to the provisions in the articles of the company.
Question 5
1 / -0

X Ltd. made a final call on equity share @Rs. 20 each. face value of share is Rs. 100. one share holder holding 300 shares paid the final call after 2.5 months after it has become due.the company had adopted Table F of schedule I to the companies Act 2013 , the amount of interest on Calls-in-Arrear=?

A
Rs. 75

B
Rs.125

C
Rs. 150

D
Rs. 100
Question 6
1 / -0

Minimum paid-up capital for a private company is __________ as per Companies Act, 2013.

A
Rs Two lakh

B
Rs One lakh

C
Rs Five lakh

D
Rs Ten lakh

Solution

The Companies Act, 2013 earlier mandated that all Private Limited Companies have a minimum paid up capital of Rs.1 lakh. This meant that Rs.1 lakh worth of money had to be invested inthe company by purchase of the company shares by the shareholders to start business.
Question 7
1 / -0

Which of the following can be treated as type of shares?

A
Equity

B
Preference share

C
Both (A) & (B)

D
None of the above

Solution

A business can raise funds from various sources. Each of the source has unique characteristics, raising through shares is a type of source of funds. The capital obtained by issue of shares is known as share capital. Equity shares and preference shares are treated as types of shares. Equity shares are owner's share capital
Question 8
1 / -0

The amount received as calls-in-advance is a _____of the company.

A
Right

B
Asset

C
Debt

D
Revenue

Solution

Sometimes some shareholders pay a part or the whole of the amount of the calls not yet made. The amount so received from the shareholders is known as “Calls in Advance”. The amount received in advance is a liability of the company and should be credited to 'Call-in-Advance Account.”
This is a Debt of the company.
Question 9
1 / -0

W Ltd. issued 2,00,000 shares of rs. 100 each at a premium of 20% on May 1,2015, payable as follows:
On application (inclusive of premium) Rs.45
On allotment Rs.25
On first & final call Rs.50
Sunil to whom 10,000 shares were allotted, has paid Rs.5,00,000 on June 1,2015. At the time of remitting the allotment money, he indicated the excess that money should be adjusted towards the call money.The directors of the company made the first and the final call on October 31,2015. The company has a policy of paying interest on calls-in-advance as per Table F of Schedule I to the Companies Act 2013. The amount of interest paid to sunil on calls-in-Advance will be_______________-

A
Rs. 25,000

B
Rs. 12,500

C
Rs. 20,833.33

D
Rs. 18,750

Solution

Amount Due on allotment : 10,000*25 = 2,50,000
amount paid on Allotment = 5,00,000
Amount adjusted on calls : 5,00,000 - 2,50,000
Final call was made 5 month after allotment
So, Interest on calls in advance @ 12% for 5 months =
2,50,000*12%*5/12
= 12,500 Rs.
Question 10
1 / -0

A company has perpetual succession which means ____________________.

A
Its continued existence for an indefinite period unless its all members dies

B
Its continued existence for an indefinite period unless its all members become insolvent

C
Its continued existence for an indefinite period unless its all members become of unsound mind

D
Its continued existence for an indefinite period unless it is wound up by law.

Solution

In company law, perpetual succession is the continuation of a corporation's or other organization's existence despite the death, bankruptcy, insanity, change in membership or an exit from the business of any owner or member, or any transfer of stock,etc.

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Accounting for share Capital Test - 49

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Accounting for share Capital Test - 49

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Question 1

Rs. 75,000

Rs. 72,750

Rs. 71,250

Rs. 69,000

Solution

Question 2

Application Money

Allotment Money

First Call Money

Final Call money

Solution

Question 3

Shares.

Debentures.

Bonds.

Any of the above.

Solution

Question 4

In case of a private company, every member owing fully paid-up shares can freely transfer shares held by him subject to the provisions in the articles of the company.

The liability of the members of a company is limited to the extent of the market value or nominal value whichever is less of the shares held by them.

A company being a body corporate can sue but cannot be sued in its own name.

The corporate veil can be lifted to see why company is making huge advertisement cost even if it is incurring losses.

Solution

Question 5

Rs. 75

Rs.125

Rs. 150

Rs. 100

Question 6

Rs Two lakh

Rs One lakh

Rs Five lakh

Rs Ten lakh

Solution

Question 7

Equity

Preference share

Both (A) & (B)

None of the above

Solution

Question 8

Right

Asset

Debt

Revenue

Solution

Question 9

Rs. 25,000

Rs. 12,500

Rs. 20,833.33

Rs. 18,750

Solution

Question 10

Its continued existence for an indefinite period unless its all members dies

Its continued existence for an indefinite period unless its all members become insolvent

Its continued existence for an indefinite period unless its all members become of unsound mind

Its continued existence for an indefinite period unless it is wound up by law.

Solution

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