Accounting for share Capital Test

Result

Accounting for share Capital Test - 57

Score
-
out of -
Rank
-
out of -

TIME Taken - -

SHARING IS CARING

If our Website helped you a little, then kindly spread our voice using Social Networks. Spread our word to your readers, friends, teachers, students & all those close ones who deserve to know what you know now.

Weekly Quiz Competition

Question 1
1 / -0

Y Ltd. forfeited 40 shares of Rs 10 each issued at a premium of 40% to Mr. Ramesh who had applied for 48 shares. After having paid Rs 6 (including Rs 2 premium), he did rot pay allotment money of Rs 2 (including Re 1 premium) and on his subsequent failure to pay the first call of Rs 3 (including Re 1 premium) his shares were forfeited. The amount to be credited to Forfeited Shares Account is _______.

A
Rs 288

B
Rs 200

C
Rs 192

D
Rs 160

Solution

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.
$$Forfeiture\quad Amount\quad=Application\quad per\quad share$$
Substitute the values in the above equation
$$Forfeiture\quad Amount\quad =Rs6$$
Forfeiture amount is the money received by the company on forfeiture (cancellation of share) or on the reissue of share.
$$Total\quad share\quad forfeiture\quad Amount\quad =\quad Shares\quad forfeited\quad \times \quad Forfeiture\quad amount\quad$$
Substitute values in the above equation
$$Total\quad share\quad forfeiture\quad Amount\quad =\quad 48shares\times Rs6\\ \quad =Rs288\quad \quad$$
Thus, the amount to be credited to share forfeiture account is $$Rs288$$ while shares are being forfeited or canceled.
Question 2
1 / -0

X Ltd. forfeited 100 shares of Rs 10 each (Rs 8 called up) issued at a premium of 2 per share to Mr. R for non-payment of allotment money of Rs 5 per share (including premium). Out of these 70 shares were re-issued to Mr. Sanjay as Rs 8 called up for Rs 10 per share. The profit on re-issue is-

A
Rs 500

B
Rs 400

C
Rs 350

D
None of these

Solution

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.
$$Forfeiture\quad Amount=Application\quad Amount\quad +\quad Allotment\quad Amount$$
Substitute the values in above equation
$$Forfeiture\quad Amount=Rs5$$
Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.
$$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$$
Substitute the values in the above equation
$$Forfeiture\quad Amount=100shares \times Rs5= Rs500$$
$$Forfeiture\quad Amount\quad for\quad 70shares=70shares \times Rs5=Rs350$$
$$Forfeiture\quad Amount\quad on\quad reissue=\quad 7shares\times Rs0\quad = Rs0\\ $$
Profit on the reissue is the profit earned by the company when the forfeited shares are reissued
$$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture\quad -\quad Forfeited\quad Amount\quad on\quad Reissue$$
Substitute the values in the above equation
$$Profit\quad on\quad reissue=Rs350-Rs0 = Rs350$$
Hence, the profit earned on the reissue of shares is Rs $$350$$.
Question 3
1 / -0

A Public Co. can have a minimum of _________ members.

A
Any number

B
Seven

C
Twenty

D
Fifty

Solution

Public company is a company whose shares are freely traded in a stock market.
A company to be formed as a public company needs at least 7 members.
Question 4
1 / -0

A company forfeited $$100$$ equity shares of Rs. $$100$$ each issued at premium of $$50\%$$ (to be paid at the time of allotment) on which the first call money of Rs. $$30$$ per share was not received, final call Rs. $$20$$ is yet to be made. These shares were subsequently reissued $$@$$ Rs. $$70$$ per share at Rs. $$80$$ paid up. The amount credited to capital reserve is?

A
$$4000$$

B
$$2000$$

C
$$3000$$

D
None

Solution

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.
$$Forfeiture\quad Amount=Application\quad Amount$$
Substitute the values in above equation
$$Forfeiture\quad Amount=Rs50$$
Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.
$$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$$
Substitute the values in the above equation$$Forfeiture\quad Amount=100shares \times Rs50= Rs5000$$
$$Forfeiture\quad amount\quad on\quad reissue=100shares \times Rs10=Rs1000$$
Profit on the reissue is the profit earned by the company when the forfeited shares are reissued
$$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture$$
Substitute the values in the above equation
$$Profit\quad on\quad reissue= Rs5000-Rs1000= Rs4000$$
Hence, the profit earned on the reissue of shares is Rs $$4000$$ and credited to capital reserve account.
Question 5
1 / -0

_______ is to be executed on a non judicial stamp paper.

A
Share warrant

B
Power of attorney

C
Incorporation certificate

D
None of the above

Solution

Power of attorney is to be executed on a non judicial stamp paper. Power of attorney is legal document which gives power to a person to act like another person.
Question 6
1 / -0

Z Ltd. forfeited 200 shares of Rs 100 each, issued at 10% premium for non-payment of allotment money of Rs 50 per share (including premium), first call of Rs 40 per share and a second and final call of Rs 10 per share. Out of these 80 shares were re-issued as fully paid-up for Rs 95 per share. The profit on re-issue is __________.

A
Rs 2,000

B
Rs 1,600

C
Rs 400

D
None of these

Solution

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.
$$Forfeiture\quad Amount=Application\quad Amount\quad +\quad Allotment\quad Amount$$
Substitute the values in above equation
$$Forfeiture\quad Amount=Rs10$$
Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.
$$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$$
Substitute the values in the above equation
$$Forfeiture\quad Amount=200shares \times Rs10= Rs2,000$$
$$Forfeiture\quad Amount\quad for\quad 80shares=80shares \times Rs10=Rs800$$
$$Forfeiture\quad Amount\quad on\quad reissue=\quad 80shares\times Rs5\quad = Rs400\\ $$
Profit on the reissue is the profit earned by the company when the forfeited shares are reissued
$$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture\quad -\quad Forfeited\quad Amount\quad on\quad Reissue$$
Substitute the values in the above equation
$$Profit\quad on\quad reissue=Rs800-Rs400 = Rs400$$
Hence, the profit earned on the reissue of shares is Rs $$400$$.
Share forfeiture a/c Dr. Rs400
To share capital a/c Rs400.
Question 7
1 / -0

MIG Ltd. forfeited 80 shares of Rs 10 each, issued for non-payment of first call of Rs 2 per share. The second and final call of Rs 3 per share has not yet been called. Out of these, 20 shares were re-issued as Rs 7 paid-up for Rs 5 per share. The profit on re-issue is _________.

A
Rs 320

B
Rs 280

C
Rs 60

D
None of these

Solution

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.
$$Forfeiture\quad Amount=Application\quad Amount\quad +\quad Allotment\quad Amount$$
Substitute the values in above equation
$$Forfeiture\quad Amount=Rs5$$
Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.
$$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$$
Substitute the values in the above equation
$$Forfeiture\quad Amount=80shares \times Rs5= Rs400$$
$$Forfeiture\quad Amount\quad for\quad 20shares=20shares \times Rs5=Rs100$$
$$Forfeiture\quad Amount\quad on\quad reissue=\quad 20shares\times Rs2\quad = Rs40\\ $$
Profit on the reissue is the profit earned by the company when the forfeited shares are reissued
$$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture\quad -\quad Forfeited\quad Amount\quad on\quad Reissue$$
Substitute the values in the above equation
$$Profit\quad on\quad reissue=Rs100-Rs40 = Rs60$$
Hence, the profit earned on the reissue of shares is Rs $$60$$.
Question 8
1 / -0

Asha Ltd, issued shares of Rs. $$100$$ each at a premium of $$25\%$$ mamta who has Rs. $$2,000$$ shares of Asha ltd. Failed Rs. $$5$$. Premium was taken at the company. On forfeiture of Mamta's shares, the amount to be debited to share Premium account will be.

A
Rs. $$5000$$

B
Rs. $$10,000$$

C
Rs. $$15,000$$

D
Nil

Solution

When the premium on shares is not received by the company then only it debits the unpaid premium amount while forfeiting the shares.
In this question, the company has received 25% premium from Mamta on her 2,000 shares. Hence, no amount would be debited to premium account on forfeit of shares since the amount to be received is excluding the security premium amount which is taken earlier by the company.
Question 9
1 / -0

When full amount is due on any call but it is not received, then the shortfall is debited to ________.

A
Calls in advance

B
Calls in arrear

C
Share capital

D
Suspense account

Solution

When a shareholder fails to pay any amount due on the calls on the due date, this amount is transferred to calls in arrear account.
Question 10
1 / -0

Right shares are issued to ________.

A
Promoters for the services

B
Holders of convertible debentures

C
Existing shareholders

D
All of the above

Solution

Right shares are the shares that are offered to the existing shareholders first. The right shares are issued in the ratio of existing shareholding of the shareholders.
These are first offered to the existing shareholders unless any special right is reserved.

User

Question Analysis

Correct -
Wrong -
Skipped -

My Perfomance

Score
-
out of -
Rank
-
out of -

Re-Attempt Weekly Quiz Competition

Accounting for share Capital Test - 57

Result

Accounting for share Capital Test - 57

Score

-

Rank

-

SHARING IS CARING

Question 1

Rs 288

Rs 200

Rs 192

Rs 160

Solution

Question 2

Rs 500

Rs 400

Rs 350

None of these

Solution

Question 3

Any number

Seven

Twenty

Fifty

Solution

Question 4

$$4000$$

$$2000$$

$$3000$$

None

Solution

Question 5

Share warrant

Power of attorney

Incorporation certificate

None of the above

Solution

Question 6

Rs 2,000

Rs 1,600

Rs 400

None of these

Solution

Question 7

Rs 320

Rs 280

Rs 60

None of these

Solution

Question 8

Rs. $$5000$$

Rs. $$10,000$$

Rs. $$15,000$$

Nil

Solution

Question 9

Calls in advance

Calls in arrear

Share capital

Suspense account

Solution

Question 10

Promoters for the services

Holders of convertible debentures

Existing shareholders

All of the above

Solution

User

Question Analysis

My Perfomance

Score

-

Rank

-

Results Announcement on: coming Monday

Stay Tuned: We’ll update you on your result via email or SMS.