Accounting for share Capital Test

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Accounting for share Capital Test - 65

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Weekly Quiz Competition

Question 1
1 / -0

To receive calls in advance it should be ___________.

A
authorized by articles of association

B
authorized by special resolution

C
sanctioned by central government

D
all of the above
Question 2
1 / -0

According to sec. $$2(68)$$ of the Companies Act, $$2013$$ a private limited company is one which by its article of associations __________.

A
Restrict the rights of the members to freely transfer the shares

B
Limit the number of members to $$200$$

C
Prohibit an invitation to the public to subscribe for its share

D
All of the above

Solution

As per section 2(68) of companies act, 2013 "private company" means a company having a minimum paid-up share capital of one lakh rupees or such higher paid-up share capital as may be prescribed and restrict any invitation to the public to subscribe for any securities of the company having maximum of 200 members.
Question 3
1 / -0

Sushil was holding $$300$$ shares of $$Rs. 10$$ issued at a discount of $$Rs. 2$$ per share. He paid $$Rs. 2$$ as application and failed to pay allotment money of $$Rs. 3$$ as a result of which his shares were forfeited. At the time of forfeiture of his shares Share capital A/c will be debited by ________.

A
$$Rs. 2100$$

B
$$Rs. 1500$$

C
$$Rs. 3000$$

D
$$Rs. 1800$$

Solution

Money called up on application = Rs. 2 per share
Money called up on allotment = Rs. 3 per share
Discount given on issue of shares = Rs. 2 per share
The total amount called up = Rs. 2 + 3 + 2 = Rs. 7
No. of shares forfeited = 300 shares
Therefore, the Share capital A/c will be debited by Rs. 7 x 300 shares = Rs. 2,100.
Question 4
1 / -0

DEF Ltd. invited application for issue of $$100,000$$ shares of $$Rs. 10$$ each at a premium of $$Rs. 2, Rs. 5$$ called at the time of application, $$Rs. 5$$ (including premium) at the time of allotment and balance $$Rs. 2$$ at the time of $$1st$$ call. Applications were received for $$1,30,000$$ shares. Application money was returned to the extent to $$10,000$$ shares and pro rata allotment was made to the remaining applicants of $$120,000$$. ABC to whom $$400$$ shares were allotted failed to pay first and final call. All the $$400$$ share were subsequently forfeited. There shares were subsequently re-issued at $$Rs. 8$$ fully paid. Based on the above facts, ABC must have applied for ___________.

A
$$420$$ shares

B
$$520$$ shares

C
$$480$$ shares

D
$$500$$ shares
Question 5
1 / -0

Dividend is paid on ..

A
Face value

B
Paid up value

C
Called up value

D
Nominal value
Question 6
1 / -0

From the following details calculate the number of equity shares of Rs. $$10$$ each to be issued in order to redeem the preference shares.
$$12\%$$ Redeemable preference shares of Rs. $$10$$ each $$=$$ Rs. $$150,000$$
Security premium A/c $$=$$ Rs. $$15,000$$
General Reserve A/c $$=$$ Rs. $$10,000$$
Profit and loss A/c $$=$$ Rs. $$14,000$$
Redeemable preference shares are to be redeemed at $$10\%$$ premium.

A
$$14000$$

B
$$12600$$

C
$$14300$$

D
$$13000$$
Question 7
1 / -0

LMN Ltd. invited application for issue of $$100,000$$ shares of $$Rs. 10$$ each at premium of $$Rs.2, Rs. 5$$ called at the time of applications, $$Rs. 5$$ (including premium) at the time of allotment and balance $$Rs. 2$$ at the time of $$1st$$ call. Application were received for $$1,30,000$$ shares. Application money was returned to the extent to $$10,000$$ shares and pro rata allotment was made to the remaining applicants of $$120,000$$. PQR to whom $$500$$ shares were allotted failed to pay allotment and calls money. Similarly ABC to whom $$400$$ shares were allotted failed to pay first and final call. All the $$900$$ shares were subsequently forfeited. These shares were subsequently re-issued at $$Rs. 8$$ fully paid. Based on the above facts, the minimum rate at which $$400$$ forfeited shares of ABC can be re-issued is ________.

A
$$Rs. 2$$

B
$$Rs. 3$$

C
$$Rs. 4$$

D
$$Rs. 5$$
Question 8
1 / -0

From the following details calculate the number of equity shares of Rs. $$10$$ each to be issued in order to redeem the preference shares. The company intends to raise the balance fund through issue of sufficient number of preference shares at $$10\%$$ discount.
$$12\%$$ Redeemable preference shares of Rs. $$10$$ each $$=$$ Rs. $$150,000$$
Security premium A/c $$=$$ Rs. $$15,000$$
General Reserve A/c $$=$$ Rs. $$10,000$$
Profit and loss A/c $$=$$ Rs. $$14,000$$
Redeemable preference shares are to be redeemed at $$10\%$$ premium.

A
$$14,000$$

B
$$10,000$$

C
$$8,000$$

D
$$13,000$$
Question 9
1 / -0

From the following details calculate the number of equity shares of Rs. $$10$$ each to be issued in order to redeem the preference shares.
$$10\%$$ Redeemable preference shares of Rs. $$10$$ each $$=$$ Rs. $$150,000$$
Security premium A/c $$=$$ Rs. $$20,000$$
General Reserve A/c $$=$$ Rs. $$10,000$$
Share forfeited A/c $$=$$ Rs. $$6,000$$
Profit and loss A/c $$=$$ Rs. $$10,000$$
Redeemable preference shares are to be redeemed at $$10\%$$ premium.

A
$$13,000$$

B
$$12,500$$

C
$$18,000$$

D
$$11,000$$

Solution

Preference Shares can be redeemed only out of the profits of the company, which otherwise be available for distribution as dividend, or out of fresh issue of share capital.

Here, profits available for redemption = Rs. 10,000 (General reserve) + Rs. 10,000 (P & L A/c).

Hence, fresh issue of equity share capital required = Rs. 1,50,000 – Rs. 20,000 = Rs. 1,30,000.

So, no. of equity shares to be issued = Rs. 1,30,000 / 10 (nominal value of shares) = 13000 shares.
Note: Premium payable on redemption shall be adjusted from existing securities premium A/c.
Question 10
1 / -0

From the following details calculate the number of equity shares of Rs. $$10$$ each to be issued in order to redeem the preference shares. The company intends to raise fund through equity shares at $$10\%$$ discount.
$$13\%$$ $$(50000)$$ Redeemable preference shares of Rs. $$10$$ each $$=$$ Rs. $$500,000$$
Security premium A/c $$=$$ Rs. $$55,000$$
General Reserve A/c $$=$$ Rs. $$25,000$$
Profit and loss A/c $$=$$ Rs. $$20,000$$
Redeemable preference shares are to be redeemed at $$10\%$$ premium.

A
$$39,000$$

B
$$50,000$$

C
$$48,000$$

D
$$41,000$$

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Accounting for share Capital Test - 65

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Accounting for share Capital Test - 65

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SHARING IS CARING

Question 1

authorized by articles of association

authorized by special resolution

sanctioned by central government

all of the above

Question 2

Restrict the rights of the members to freely transfer the shares

Limit the number of members to $$200$$

Prohibit an invitation to the public to subscribe for its share

All of the above

Solution

Question 3

$$Rs. 2100$$

$$Rs. 1500$$

$$Rs. 3000$$

$$Rs. 1800$$

Solution

Question 4

$$420$$ shares

$$520$$ shares

$$480$$ shares

$$500$$ shares

Question 5

Face value

Paid up value

Called up value

Nominal value

Question 6

$$14000$$

$$12600$$

$$14300$$

$$13000$$

Question 7

$$Rs. 2$$

$$Rs. 3$$

$$Rs. 4$$

$$Rs. 5$$

Question 8

$$14,000$$

$$10,000$$

$$8,000$$

$$13,000$$

Question 9

$$13,000$$

$$12,500$$

$$18,000$$

$$11,000$$

Solution

Question 10

$$39,000$$

$$50,000$$

$$48,000$$

$$41,000$$

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