Accounting for share Capital Test

Result

Accounting for share Capital Test - 6

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

X Limited forfeited 1,000 shares of 10 each for the non-payment of the final call of Rs.2 per share. These shares were reissued @ Rs.8 per share fully paid up. Find out the amount of capital reserve.

A
Capital Reserve ₹6,000

B
Capital Reserve ₹4,000

C
Capital Reserve ₹12,000

D
Capital Reserve ₹10,000

Solution

The amount of capital reserve will be:
Forfeited Shares A/c Dr. 6,000
To Capital Reserve 6,000

Amount forfeited =8000

Amount used on reissue=2000

Capital Reserve=8,000-2,000=6,000
Question 2
1 / -0

Directors of Vinod Limited forfeited 200 shares of ₹20 each, ₹15 per share called up on which ₹10 per share had been paid. Directors reissued all the forfeited shares to B as ₹15 per share paid up for a payment of ₹10 each. State the minimum amount at which these shares can be reissued.

A
15

B
20

C
10

D
55

Solution

While reissuing the forfeited shares the company should fix the price of reissue so that total amount received for shares 20(i.e. price of the reissued of shares i.e.10+ amount paid by the previous owner i.e.10 is not below its face value(20). This is to ensure that reissue does not amount to issue at a discount or the provisions of section 79 would become applicable.
Question 3
1 / -0

Forfeited shares can be reissued at ____________

A
Only at par

B
Par and premium only

C
Par, premium or discount

D
Par and discount only

Solution

Forfeited shares can be reissued at par, premium or discount. Directors of the company have authority to reissue forfeited shares at par, premium or discount.
Question 4
1 / -0

What entry will take place at the time of receipt of calls in arrears?

A
Bank A/c Dr.
To Calls in Advance

B
Calls in arrears A/c Dr.
To Bank A/c

C
Bank A/c Dr.
To Calls in Arrears

D
Bank A/c Dr.
To Share Application

Solution

On receipt of calls in arrears, following entry will take place:
Bank A/c Dr.
To Calls in Arrears if calls in arrears have been debited at the time they were due and not received.
Question 5
1 / -0

________ Shares have the right to receive arrears of dividend before dividend is paid to the equity shareholders.

A
Only Convertible Shares

B
Equity Shares

C
Redeemable Preference Shares

D
Cumulative Preference Shares

Solution

a preference share whose annual fixed-rate dividend, if it cannot be paid in any year, accrues until it can.
Question 6
1 / -0

Vinod Ltd. forfeited 1,000 equity shares of ₹100 each for the non-payment of first call ₹20 per share and second and final call of ₹25 per share. These shares were reissued at ₹50 per share fully paid up. Find out the capital reserve.

A
5,500

B
6,000

C
7,000

D
5,000

Solution

Amount forfeited on 1,000 shares = 1,000 x 55 = 55,000
Less : Discount on reissue 1,000 x 50 = 50,000
Amount to be transferred to capital reserve = 55,000 – 50,000 = 5,000
Question 7
1 / -0

Which account is debited When shares are issued to the promoters:

A
Premium A/c

B
Preliminary Expenses A/c

C
Incorporation Expenses A/c

D
Discount A/c

Solution

Following journal entry is to be recorded when shares are issued to the promoters:
Incorporation Expenses A/c Dr.
To Share Capital A/c
(Being shares issued to the promoters)
Question 8
1 / -0

X Ltd. invited application for 20,000 shares of the value of ₹10 each. The amount is payable as 2 on application and ₹5 on allotment and balance on First and Final call. Applications were received for 30,000 shares. Find out the amount received on application.

A
Share Application A/c Dr. 40000
To Share Capital A/c 40000

B
Share Capital A/c Dr. 10000
To Share Capital A/c 10000

C
Share Capital A/c Dr. 20000
To Share ApplicationA/c 20000

D
Share Application A/c Dr. 60000
To Share Capital A/c 60000
Bank A/c Dr. 60000
To Share Application 60000

Solution

Amount received by the company on application is ₹60,000. i.e. 30,000 (Applications received) × 2 = 60,000
Question 9
1 / -0

T Ltd. was formed with a nominal Share Capital of ₹40,00,000 divided into 4,00,000 shares of 10 each. The Company offers 130000 shares to the public payable ₹3 per share on Application, ₹ 3 per share on Allotment and the balance on First and Final Call. Applications were received for 120000 shares. All money payable on allotment was duly received, except on 200 shares held by Y. First and Final Call was not made by the Company. Call in arrears will be of

A
₹600

B
₹500

C
₹800

D
₹400

Solution

Call in Arrear will be 600 i.e. 200 shares × 3 = 600
Note: Amount of first and final call is not called by the company, so it should not be considered as Calls in Arrears.
Question 10
1 / -0

Amit Co. Ltd. Purchased a machine from M Co. for ₹64000. It was decided to pay ₹20000 in cash and balance will be paid by issue of shares of ₹10 each. Pass journal entries if shares Issued at premium of 10%

A
M Co. (Vendor) Dr. 40000
To Share Capital Account 4000

B
M CO. (Vendor) Dr. 54000
To Share Capital Account 9000
To Security Premium Account 54000

C
Amit Co. Ltd. Dr. 64000
To Share Capital Account 55000
To Security Premium Account 9000

D
M Co. (Vendor) Dr. 44000
  To Share Capital Account 40000
To Securities Premium Account 4000

Solution

No. of shares issued = 44,000/11 = 4,000

M Co. (Vendor) Dr. 44000
  To Share Capital Account 40000
To Securities Premium Account 4000
Question 11
1 / -0

V Ltd. Issued 20,000 Equity shares of ₹10 each at a premium of ₹3 payable as follows:
On Application ₹4 ; On Allotment ₹5 (including); On 1st Call ₹2 ; On 2nd Call ₹ 2.
All shares were subscribed and all money duly received. Journal entry for the amount due on Final call will be ______

A
Equity Share second and Final Call A/c Dr. 30000
To Equity Share Capital A/c 30000

B
Equity Share second and Final Call A/c Dr. 20000
To Equity Share Capital A/c 20000

C
Equity Share second and Final Call A/c Dr. 40000
To Equity Share Capital A/c 40000

D
Equity Share second and Final Call A/c Dr. 20000
To Equity Share Capital A/c 220000

Solution

Amount due on Second call is ₹40,000.
i.e. 20,000 shares x 2 = 40,000
Question 12
1 / -0

Vinod Limited forfeited 200 shares of ₹20 each, ₹15 per share called up on which ₹10 per share had been paid. Directors reissued all the forfeited shares to B as ₹15 per share paid up for a payment of ₹10 each. Find out capital reserve.

A
2500

B
2000

C
3500

D
1000

Solution

Amount to be transferred to capital reserve = 1,000
i.e. 2,000 – 1,000 = 1,000
Question 13
1 / -0

A company purchased a running business from Mahesh for a sum of ₹150,000 payable as ₹120000 in fully paid equity shares of ₹10 each and balance in cash. The assets and liabilities consisted of the following Plant and Machinery ₹40000 Stock ₹50000 Building ₹40000 Cash ₹20000 Sundry debtors ₹30000 Sundry creditors ₹20000.Calculate capital reserve.

A
₹ 10000

B
₹ 15000

C
₹ 16000

D
₹ 20000

Solution

Capital Reserve ₹10,000
Total of Assets = 40,000 + 50,000 + 40,000 + 20,000 + 30,000 = 1,80,000
Liabilities side = 1,50,000 + 20,000 = 1,70,000
Capital Reserve = 1,80,000 – 1,70,000 = 10,000
Question 14
1 / -0

If a shareholder does not pay calls money on time a notice of ___________ days should be given to the shareholder to pay the amount.

A
15

B
30

C
60

D
14 days

Solution

If a shareholder does not pay calls money on time a notice of 14 days should be given to the shareholder to pay the amount. along with interest if any.
Question 15
1 / -0

10,000 shares issued for public subscription at a premium of 10%. Full amount was payable on application. Applications were received for 15,000 shares and pro-rata allotment was made. Find the amount to be refunded?

A
No need to refund the money

B
10,000

C
1,00,000

D
55,000

Solution

Company will refund Rs.55,000 after the adjustment of application money and securities premium. (11 x 5000=55000)
Question 16
1 / -0

20,000 shares issued for public subscription at a premium of 10%. Full amount was payable on application. Applications were received for 30,000 shares and pro-rata allotment was made. Find the amount to be adjusted in securities premium?

A
10,000

B
20,000

C
1,10,000

D
1,00,000

Solution

Amount to be adjusted in securities premium ₹20,000.
i.e. 20,000 Shares × Premium ₹1 = 20,000
Question 17
1 / -0

V Ltd. Issued 20000 Equity shares of ₹10 each at a premium of ₹3 payable as follows: On Application ₹4 ; On Allotment ₹5 (including premium) On 1st call ₹2; On 2nd Call` 2.Applications were received for 30,000 shares and pro-rata allotment was made to all. Journal entry for the amount due on allotment will be ___

A
Share Allotment A/c Dr. 100000
  To Equity Share Capital A/c 60000
To Securities Premium Account 40000

B
Share Allotment A/c Dr. 100000
  To Equity Share Capital A/c 50000
To Securities Premium Account 50000

C
Share Allotment A/c Dr. 100000
  To Equity Share Capital A/c 30000
To Securities Premium Account 70000

D
Share Allotment A/c Dr. 100000
To Equity Share Capital A/c 40000
  To Securities Premium Account 60000

Solution

Amount due on allotment will be ₹1,00,000 i.e. 40,000 + 60,000 (premium).
Question 18
1 / -0

20,000 shares issued for public subscription at a premium of 10%. Full amount was payable on application. Applications were received for 30,000 shares and pro-rata allotment was made. Find the amount to be adjusted in Share Capital Account?

A
2,00,000

B
3,00,000

C
1,10,000

D
3,30,000

Solution

Amount to be adjusted in share capital account is ₹2,00,000.₹ i.e. 20,000 Shares x 10 = 2,00,000
Question 19
1 / -0

X Ltd. invited application for 10000 shares of the value of ₹10 each at a premium of 10%. The amount is payable as ₹3 on application (including premium) and ₹2 on allotment and balance on First and Final call. The whole of the above issue was applied and cash duly received. Journal entry for the application money received

A
Share Application Dr. 20000
To Share Allotment A/c 20000

B
Bank Account Dr. 30000
To Share Allotment A/c 30000

C
Bank Account Dr. 20000
To Share Application A/c 20000

D
Bank Account Dr. 30000
To Share Application A/c 30000

Solution

Application money received by the company ₹30,000.
i.e. 10,000 shares ×3 per share (including premium) = 30,000
Question 20
1 / -0

At what maximum premium companies can issue its shares?

A
10%

B
20%

C
No Limit

D
25%

Solution

There is no limit on issue of shares at premium. A company can issue its shares at any price (which is more than the face value).

User

Question Analysis

Correct -
Wrong -
Skipped -

My Perfomance

Score
-
out of -
Rank
-
out of -

Re-Attempt Weekly Quiz Competition

Accounting for share Capital Test - 6

Result

Accounting for share Capital Test - 6

Score

-

Rank

-

SHARING IS CARING

Question 1

Capital Reserve ₹6,000

Capital Reserve ₹4,000

Capital Reserve ₹12,000

Capital Reserve ₹10,000

Solution

Question 2

15

20

10

55

Solution

Question 3

Only at par

Par and premium only

Par, premium or discount

Par and discount only

Solution

Question 4

Bank A/c Dr.To Calls in Advance

Calls in arrears A/c Dr.To Bank A/c

Bank A/c Dr.To Calls in Arrears

Bank A/c Dr.To Share Application

Solution

Question 5

Only Convertible Shares

Equity Shares

Redeemable Preference Shares

Cumulative Preference Shares

Solution

Question 6

5,500

6,000

7,000

5,000

Solution

Question 7

Premium A/c

Preliminary Expenses A/c

Incorporation Expenses A/c

Discount A/c

Solution

Question 8

Share Application A/c Dr. 40000To Share Capital A/c 40000

Share Capital A/c Dr. 10000To Share Capital A/c 10000

Share Capital A/c Dr. 20000To Share ApplicationA/c 20000

Share Application A/c Dr. 60000 To Share Capital A/c 60000 Bank A/c Dr. 60000To Share Application 60000

Solution

Question 9

₹600

₹500

₹800

₹400

Solution

Question 10

M Co. (Vendor) Dr. 40000To Share Capital Account 4000

M CO. (Vendor) Dr. 54000 To Share Capital Account 9000To Security Premium Account 54000

Amit Co. Ltd. Dr. 64000 To Share Capital Account 55000To Security Premium Account 9000

M Co. (Vendor) Dr. 44000 To Share Capital Account 40000To Securities Premium Account 4000

Solution

Question 11

Equity Share second and Final Call A/c Dr. 30000To Equity Share Capital A/c 30000

Equity Share second and Final Call A/c Dr. 20000To Equity Share Capital A/c 20000

Equity Share second and Final Call A/c Dr. 40000To Equity Share Capital A/c 40000

Equity Share second and Final Call A/c Dr. 20000To Equity Share Capital A/c 220000

Solution

Question 12

2500

2000

3500

1000

Solution

Bank A/c Dr.
To Calls in Advance

Calls in arrears A/c Dr.
To Bank A/c

Bank A/c Dr.
To Calls in Arrears

Bank A/c Dr.
To Share Application

Share Application A/c Dr. 40000
To Share Capital A/c 40000

Share Capital A/c Dr. 10000
To Share Capital A/c 10000

Share Capital A/c Dr. 20000
To Share ApplicationA/c 20000

Share Application A/c Dr. 60000
To Share Capital A/c 60000
Bank A/c Dr. 60000
To Share Application 60000

M Co. (Vendor) Dr. 40000
To Share Capital Account 4000

M CO. (Vendor) Dr. 54000
To Share Capital Account 9000
To Security Premium Account 54000

Amit Co. Ltd. Dr. 64000
To Share Capital Account 55000
To Security Premium Account 9000

M Co. (Vendor) Dr. 44000
To Share Capital Account 40000
To Securities Premium Account 4000

Equity Share second and Final Call A/c Dr. 30000
To Equity Share Capital A/c 30000

Equity Share second and Final Call A/c Dr. 20000
To Equity Share Capital A/c 20000

Equity Share second and Final Call A/c Dr. 40000
To Equity Share Capital A/c 40000

Equity Share second and Final Call A/c Dr. 20000
To Equity Share Capital A/c 220000

Share Allotment A/c Dr. 100000
To Equity Share Capital A/c 60000
To Securities Premium Account 40000

Share Allotment A/c Dr. 100000
To Equity Share Capital A/c 50000
To Securities Premium Account 50000

Share Allotment A/c Dr. 100000
To Equity Share Capital A/c 30000
To Securities Premium Account 70000

Share Allotment A/c Dr. 100000
To Equity Share Capital A/c 40000
To Securities Premium Account 60000

Share Application Dr. 20000
To Share Allotment A/c 20000

Bank Account Dr. 30000
To Share Allotment A/c 30000

Bank Account Dr. 20000
To Share Application A/c 20000

Bank Account Dr. 30000
To Share Application A/c 30000