Issue of Shares Exam Based Problems

 

Exam based problems of shares are the BEST collection of problems for sure shot success in the examination. These questions are based on board exam.

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EXAM  BASED  PROBLEMS  AND  ANSWERS

 

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 1

AX Company Limited issued 1,000 shares of $/₹/Rs 100 each at a premium of Rs 20 per share, payable as under:

          Rs 50 on application; Rs 70 on allotment (including premium)

Applications were received for all the shares and all the shares were duly allotted. All the due sums were received.

Required: Journal entries for application and allotment  

[Answer: Amount received on application = Rs 50,000,

Amount received on allotment = Rs 70,000]

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 2

AP Company Ltd issued 5,000 shares of $/₹/Rs 100 each at a discount of 10%, payable as follows:

        On application Rs 20: On allotment Rs 40: On first and final call Rs 30

The applications were received for 5,000 shares and all were accepted. All the calls money was duly received.

Required: Journal entry for application and allotment

 [Answer: Amount received on application = Rs 100,000,

Amount received on allotment = Rs 200,000]

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 3

AS Company Ltd issued 10,000 shares of $/₹/Rs 100 each at a premium of 5% payable as follows:

        On application Rs 20: On allotment Rs 35 (including premium): On first and final call Rs 50

Applications were received for all the shares. All shares were accepted and calls money was duly received.

Required: Journal entry for shares application and allotment   

[Answer: Amount received on application = Rs 200,000,

Amount received on allotment = Rs 350,000]

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 4

ABC Company Ltd issued 50,000 shares of $/₹/Rs 100 each at a premium of 10% payable as follows:

        On application Rs 20: On allotment Rs 50 (including premium): On first and final call Rs 40

Applications were received for 40,000 shares. All shares were accepted and calls money was duly received.

Required: Journal entry for shares application and allotment   

[Answer: Amount received on application = Rs 8,00,000,

Amount received on allotment = Rs 20,00,000]

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 5

S. N. Company Limited issued 5,000 shares of $/₹/Rs 100 each at a premium of Rs 10 per share payable as follows:

        On application Rs 30

        On allotment Rs 40 (including premium)

        On first call Rs 20

        On second and final calls Rs 20

All the shares were subscribed and allotted. One shareholder who held 300 shares paid the entire amount along with allotment money. However, another shareholder holding 200 shares failed to pay second and final calls.

Required: Journal entries for application, allotment and calls

[Answer:  Call in advance (6,000 + 6,000) = Rs 12,000; Arrear on final call = Rs 4,000;

*Cash received on final calls = Rs 90,000;

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 6

Kathmandu Company Limited issued 10,000 equity shares of $/₹/Rs 100 each at Rs 90 per share, payable as:

        On application Rs 50; On allotment Rs 20; On first and final call Rs 20

All money was duly received except a shareholder holding 1,000 equity shares failed to pay allotment and call money and another shareholder holding 100 equity shares paid the entire amount on allotment.

The Board of Directors decided to forfeit the shares on which only application money was received.  

Required: journal entry for:

(a) Share application; (b) Share allotment; (c) Shares first and final call; (d) Forfeiture of shares

[Answer: Arrears on allotment = Rs 20,000; Advance for final call = Rs 2,000;

Cash received on final call = Rs 178,000; arrears on final call = Rs 20,000;

Share forfeiture = Rs 50,000;

 

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PRO RATA

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 7

Annapurna Company Ltd issued 1,00,000 equity shares of $/₹/Rs 10 each, payable as follows:

          Rs 6 on application

          Rs 3 on allotment (including premium)

          Rs 2 on first and final call

Applications were received for 1,20,000 shares. The excess application money is to be utilized towards allotment. All money was duly received except the first and final call money on 500 shares.

A shareholder holding 1,000 shares paid the entire amount with the allotment money.  The Board of Directors decided to forfeit the shares on which there are call in arrears 

Required: journal entry for: share application, allotment, first and final call, share forfeiture

 [Answer: Advance on allotment = Rs 2,000 and Bank = Rs 182,000;

Arrear on final call = Rs 1,000; Share forfeiture = Rs 4,000; 

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 8

Himal Company Limited issued 10,000 equity shares of $/₹/Rs 100 each at Rs 90 payable as:

          Rs 20 on application

          Rs 30 on allotment (adjusting discount)

          Rs 40 on first and final call

Applications were received for 20,000 shares. Board of Directors decided to accept the applications for 5,000 shares in full, 5,000 shares were rejected, and remaining 10,000 shares were allotted on pro-rata basis. All payments were duly received except first and final call of 400 shares issued on pro-rata basis.

Required: Journal entry for share application, allotment, first and final call

 [Answer: Excess on allotment = Rs 100,000; Bank = Rs 300,000;

Arrear on final call = Rs 16,000; Share forfeiture = Rs 20,000; 

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 9

B Company Ltd was registered with a share capital of $/₹/Rs 10,00,000 divided into 10,000 shares of $/₹/Rs 100 each, 5,000 shares were offered to the public for subscription at Rs 120 per share. The money was payable as follows:

        On application Rs 30 per share

        On allotment Rs 40 per share (including premium)

        On first call Rs 20 per share

        On final call Rs 30 per share

Applications were received for 8,000 shares. No allotment was made to the applicants for 2,000 shares. Rests were allotted on pro-rata basis. All calls were duly made and received except, a shareholder holding 200 shares paid the full value of shares on allotment and another shareholder holding 300 shares failed to pay the first call on due date

Required: Journal entries for application, allotment, first call and final calls

[Answer: Advance for first calls = Rs 4,000; Advance for final calls = Rs 6,000;

Arrears on first call = Rs 6,000; Arrears on final call = Rs 9,000;

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 10

ABC Company Ltd was registered with a share capital of $/₹/Rs 20,00,000 divided into  50,000 shares of $/₹/Rs 40 each. 30,000 shares were offered to public at Rs 50 per share. The calls were made as follows:

        On application Rs 10 per share

        On allotment Rs 20 per share (including premium)

        On first and final call Rs 20 per share

Applications were received for 40,000 shares. No allotment was made to 4,000 shares. Rests were allotted on pro-rata basis. Directors have the right to utilize the excess money received into subsequent calls. All the calls were made and the call money was received. However, shareholders holding 500 shares failed to pay the last call on due date.

Required: Journal entry for application, allotment, first and final call

 [Answer: Amount received on allotment (Bank) = Rs 540,000;

Arrears on final call = Rs 10,000;

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 11

AM Company Ltd Invited applications for 15,000 shares of $/₹/Rs 100 each. The calls are made as follows:

        On application Rs 20 per share

        On allotment Rs 40 per share (Rs 10 premium per share)

        On first and final calls Rs 50 per share

Applications were received for 21,000 shares. No allotment was made to 1,000 shares. Rests were allotted on the pro-rata basis. All the calls were made and the calls money was duly received. However, shareholder holding 450 shares failed to pay the last calls on due date.

Required: Journal entry for application, allotment, first and final call        

[Answer: Received on allotment = Rs 500,000; Arrears on final call = Rs 22,500]

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 12

AC Company Limited issued 5,000 shares of $/₹/Rs 100 each payable as under:

        On application Rs 40; On allotment Rs 30; On first and final calls Rs 30        

Applications were received for 8,000 shares and allotment was made on the following basis:

        To applicants for 3,000 shares                  full

        To applicants for 4,000 shares                  2,000 shares

        To applicants for 1,000 shares                  Nil

All excess amount paid on application is to be adjusted against amount due on allotment and subsequent calls. The shares were fully called and paid up except one shareholder to whom 100 shares were allotted failed to pay first and final calls and his shares were forfeited.

Required: Journal entries for application, allotment, first and final calls and forfeiture

[Answer: Arrear on calls = Rs 2,000; Share forfeiture = Rs 8,000)

*Excess on allotment = Rs 60,000; Excess on calls = Rs 20,000]

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 13

ABC Company Ltd issued 75,000 shares of $/₹/Rs 100 each at 10% discount payable as follows:

        On application Rs 30 per share

        On allotment Rs 30 per share

        On first and final call Rs 30 per share

Applications were received for 90,000 shares and allotment made as under:

        To applicants for 60,000 shares      full

        To applicants for 30,000 shares      50%

The excess money on applications was utilized towards the sum due on allotment. A shareholder to whom 1,000 shares were allotted from pro-rata basis failed to pay first and final call money. His shares were forfeited.

Required: Journal entries for application, allotment, first and final calls and forfeiture

[Answer: Excess for allotment = Rs 450,000; Allotment bank = Rs 25,50,000;

Arrear on final call = Rs 30,000; Share forfeiture = Rs 60,000]

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 14

ABC Company Ltd issued 5,000 shares of $/₹/Rs 100 each payable as under:

        On application Rs 30 per share; on allotment Rs 40 per share; on first and final call Rs 30 per share

Applications were received for 7,000 shares and allotment made as under:

        To applicants for 2,000 shares         2,000 shares

        To applicants for 4,000 shares         3,000 shares

        To applicants for 1,000 shares         Nil

It is resolved that excess money paid on application is to be adjusted against amount due on allotment. All monies were duly received except a shareholder holding 200 shares were allotted from pro-rata basis failed to pay call money.

Required: Journal entries for application, allotment, first and final calls and forfeiture

[Answer: Excess for allotment = Rs 30,000; Allotment bank = Rs 170,000;

Arrear on final call = Rs 6,000; Share forfeiture = Rs 14,000]

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 15

Binayak Company Ltd invited applications for 5,000 shares for $/₹/Rs 100 each, payable as under:

        On application Rs 20

        On allotment Rs 40

        On first and final call Rs 40

Applications were received for 20,000 shares. The allotment was made as follows:

        To the applicants of 14,000 shares Nil

        To the applicants of 4,000 shares   Full

        To the applicants of remaining shares 50%

It was decided to utilize excess applications money in part payment of allotment. All money was duly received except a holder who applied for 200 shares and was given 100 shares failed to pay the allotment and call money. The Board of Directors decided to forfeit these shares.

Required: Journal entries for share application, allotment, first and final call and share forfeiture

 [Answer: Arrears on allotment = Rs 2,000; Bank allotment = Rs 178,000;

Arrears on calls = Rs 4,000; Share forfeiture = Rs 4,000]

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 16

ABC Company limited invited applications for 10,000 shares of $/₹/Rs 100 each payable as under:

        On application Rs 30; on allotment Rs 45 (after discount); on first and final call Rs 20

The public applied for 15,000 shares. Applications for 3,000 shares were rejected and allotment of shares was made among the remaining applicants on pro-rata basis. It was decided to utilize excess application money in part payment of allotment.

One shareholder, holding 200 shares, failed to pay the money due on allotment and the call. His shares were forfeited.

Required: Journal entries for shares application, allotment, first and final call and Share forfeiture

[Answer: Arrear on allotment = Rs 7,200 and Bank = Rs 3,82,200;

Arrears on final call = Rs 4,000; Share forfeiture = Rs 7,200;

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 17

Birat Company Ltd issued 10,000 shares of $/₹/Rs 50 each at a premium of Rs 5 per share, payable as under:

On application Rs 15         On allotment Rs 25 (including premium)         On first and final call Rs 15 Applications were received for 15,000 shares. Allotment was made on the following basis:         To applicants for 4,000 shares         full         To applicants for 9,000 shares         6,000 shares         To rest applicants                              no allotment

 

It is resolved that the excess amount paid on application would be adjusted against the due on allotment and call. Accordingly, the shares were fully called up and paid up except one shareholder holding 400 shares on pro-rata basis failed to pay allotment and final call money.

Required: Journal entries for application, allotment, calls and share forfeiture

[Answer: Arrear on allotment = Rs 7,000; Cash received on allotment = Rs 198,000;

Arrears on calls = Rs 6,000; Share forfeiture = Rs 9,000]  

 

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 18

AM Company Ltd issued 2,000 equity shares of $/₹/Rs 100 each at a premium of $/₹/Rs 10 per share payable as follows:

        On application Rs 20 per share

        On allotment Rs 50 per share (including premium)

        On first and final call Rs 40 per share

Applications were received for 3,000 shares. These shares were allotted on pro-rata basis to the applicants of 2,400 shares and applications for 600 shares were rejected. Money overpaid on applications were utilized towards sum due on allotment. Rajesh to whom 20 shares were allotted failed to pay allotment and first and final call money, hence his shares were forfeited.

Required: Journal entries for application, allotment first and final call and forfeiture

[Answer: Arrear on allotment = Rs 920; Arrear on calls = Rs 800; Share forfeiture = Rs 480)   

 

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 19

AK Company Limited issued 50,000 equity shares of $/₹/Rs 100 each at a premium of 10% payable as follows:

        On application Rs 25

        On allotment Rs 60 (including premium)

        On first and final calls Rs 25

Applications were received for 71,000 shares. These shares were allotted on pro-rata basis to the applicants for 60,000 and applications for 11,000 shares were rejected and refunded. Money excess paid on applications were utilized towards the sum due on allotment. Suman to whom 100 shares were allotted, failed to pay allotment and first and final calls money and his shares were forfeited.

Required: Journal entries for application, allotment, first and final calls and forfeiture

 [Answer: Arrears on allotment = Rs 5,500; Cash received on allotment = Rs 27,44,500;

Arrears on calls = Rs 2,500; Cash received on calls = Rs 12,47,500;

Share forfeiture = Rs 3,000]

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