Issue of Shares Other Than Cash 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  BASRD  PROBLEMS   AND   ANSWERS

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

PROBLEM: 32

Alpha Company Ltd took over the following assets and liabilities of Beta Company at an agreed value of $/₹/Rs 40,50,000:

Debtors               Rs 8,00,000 Equipment          Rs 25,00,000 Vehicle                Rs 6,00,000

Creditors                    Rs 15,00,000 Loan payable              Rs 5,00,000 Land and building      Rs 21,00,000

 

The company paid purchase price by issuing shares of Rs 100 each at 10% discount.

Required: Journal entries for purchase of business and issue of new shares

 [Answer: Goodwill = Rs 50,000; *No. of shares (Rs 40,50,000 ÷ Rs 90) = 45,000

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

PROBLEM: 33

AW Company Ltd accepted the following assets and liabilities at an agreed value of $/₹/Rs 25,20,000:

Building                                  Rs 25,00,000           Furniture                                Rs 2,00,000           Outstanding expenses           Rs 1,00,000           10% Debentures                    Rs 8,00,000

Machinery                 Rs 10,00,000 Debtors                      Rs 3,00,000 Creditors                    Rs 5,00,000

The company paid purchase price by issuing shares of Rs 100 each at a premium of 5%.

Required: Journal entries for purchase of business and issue of new shares

[Answer: Capital reserve = Rs 80,000; *No. of shares (Rs 25,20,000 ÷ Rs 105) = 24,000

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

PROBLEM: 34

AS Company Ltd has authorised capital of 50,000 equity shares of $/₹/Rs 100 each. The company issued 30,000 shares at 10% discount to purchase following assets and liabilities of MC Company (P) Ltd:

Land and building                  Rs 20,00,000           Stock                                       Rs 6,00,000

Equipment                 Rs 5,00,000 Creditors                    Rs 2,00,000

10,000 shares issued to public subscription at par.

Required: (a) Journal entries; (b) Balance sheet

[Answer: PC = Rs 27,00,000; Capital reserve = Rs 2,00,000; BS = Rs 44,00,000]

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

PROBLEM: 35

MK Company Ltd purchased following assets and liabilities of NK Company at Rs 6,00,000:

Machinery                              Rs 4,00,000           Sundry debtors                      Rs 90,000           Outstanding expenses           Rs 30,000

Motor bike                   Rs  80,000 Sundry creditors          Rs 90,000 Prepaid insurance        Rs 10,000

The amount is paid by issuing equity shares of Rs 100 each at Rs 120.

Besides this, the company issued 2,000 shares at 10% discount.  

Required: journal entries and opening balance sheet

[Answer: Goodwill = Rs 1,40,000; Balance sheet = Rs 9,20,000]

*No. of equity shares = Rs 6,00,000 ÷ Rs 120 = 5,000

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

PROBLEM: 36

AM Company Ltd issued 10,000 shares of $/₹/Rs 100 each at a premium of 20% to PM Company to purchase the following assets and liabilities:

Machinery                              Rs 8,00,000           Land                                        Rs 3,00,000           Sundry debtors                      Rs 4,80,000

Sundry creditors     Rs 2,00,000 Bank overdraft         Rs 3,00,000 Prepaid rent            Rs 20,000

The company also issued 5,000 shares issued to public subscription at 10% premium.

Required: Journal entries     

[Answer: Goodwill = Rs 1,00,000)   

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

PROBLEM: 37

HK Company Ltd took over the following assets and liabilities at an agreed purchase price $/₹/Rs 10,50,000.

Equipment                    Rs 6,50,000           Debtors                         Rs 2,00,000           Creditors                       Rs 4,00,000

Furniture                                  Rs 3,00,000 Inventory                                 Rs 5,00,000 Outstanding expenses            Rs 1,00,000

The company paid the purchase consideration issuing equity shares of Rs 100 each at 5% premium.

Required: Journal entries                        

[Answer: Capital reserve = Rs 1,00,000; Balance sheet = Rs 16,50,000]

 

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

PROBLEM: 38

XL Company Ltd issued 9,000 shares of $/₹/Rs 100 each at a premium of Rs 10 per share to purchase the following assets and liabilities:

Land and building                 Rs 600,000           Furniture                                Rs 50,000           Sundry creditors                   Rs 50,000

Plant and machinery             Rs 300,000 Sundry debtors                      Rs 90,000 Bills payable                           Rs 30,000

Besides, the company also issued 1,000 shares of Rs 100 each at Rs 112 as fully paid.

Required: Journal entries for purchase of business and issue of new shares

[Answer: Goodwill = Rs 30,000)

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

PROBLEM: 39

MS Company Ltd has authorised capital Rs 10,00,000 divided into 6,000 equity shares and 4,000; 7% preference shares of $/₹/Rs 100 each. The company took over the following assets and liabilities on NS Traders at an agreed price of Rs 4,00,000:

Liabilities	Assets
Sundry creditors                    Rs 60,000           Outstanding expenses           Rs 15,000           Overdraft balance                 Rs 10,000	Equipment                    Rs 2,50,000 Sundry debtors             Rs 80,000 Stock in trade                 Rs 1,20,000

 

Payment to this deal will be made by issuing 2,000 equity shares and 2,000 7% preference shares of Rs 100 at par. The company also issued 1,000 equity shares at 10% premium.

[Answer: Goodwill = Rs 35,000; BS = Rs 4,95,000]

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

PROBLEM: 40

AK Company Ltd took over the following assets and liabilities of BK Company Ltd at an agreed purchase price of $/₹/Rs 11,60,000.

Building                                         Rs 5,00,000 Sundry creditors                         Rs 3,10,000 Cash and bank                             Rs 22,000

Stock in trade                        Rs 3,60,000 Sundry debtors                      Rs 4,18,000 Outstanding expenses           Rs 10,000

Towards this, the company issued 10,000 fully paid equity shares of Rs 100 each at Rs 115 per share, as part payment and the balance amount paid in cash.

The company also issued 2,000 shares to public subscription at 10% discount.

Required: Journal entries and opening balance sheet

[Answer: Goodwill = Rs 1,80,000; Cash paid = Rs 10,000; BS = Rs 16,70,000]

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

PROBLEM: 41

Zonal Company has been registered with the capital of Rs 40,00,000 divided into 40,000 shares of $/₹/Rs 100 each. The company issued 10,000 shares at a premium of 10% to purchase the following assets and liabilities of a District Company

Land and building              Rs 4,00,000     Sundry creditors                Rs 2,50,000     Sundry debtors                  Rs 4,00,000

Plant and machinery                  Rs 3,00,000 Stock in trade                             Rs 2,50,000 Furniture and fixture                  Rs 3,00,000

The company also issued 10,000 shares for cash at 5% discount

Required:   (1) Entry for purchase of assets and liabilities

           (2) Opening balance sheet for the company after issue of above shares

[Answer: Capital reserve = Rs 300,000; Balance sheet = Rs 26,50,000;

*Purchase consideration = 10,000 x 110 = Rs 11,00,000

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

PROBLEM: 42

ABC Furnishing Limited shows balance sheet on 31^st March 2020 as under:

Liabilities	Amount	Assets	Amount
Authorized capital: 10,000  equity shares of Rs  100 each Issued and paid up capital: 4,000 shares of Rs  100 each     Profit and loss Current liabilities (creditors)	10,00,000 − 4,00,000 1,50,000 1,50,000	Fixed assets (machine) Current assets (stock)	3,00,000 4,00,000
	7,00,000		7,00,000

The Company issued 3,000 shares of $/₹/Rs 100 each at Rs 110 per share to purchase the business of a vendor company consisting of following assets and liabilities:

Stock in trade                        Rs 60,000                               Sundry debtors             Rs 1,40,000           Plant and machinery             Rs 60,000                               Land and building          Rs 1,20,000           Sundry creditors                   Rs 40,000

Besides, the company also issued 1,000 shares at Rs 115 as fully paid

Required: Journal entry and balance sheet of the company after issuing of above shares

[Answer: Capital reserve = Rs 10,000; Balance sheet = Rs 11,95,000]

 

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