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Equity shares cannot be issued for the p...

Equity shares cannot be issued for the purpose of :

A

Cash Receipts

B

Purchase of assets

C

Redemption of debentures

D

Distribution of dividend

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The correct Answer is:
D
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(Forfeiture of Shares issued at Premium and Reissued at Discount). A Ltd. forfeited 600 Equity Shares of Rs. 10 each issued at a premium of 20% to Ram who had applied for 720 Equity Shares, for non-payment of allotment money of Rs. 5 per equity share (including premium) and the first and final call of Rs. 5 per equity share. Out of these, 200 Equity Shares were reissued to Shyam credited as fully paid for Rs. 9 per equity share. As per the terms of issue, company was to retain the excess application money to adjust against calls. Pass Journal entries to record forfeiture and reissue of shares.

(Forfeiture of Shares Issued at Premium, Reissued at Discount). ABC Ltd. forfeited 150 Equity Shares of Rs. 10 each issued at a premium of Rs. 5 per share, for non-payment of allotment money of Rs. 8 per share (including premium of Rs. 5 per share), the first call of Rs. 2 per share and the final call of Rs. 3 per share. Out of these, 100 Equity Shares were reissued at Rs. 14 per share. Give Journal entries the forfeiture and reissue of shares.

From the following information calculate Cash Flow from Financing Activites. (i) Equity Shares were issued at a premium of 20 % (ii) 12% Preference Shares were redeemed at par (iii) 14 % Debentures were issued at a (iv) Interim dividend paid on Equity Shares ₹1,50,000 (v ) Interest paid on 14% Debentures ₹ 35,000. (vi) Underwriting Commission on Equity Shares ₹20,000. (vii) Dividend paid on Preference Shares 60,000.

(Comprehensive Illustration). Green Ltd. was registered with an authorised capital of Rs. 2,00,000 in Rs. 10 per equity share, of these 6,000 Equity Shares issued as fully paid to the vendor for purchase of building, 8,000 Equity Shares were issued for subscription and during the first year Rs. 5 per Equity Share were called-up, payable Rs. 2 on application, Rs. 1 on allotment, Rs. 1 on first call and Rs. 1 on second call. The amounts received in respect of these shares were: On 6,000 Equity Shares the full amount was received, On 1,250 shares Rs. 4 per Equity Share, On 500 shares Rs. 3 per Equity Share, On 250 shares Rs. 2 per Equity Share. The company forfeited 750 Equity Shares on which less than Rs. 4 per Equity Share had been paid. Pass Journal entries in the books of the company and also show share capital in its Balance Sheet .

Pass Journal entries in the following cases: M Ltd. forfeited 200 Equity Shares of Rs. 10 each, issued at a premium of Rs. 5 per share, held by Ram for non-payment of the final call of Rs. 3 per share. Of these, 100 shares were reissued to Vishu at a discount of Rs. 4 per share.

DK GOEL-COMPANY ACCOUNTS - ISSUE OF SHARES -MULTIPLE CHOICE QUESTIONS
  1. Liability of a shareholder is limited to ……………… of the shares allotted...

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  2. Equity shares cannot be issued for the purpose of :

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  3. Which of the following is not under the heading 'Share Capital' in a B...

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  4. Share Application Account is in the nature of :

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  5. Maximum limit of Premium on shares is :

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  6. Amount of Calls inAdvance is

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  7. Following amount were payable on issue of shares by a Company : Rs. 3 ...

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  8. The subscribed capital of a company is Rs. 80,00,000 and the nominal v...

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  9. A shareholder holding 600 shares paid the amount of call @ Rs. 5 per s...

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  10. E Ltd. had allotted 10,000 shares to the applicants of 14,000 shares o...

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  11. A company issued 4,000 equity shares of Rs. 10 each at par payable as ...

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  12. A company issued 4,000 equity shares of Rs. 10 each at par payable as ...

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  13. Which one of the following items is not a part of subscribed capital ?

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  14. Y Ltd. forfeited 400 shares of Rs. 10 each, Rs. 7 called up, for non-...

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  15. 400 shares of Rs. 10, on which Rs. 8 has been called and Rs. 5 has bee...

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  16. R Ltd. forfeited 600 shares of Rs. 100 each Rs. 70 called up on which ...

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  17. Madhu Ltd. forfeited 800 shares of Rs. 10 each issued at 10% premium t...

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  18. B Ltd. forfrited 300 shares of Rs. 100 each, Rs. 70 called up, for non...

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  19. 2,000 shares of Rs. 10, on which Rs. 7 has been called and Rs. 5 been ...

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  20. X Ltd. forfeited 400 shares of Rs. 20 each Rs. 15 called up on which a...

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