CBSE Class 12 Accountancy Partnership Accounting For Issue Of Share Capital Notes

Other Current/Non-Current Assets:

Unamortized Expenses (Share Discount)          36,000

Current Assets:

Cash and Cash Equivalents (Cash at Bank)    3,24,000      3,60,000

Notes to Accounts:

` `

2. Share Capital

Authorised Capital --------       Issue Capital:

40,000 Shares of ` 10 each              4,00,000

Subscribed and fully paid:

36,000 Shares of ` 10 each fully paid up    3,60,000

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Question

Cinevistaas Ltd. Issued 30,000 Preference shares of ` 100 each at a discount of 5%. Payments were to be made as — ` 25 on Application; ` 35 on Allotment and ` 35 on First and Final Call.

The applications for 28,000 shares were received and all were accepted. All the money was duly received except the first and final call on 400 shares.

Give the necessary Journal Entries and prepare Cash Book of the Company. Also give the Opening Balance Sheet of the Company.

CASH BOOK (Bank Column)

` ` To Preference Share                        By Balance      26,46,000

Application A/c                                    7,00,000

To Preference Share

Allotment A/c                                     9,80,000

To Preference Share First &

Final Call A/c                                     9,66,000

                                                        26,46,000        26,46,000

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JOURNAL

Preference Share Application A/c Dr.             7,00,000

To Preference Share Capital A/c                     7,00,000 (Application money transferred to capital A/c)

Preference Share Allotment A/c Dr.               9,80,000

Share Discount A/c Dr.                               1,40,000

To Preference Share Capital A/c                  11,20,000 (Allotment due and ` 5 per share debited to share discount A/c)

Preference Share First & Final Call A/c Dr.     9,80,000

To Preference Share Capital A/c                  9,80,000 (Amount due on first & final call A/c)

Calls in Arrears A/c Dr. 14,000

To Preference Share First & Final Call A/c      14,000 (First and Final call @ `35 per share unpaid on 400 shares)

BALANCE SHEET OF Cinevistaas LTD.

As on………………

Equity and Liabilities Note No. ` ` Shareholder’s Funds:

3. Share Capital 1 27,86,000

Assets Note No. ` ` Other Current/Non-Current Assets:

Unamortized Expenses (Share Discount)        1,40,000

Current Assets;

Cash and Cash Equivalents (Cash at Bank)      26,46,000

Notes to Accounts:

4. Share Capital

Issued:

30,000 Preference Shares of ` 100 each          30,00,000

Subscribed but not fully paid:

28,000 Preference Shares of ` 100 each           28,00,000

Less: Calls in Arrear                14,000              27,86,000

Note: When Cash Book Entries are asked in the question, all cash transactions are to be recorded in Cash Book, other non-cash transactions should be entered in the journal.

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Question .

Sibar Media & Entertainment Ltd. invited applications for 1,00,000 shares of `10 each at a discount of 6% payable as follows:

On Application                      3

On Allotment                       2.40

On First and Final Call           4

The applications were received for 90,000 shares and all of these were accepted. All money due were received except the first and final call on 2,000 shares which were forfeited. 1,000 shares were re-issued @ ` 9 per share as fully paid. Assuming that all requirements of law were complied with, pass Entries in the Journal of the company. Also show how these transactions will be reflected in the compnay’s Balance Sheet.

Sibar Media & Entertainment Ltd.

Journal

` `

Bank A/c Dr.                               2,70,000

To Share Application A/c              2,70,000 (Application money received on 90,000 shares @ ` 3 per share)

Share Application A/c Dr.            2,70,000

To Share Capital A/c                  2,70,000 (Application money transferred to Share Capital A/c)

(Allotment money due on 90,000 shares; ` 2.40 per share debited to

Share Allotment A/c and ` 0.60 per share debited to Share Discount A/c)

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