Q22. Smile Ltd. was registered with an authorized share capital of 50,00.000 divided into
4,00,000 Equity share of 10 each an d100,000, 12% Preference Shares of10 each. It
acquired Land and Building from M/s Jain Brothers for $20,00,000. The purchase
price was discharged by issue of 100,000 Equity Shares at a premium of 10 per share.
The company allotted 10,000 Equity Shares at a par to Promoters as remuneration for
their services rendered to incorporate the company.
The company offered to public 2,00,000 Equity Shares of 10 per share and 50,000,
12% Preference Shares at par, the entire amount being payable on application. The
entire issue was underwritten by M/s Gupta Brothers for a commission of 2% of the
issue price payable in form of Equity Shares of Smile Ltd. at par. The issue was fully
subscribed by the public.
Pass necessary Journal entries in the books of the company.
Answers
Answer:
M.234 An Aid to Accountancy—CBSE XII
(d) Stock be written down to ` 8,250.
(e) Shikha, an old customer, whose account was written off as bad debts, has given
her acceptance for ` 1,750 for 2 months in full settlement of her dues.
(f) Capital Accounts of A and B are to be adjusted by opening Current Accounts.
Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of
the new firm. (8)
17. Smile Ltd. was registered with an authorised share capital of ` 50,00,000 divided into
4,00,000 Equity Shares of ` 10 each and 1,00,000, 12% Preference Shares of ` 10 each.
It acquired Land and Building from M/s Jain Brothers for ` 20,00,000. The purchase
price was discharged by issue of 1,00,000 Equity Shares at a premium of ` 10 per share.
The company allotted 10,000 Equity Shares at par to promoters as remuneration for
their services rendered to incorporate the company.
The company offered to public 2,00,000 Equity Shares at a premium of ` 10 per
share and 50,000, 12% Preference Shares at par, the entire amount being payable
on application. The entire issue was underwritten by M/s Gupta Brothers for a
commission of 2% of the issue price payable in the form of Equity Shares of Smile Ltd.
at par. The issue was fully subscribed by the public.
Pass necessary Journal entries in the books of the company.
Or
(a) What is meant by a pro rata Allotment? Explain with example.
(b) When does the need for a pro rata allotment arise?
(c) What is Reissue of Shares?
(d) How will be the Gain (Profit) on reissue of forfeited shares dealt?
(e) XYZ Ltd. issued 10,000 shares of ` 10 each at a premium of ` 2 per share payable
as follows:
On application ` 3 per share, on allotment ` 4 per share (including ` 2 premium),
on first call ` 2.50 per share, and on second and final call ` 2.50 per share.
Mr. Ashok was allotted 500 shares.
Give the necessary Journal entry relating to forfeiture of shares in each of the
alternative cases:
Case I: If Mr. Ashok fails to pay the allotment money and his shares are
forfeited before any call is made.
Case II: If Mr. Ashok fails to pay the allotment money and on his subsequent
failure to pay the first call his shares are forfeited.
Case III: If Mr. Ashok fails to pay the first call and his shares are forfeited
before the second and final call is made.
Case IV: If Mr. Ashok fails to pay the second and final call and his shares
are forfeited. (8)