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Share Capital 2

The document is a test paper focused on accounting for share capital, covering various topics such as calls in arrear, subscribed share capital, and share issuance processes. It includes multiple-choice questions, journal entry exercises, and theoretical questions related to share capital management. Additionally, it presents practical scenarios requiring journal entries for different share transactions and forfeitures.

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2 views3 pages

Share Capital 2

The document is a test paper focused on accounting for share capital, covering various topics such as calls in arrear, subscribed share capital, and share issuance processes. It includes multiple-choice questions, journal entry exercises, and theoretical questions related to share capital management. Additionally, it presents practical scenarios requiring journal entries for different share transactions and forfeitures.

Uploaded by

thrvsinghania
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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CBSE Test Paper 04

Ch-7 Accounting for share Capital

1. What rate of interest is to be used on calls in arrear as per the TABLE - F


a. 12%
b. 6%
c. 10%
d. 9%
2. Which statement is false
a. A company can call up lump sum amount on application
b. Payment of interest on calls-in-advance is not allowed at all
c. Called up share capital is that part of subscribed capital that has been called up
d. A company cannot raise fund beyond its authorized capital
3. Subscribed share capital is a part of _______
a. Paid up capital
b. Capital Reserve
c. Issued share capital
d. Un issued capital
4. When a company makes an offer or invites the public in general to subscribe its
shares, it is known as _______
a. Private Placement of shares
b. Issue of shares at premium
c. Issue of shares at par
d. Initial Public Offer (IPO)
5. Forfeited shares can be reissued at ____________
a. Par and premium only
b. Only at par
c. Par and discount only
d. Par, premium or discount

6. What is meant by Calls in arrear?

7. Vaibhav Ltd. issued 1,00,000 shares of Rs. 10 each at per. The whole amount was
payable with the application. Pass the necessary journal entries in the books of

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company.

8. What is meant by under subscribtion of share?

9. Differentiate between Reserve capital and capital reserve.

10. Name the head under which discount on issue of debentures appears in the Balance
Sheet of a company.

11. Samprag Ltd has an authorised capital of Rs. 20,00,000 divided into equity shares of
Rs. 10 each. The company invited applications for issuing 60,000 shares. Applications
for 58,000 shares
were received.
All calls were made and were duly received except the final call of Rs. 3 as share on
2,000 shares. These shares were forfeited.

i. Present the share capital m the balance sheet of the company as per Schedule III of
the Companies Act, 2013.
ii. Also prepare ‘Notes to accounts’ for the same.

12. ABC Ltd. grants options to its 100 employees to subscribe 500 shares each of Rs. 10
each within 180 days from the end of vesting period of 3 years. The fair (market)
value of each share is Rs. 45 whereas the price at which it is offered (exercise price) is
Rs. 30.
Pass the necessary Journal entries if 75 employees exercised the option by the
exercise date.

13. 50 shares of Rs. 10 each, issued at as premium of Rs. 5 per share, were forfeited by
sohan Ltd. for the nonpayment of allotment money of Rs.9 per share (including
premium). The first and final call on these shares at Rs. 3 per share was not made.
Forfeited shares were re-issued @ Rs. 12 per share, fully paid up. Journalise.

14. ‘Blue Star Ltd’ was registered with an authorised capital of Rs. 2,00,000 divided into
20,000 shares of Rs. 10 each. 6,000 of these shares were issued to the vendor for
building purchased. 8,000 shares were issued to the public and rs. 5 per share were
called up as follows.
On application — Rs. 2 per share

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On allotment — Rs. 1 per share
On first call — Balance of the called up amount
The amounts received on these shares were as follows
On 6,000 shares — Full amount called
On 1,250 shares — Rs. 3 per share
On 750 shares — Rs. 2 per share
The directors forfeited 750 shares on which Rs. 2 per share were received. Pass
necessary journal entries for the above transactions in the book of Blue Star Ltd.

15. KS Ltd invited applications for issuing 1,60,000 equity shares of Rs. 10 each at a
premium of ₹6 per share. The amount was payable as follows
On application — ₹4 per share (including premium ₹1 per share)
On allotment — ₹6 per share (including premium ₹3 per share)
On first and final call — Balance
Applications for 3,20,000 shares were received. Applications for 80,000 shares were
rejected and application money refunded. Shares were allotted on pro-rata basis to
the remaining applicants. Excess money received with applications was adjusted
towards sum due on allotment. Jain holding 800 shares failed to pay the allotment
money. His shares were forfeited immediately after allotment. Afterwards the final
call was made. Gupta who had applied for 1,200 shares failed to pay the final call.
These shares were also forfeited. Out of the forfeited shares 1,000 shares were re-
issued at ₹8 per share fully paid up. The re-issued shares included all the forfeited
shares of Jain.
Pass necessary journal entries for the above transactions in the books of KS Ltd.

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