Issue of Shares Question Bank
Issue of Shares and Share Capital, Buy Back of shares, Bonus Shares
In this post you will get Issue of Shares Question Bank for BCOM 2nd SEM CBCS Pattern. In this Question Bank we will cover Questions asked in the following universities exam:
– Dibrugarh UniversityÂ
– Gauhati University
– Assam University
Questions asked in Dibrugarh University Exam – BCOM 2nd SEM CBCS Pattern
2022: 3. (a) Equity Liabilities and Assets of Sunrise Ltd. as on 31st March, 2019 are given below:
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 |
Rs. |
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I. Equity and Liabilities: 1. Shareholders’ Fund: (a) Share Capital: 8,00,000 Equity Shares of Rs. 10 each. (b) Reserve and Surplus: (i) Securities Premium A/c (ii) General Reserve 2. Non-Current Liabilities: Secured Loan: 13% Debentures 3. Current Liabilities |
  80,00,000  8,00,000 72,00,000  40,00,000 40,00,000 |
|
 |
2,40,00,000 |
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II. Assets: 1. Non-Current Assets: Fixed Assets 2. Current Assets: (a) Stock-in-Trade (b) Sundry Debtors (c) Bank Balance |
 80,00,000  48,00,000 40,00,000 72,00,000 |
|
 |
2,40,00,000 |
It was decided at the meeting of shareholders –
(1) to buyback 20% of equity shares @ Rs. 12 per share;
(2) to utilize general reserve for buyback of shares;
(3) to utilize securities premium reserve for premium payable on buyback of shares.
Pass necessary journal entries and draw up the Balance Sheet after the above transactions have been given effect to. 7+7=14
2. (2005 Major) A Ltd invited application for 10000 Shares of Rs. 100 each at a premium of 6% payable as follows:
                               On application                    25
                               On allotment                       46
                               On first and final call          35
The application received for 9000 shares. All moneys due were received except the first and final call on 100 shares which were forfeited. Out of these 50 shares were reissued at Rs. 90 as fully paid pass entries in the cash book and Journal of the Company. Also show how these transactions will be reflected in the company’s balance sheet?
3. (2008 Major) A Ltd Company invited applications for 10000 shares of Rs. 100 each. The shares were issued at a discount of 10% The amount was payable as follows:
On application Rs. 20
On allotment Rs. 30
On 1st and final call __ Balance
Applications for 15000 Shares were received. Applications for 3000 shares were received. Applications for 3000 shares were rejected and allotment was made to the remaining applications on pro-rata basis. All calls were made duly received except the final call on 100 shares. These shares were forfeited. The forfeited shares were reissued at Rs. 120 per shares fully paid up. Pass the necessary Journal entries and prepare the Balance Sheet in the books of the Limited Company.
4. (2010) ABC Co. Ltd. issued prospectus inviting applications for 20000 shares of Rs 10 each at a premium of Rs 2 per share as follows:
               On Application – Rs 3
               On Allotment – Rs 5 (including premium)
               On First Call – Rs 2
               On Second Call – Rs 2
Applications were received for 30000 shares and allotment made pro-rata to the applicants of 24000 shares. Money overpaid on application was employed on account of sums due on allotment. Mr. Rajat, to whom 400 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited. Mr. Kamal, the holder of 600 shares failed to pay both the calls and his shares were forfeited after second call. Of the shares forfeited, 800 shares were issued to Mr. Anand, credited as fully paid for Rs 9 per share, the whole of Mr. Rajat’s shares being included. Pass the necessary Journal Entries to give effect to the above and prepare Bank A/c, Forfeited Shares A/c and Balance Sheet of the company.
5. (2014) PMS Ltd. Has an authorised capital of Rs. 15,00,000 in 15000 Equity Shares of Rs. 100 each. The company issued 10000 shares at a premium of Rs. 20 per share payable us under:
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Particulars |
Rs. |
|
On Application (including premium)Â Â Â Â Â Â Â |
40 |
|
On Allotment |
40 |
|
On First Call |
20 |
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On Final Call |
20 |
Applications were received for 15000 shares and allotment was made as follows:
(i) Regret letters were issued to the applicants for 3000 shares and money refunded.
(ii) Full allotment was made to the applicants for 6000 shares
(iii) The rest of the shares were allotted to the applicants for next 6000 shares on pro-rata basis, the excess application money being adjusted against amount due on allotment.
All money due was received except one shareholder named A to whom 100 shares were allotted on pro-rata basis, failed to pay his allotment money. His subsequent failures to pay the first call, his shares were forfeited. Another shareholder named B to whom 200 shares were allotted failed to pay both the calls and his shares were forfeited after the final call. Out of the above forfeited shares, 200 shares (including 50 shares of A) were reissued at Rs. 90 each as fully paid. Pass necessary Journal Entries in the books of the company.
6. (2017) Luit Co. Ltd. issued 10000 shares of Rs. 100 each at a premium of 10% payable as under:
                               On Application – Rs. 30
                               On Allotment – Rs. 60 (including premium)
                               On Call – Rs. 20
Bikash holding 700 shares failed to pay the call money. The company forfeited his shares and reissued them to Jatin as fully paid up at Rs. 90 per share. Give Journal entries to record the above transactions and show the Balance Sheet of the company.
7. (2016) A company invited the public to subscribe for 100000 equity shares of Rs. 10 each at a premium of Rs. 1 per share payable on allotment. Payments were to be made as follows:
                               On application – Rs. 3 per share.
                               On allotment – Rs. 3 per share.
                               On first call – Rs. 3 per share.
                               On final call – Rs. 2 per share.
Applications were received for 130000 shares. Applications for 20000 shares were rejected and allotment was made proportionately to the remaining applicants. Both the calls were made and all the money received expect the final call on 3000 shares which were forfeited after due notice. Later on these shares were reissued as fully paid at Rs. 8.50 per share. Pass Journal Entries in the books of the company.
8. (2015) Dhanshiri Co. Ltd. Issued 30000 shares of Rs. 100 each at a premium of 10% payable as under: –
On Application – Rs. 30
On Allotment – Rs. 60 (including premium)
On Call – Rs. 20
Bitul, holding 1000 shares failed to pay the allotment and call money. Ratul, holding 1800 shares failed to pay the call money. All these shares were forfeited and subsequently 1900 shares (including 900 shares of Ratul) reissued as fully paid-up for 80 per share. Give Journal Entries to record the above transactions and show the Balance Sheet of the company.
9. (2015 old course) XYZ Co. invited applications for 10000 shares of Rs. 100 each. The shares were issued at a premium of 10%. The amount was payable as follows:
On Application – Rs. 20
On Allotment – Rs. 40 (including premium of Rs. 10)
The balance on first and final call
Applications for 15000 shares were received. Applications for 3000 shares were rejected and allotment was made to the remaining applicants on pro-rata basis. All calls were made and were duly received except the final call on 100 shares. These shares were forfeited and reissued at Rs. 110 per shares as fully paid up. Pass necessary Journal Entries and prepare the Balance Sheet in the books of the XYS Co.
10. (2010) ABC Co. Ltd. issued prospectus inviting applications for 20000 shares of Rs 10 each at a premium of Rs 2 per share as follows:
               On Application – Rs 3
               On Allotment – Rs 5 (including premium)
               On First Call – Rs 2
               On Second Call – Rs 2
Applications were received for 30000 shares and allotment made pro-rata to the applicants of 24000 shares. Money overpaid on application was employed on account of sums due on allotment. Mr. Rajat, to whom 400 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited. Mr. Kamal, the holder of 600 shares failed to pay both the calls and his shares were forfeited after second call. Of the shares forfeited, 800 shares were issued to Mr. Anand, credited as fully paid for Rs 9 per share, the whole of Mr. Rajat’s shares being included. Pass the necessary Journal Entries to give effect to the above and prepare Bank A/c, Forfeited Shares A/c and Balance Sheet of the company.
11. (2005) Moonlight Ltd. Has an authorized capital of Rs. 250000 in 25000 equity shares of Rs. 10 each. The company issued 4000 shares as fully paid in payments of building purchased. 8000 shares where subscribed for by the public and during the first year only Rs 5 per share was called up Payable Rs. 2 on application, 1 on allotment, 1 on first call and Rs. 1 second call. The amount received of these shares was as follows: –
On 6000 shares           full amount
On 1250 shares            4 per share
On 500 shares               3 per share
On 250 shares               2 per share
The director forfeited the shares on which less than Rs. 4 per share had been paid.
Give the journal entries to record the above transactions and prepared also the Balance Sheet of the Company.
12. (2017 Old Course) Liabilities and Assets of X Ltd. as on 31st March, 2016 are given below:
|
Liabilities |
Rs. |
Assets |
Rs. |
|
Paid-up Share Capital: 2000000 Equity Shares of Rs. 10 Security Premium Reserve General Reserve 14% Redeemable Debentures Current Liabilities |
 2,00,00,000 20,00,000 1,80,00,000 1,00,00,000 1,00,00,000 |
Freehold Property Stock-in-Trade Sundry Debtors Bank Balance |
2,00,00,000 1,20,00,000 1,00,00,000 1,80,00,000 |
|
 |
6,00,00,000 |
 |
6,00,00,000 |
It was resolved in the meeting of shareholders:
1. To buyback 20% of Equity Shares @ Rs. 12 per share.
2. To utilize General Reserve for buyback of shares.
3. To utilize securities premium for premium on buyback of shares.
4. To immediately cancel the shares bought back.
Pass Journal Entries and draw up the Balance Sheet after the above transactions have been given effect to. 6+5=11
13. (2019) Equity & Liabilities and Assets of X Ltd. as on 31st March, 2019 are given below:
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 (Rs.) |
|
|
I.Equity and Liabilities: 1.Share Capital: 20,00,000 Equity Shares of Rs. 10 each fully paid Reserves & Surplus: Security Premium General Reserve Secured Loan: 14% Redeemable Debentures Current Liabilities |
  2,00,00,000  20,00,000 1,80,00,000  1,00,00,000 1,00,00,000 |
|
6,00,00,000 |
|
|
II.Assets: Fixed Assets: Freehold Property Current Assets: Stock-in-trade Sundry Debtors Bank Balance |
  2,00,00,000  1,20,00,000 1,00,00,000 1,80,00,000 |
|
6,00,00,000 |
It was resolved in the meeting of shareholders:
1) To buyback 20% of Equity Shares @ Rs. 12 per share.
2) To utilize General Reserve for buyback of shares.
3) To utilize security premium for premium on buyback of shares.
4) To immediately cancel the shares bought back.
14. (2013) A limited company has an accumulated reserve of Rs.500000. It was decided to declare bonus of Rs. 300000 out of its reserve. The bonus is too utilized as:
(1)100000 to make the existing 25000 shares of Rs. 10 each fully paid of which Rs. 6 per share called and paid.
(2)200000 by issuing 5000 bonus shares at Rs. 25 each at a premium of Rs. 15 per shares to the existing shareholders. Pass the Journal Entries in the book of the company recording the above transactions.
15. (2019) Blue Bird Co. Ltd. issued 50,000 equity shares of Rs. 100 each at a premium of 10% payable as under:
|
On application On allotment On call |
Rs. 30 Rs. 60 (including premium) Rs. 20 |
Bikram holding 1,500 shares failed to pay call money. The company forfeited his shares and later on 1,000 of these shares reissued to Prakash as fully paid up at Rs. 85 per share. Give Journal Entries to record the above transactions and show the Balance Sheet of the company.
16. (2019 Old Course) A company invited the public to subscribe for 1,00,000 equity shares of Rs. 10 each at a premium of Rs. 1 per share payable on allotment. Payments were to be made as follows:
|
On application On allotment On first call On final call |
Rs. 3 per share Rs. 3 per share Rs. 3 per share Rs. 2 per share |
Applications were received for 1,20,000 shares. Applications for 20,000 shares were rejected and money refunded. All the money were received except the first and final calls on 5,000 shares. The 5,000 shares were forfeited after due notice. Later on all these shares were re-issued as fully paid up at Rs. 8.50 per share. Pass Journal Entries in the books of the company.
PRACTICAL QUESTION BANK (FROM 2012 TO 2022)
ISSUE OF SHARES, RIGHT SHARES AND BONUS SHARES
REDEMPTION OF PREFERECE SHARES
ISSUE AND REDEMPTION OF DEBENTURES
AMALGAMATION AND EXTERNAL RECONSTRUCTION
Important Theory Questions for 2023 BCOM Exams available here.