Page 48 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Unit 1: Share Capital – Issue of Shares

On second call 3 on 1st January, 2006. Mr Ramesh had 1,500 shares paid the amount of Notes
second call with first call. According to the Articles of Association, 6% interest is payable
on call-in-advance. All amounts were duly received. Mr. Dinesh who had 500 shares, paid
the amount of the first and second call with allotment. Interest was paid to both of these
shareholders on 1st January, 2006. Mr. Umesh who is the holder of 400 shares failed to pay
allotment money on its due date, but later on paid this amount with interest @ 5% p.a. with
first call. Pass the necessary journal entries to give the effect of above mentioned
transactions.
7. Issue of Shares for Consideration other than Cash:

(a) Suri Limited purchased the assets of Karim Limited for 25,00,000 payable 20% in
cash and balance in fully paid up shares of 100 each. Give the necessary journal
entries in the following cases:
(i) if these shares are issued at par
(ii) if these shares are issued at a premium of 25%
(iii) if these shares are issued at a discount of 20%

(b) Mehrotra Company Limited acquired the assets of Sudhir Limited for 50,00,000
payable as to 30,00,000 in equity shares 15,00,000 in 8% Preference shares and
balance in cash. The assets were as:

Plant & Machinery 20,00,000
Stock of Materials 1,00,000

Land & Building 25,00,000
Furniture 2,00,000
(c) Damodar Limited is floated to acquire the assets of Sonu Limited for a consideration
of 2,00,000 payable in 15,000 shares of 10 each and balance in cash. The assets
taken over include:

Land & Building 70,000
Furniture 80,000
Patents 70,000
Pass the necessary journal entries to give the effect of above mentioned transactions:

8. Expert Engineers Ltd. with an authorised capital of 10,00,000 divided into 1,00,000 equity
shares of 10 each, issued 80,000 shares payable 3 on application, 5 on allotment
(including 2 premium) and 2 each on two calls. Holders of 4,000 shares failed to pay
allotment money and further on 2,000 shares there were arrears to the first call. All these
shares were forfeited.
Then the final call was made. There was arrear on 800 shares. All the shares on which only
application money was paid and half of the shares on which there was default of first call
money were reissued at 8 as fully paid shares.
Pass journal entries and show how these will appear in the balance sheet.

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