Page 105 - DCOM409_CONTEMPORARY_ACCOUNTING

Contemporary Accounting

Notes Solution:
Working note:
On allotment the 3,000 equity shareholders have not paid the allotment money so the paid up
capital would, then, be (` 26 lakh – ` 12000) 25,88.000.
On the company calling up the balance 3 per share 2000 shareholders have not honoured the call.
The paid up capital will, thus, be 34,73,000, i.e., subscribed equity capital 30 lakhs, less calls in
arrears of 27,000 plus preference shares of 5 lakhs. The entire sequence will have to be shown as
under in the balance sheet.

Amazon Artifice Ltd.
Balance sheet as on 31 March
Liabilities
Capital
Authorised
4,00,000 equity shares of ` 10 each 40,00,000
10,000. 15% Preference Shares of ` 100 each 10,00,000 50,00,000
Issued and Subscribed
3,00,000 Equity Shares of ` 10 each 30,00,000
5000 15% Pref. shares of ` 100 each 5,00,000 35,00,000
Less: Calls in arrears 27,000
Paid up capital 34,73,000
2. Reserves and Surplus: As per Companies Act, 1956 the following are the Reserves and
Surplus:
(a) Capital Reserves
(b) Capital Redemption Reserve Account
(c) Securities Premium Account
(d) Other Reserves such as – General Reserve, Reserve for depreciation etc.
(e) Surplus – The net-profit, as per profit and loss account, is to be given.
(f) Proposed Addition to Reserves
(g) Sinking Fund
Borrowers Capital Fund: There are the following types of loan capital.
1. Secured loans: If any security is given by way of a mortgage or charge on all or any of its
property, the loan is termed as secured loan and shown in the following order:
(i) Debentures: Types of debentures, redeemable and non-redeemable.
(ii) Loans and Advances from Banks
(iii) Loans and Advances from subsidiary company
(iv) Other Loans and Advances if any
2. Unsecured loans: If a company borrows loans without giving any security, then such loans
are termed as unsecured loans. Following are:
(i) Fixed deposits
(ii) Loans and Advances from Subsidiaries
(iii) Loans and Advances from the banks
(iv) Loans and Advances from others
3. Current Liabilities and Provisions:
(a) Current Liabilities: Which are payable within one year are shown in this such as
Acceptances
Sundry creditors

100 LOVELY PROFESSIONAL UNIVERSITY