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Issue of Shares

R. ltd invited applications for 15,000 shares of ₹10 each at premium of ₹2 per share. The amount was payable as follows: On Application ₹4. On Allo

Reading Comprehension

R. ltd invited applications for 15,000 shares of ₹10 each at premium of ₹2 per share. The amount was payable as follows:
On Application ₹4.
On Allotment ₹5
On 1st call ₹2 and on final call ₹1
Applications were received for 20,000 shares. Application of 2,000 shares were rejected. Mohan, who applied for 3,000 shares was allotted in full and pro-rata allotment was made to the remaining applicants. All money was fully received with the exception of first call and final call on 3,000 shares held by Hari. These shares were forfeited and subsequently re-issued @ ₹8 per share.
On the basis of the above information answer the question.

1) Question

Calculate the total amount received on share allotment.

₹75,000

₹63,000

₹53,000

₹60,000

Solution

Correct option is B

2) Question

Record the journal entry for forfeiture of shares

Share Capital A/c Dr ₹30,000
Securities Premium Reserve A/c Dr ₹6,000
To Share 1st call A/c ₹6,000
To Share final call A/c ₹3,000
To Share forfeiture A/c ₹27,000

Bank A/c Dr ₹30,000
To Share 1st call A/c ₹6,000
To Share final call A/c ₹3,000
To Share forfeiture A/c ₹21,000

Share Capital A/c Dr ₹30,000
To Share 1st call A/c ₹6,000
To Share final call A/c ₹3,000
To Share forfeiture A/c ₹21,000

Share capital A/c Dr ₹30,000
Share forfeiture A/c Dr ₹6,000
To Share final call A/c ₹6,000
To Share I^st call A/c ₹3,000
To Securities Premium Reserve ₹27,000

Solution

Correct option is C

Share capital will be debited by face value of shares forfeited i.e., 3000×₹10=₹30,000
Share 1^st call amount is due but not received hence, it will be credited by 3000×₹2=₹6,000
Share final call amount is due but not received hence, it will be credited by 3,000×₹1=₹3,000
Share forfeiture account will be credited by actual amount received on forfeited share i.e., 3,000×7=₹21,000

3) Question

Gain on Re-issue of forfeited shares is transferred to:

Reserve Capital A/c

Capital Reserve A/c

Share forfeiture A/c

Partner's Capital A/c

Solution

Correct option is B

When a company re-issues forfeited shares and gains arise from the transaction, these gains are typically transferred to the "Capital Reserve Account." Capital reserves are used to account for profits that do not arise from day-to-day operations, such as gains on re-issuing forfeited shares.

4) Question

Calculate amount received on re-issue of shares

₹30,000

₹36,000

₹42,000

₹24,000

Solution

Correct option is D

Amount received on re-issue of shares=3,000×8=₹24,000

5) Question

Interest on calls in Advance is allowed according to 'Table F" of Companies Act, 2013 at the rate of:

6% p.a.

12% p.a.

10% p.a.

5% p.a.

Solution

Correct option is B

According to "Table F" of the Companies Act, 2013, the rate of interest on calls in advance is typically set at 12% per annum. This provision ensures that shareholders who pay their calls in advance are entitled to receive interest on the amount paid in advance at this specified rate.