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The document presents multiple accounting questions related to equity shares, including journal entries for share forfeiture and reissue, as well as calculations for rights issues. It covers scenarios involving share subscriptions, non-payments, and the issuance of rights to existing shareholders. Key calculations include theoretical market prices, value of rights, and percentage increases in share capital.

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NIGAMANDHA DESIGAN
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16 views2 pages

Question

The document presents multiple accounting questions related to equity shares, including journal entries for share forfeiture and reissue, as well as calculations for rights issues. It covers scenarios involving share subscriptions, non-payments, and the issuance of rights to existing shareholders. Key calculations include theoretical market prices, value of rights, and percentage increases in share capital.

Uploaded by

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

Question – D247M

P Ltd. issued 6,000 equity shares of ₹10 each payable as:

 ₹3 per share on Application

 ₹5 per share (including ₹2 premium) on Allotment

 ₹4 per share on Call

All the shares were subscribed.

Money due on all shares was fully received except:

 M, holding 100 shares, failed to pay Allotment and Call money

 N, holding 200 shares, failed to pay Call money

All these 300 shares were forfeited.

Out of the forfeited shares, 250 shares (including all of M’s shares)
were reissued to Q as fully paid up at ₹8 per share.

Prepare necessary Journal Entries with narration.

Question – J247M

Jumbo Limited is planning to raise funds by making rights issue of equity


shares to part finance its expansion. The existing equity share capital of
the company is ₹ 40,00,000. The market value of its share is ₹ 45. The
company offers to its shareholders the right to buy 2 shares at ₹ 12 each
for every 5 shares held. You are required to calculate:

(i) Theoretical market price per share after the rights issue;

(ii) The value of rights; and

(iii) Percentage increase in share capital.

Question – D237M

A Ltd. has subscribed capital of ₹150 lakhs divided into 1,50,000 equity
shares of ₹100 each fully called up.

The company has taken the following decisions:

(i) 3,000 equity shares on which ₹50 per share have been received are to
be forfeited for non-payment of ₹30 (first call) and ₹20 (final call).
(ii) 6,000 equity shares of ₹80 per share paid-up are to be forfeited for
non-payment of final call.

(iii) All the 9,000 shares were re-issued @ ₹90 per share.

(iv) A rights issue is to be made in the ratio of 2 shares for every 5 shares
held at a premium of ₹30 per share.

Pass necessary journal entries (with narration) in the books of A Ltd.


Assume that the rights issue was fully subscribed.

Question – D237M

A Company is planning to raise funds by making rights issue of equity


shares to finance its expansion. The existing equity share capital of the
company is ₹50,00,000. The market value of its share is ₹42. The
company offers to its shareholders the right to buy 2 shares at ₹11 each
for every 5 shares held. You are required to calculate:

(i) theoretical market price after rights issue.

(ii) the value of rights.

(iii) percentage increase in share capital.

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