TS Grewal Solutions for Class 12 Accountancy – Company Account – Accounting for Share Capital (Volume II)
Question 1.
Gopal Ltd. was registered with an authorised capital of Rs.50,00,000 divided into Equity Shares of Rs.10 each. The company offered for public subscription all the shares. Public applied for 4,50,000 shares and allotment was made to all the applicants. All the calls were made and were duly received except the final call of Rs.2 per share on 500 shares.
Prepare the Balance Sheet of the company showing the different types of Share Capital
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Question 2.
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Question 3.
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Question 4.
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Question 5.
A company issued Rs.2,50,000 Equity Shares of Rs.10 each to public. All amounts have been received in lump sum. Pass necessary Journal entries in the books of the company.
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Question 6.
The authorised capital of Rs.16,00,000 of XYZ Ltd. is divided into 1,60,000 Equity Shares of Rs.10 each. Out of these shares, 80,000 Equity Shares were issued to the public. The full nominal value is payable on application. All the shares were subscribed by the public and total amount was paid for. Give necessary Journal entries in the books of the company.
Solution:
Question 7.
XYZ Ltd. invited applications for 10,000 shares of Rs.10 each payable as follows: Rs.2 on application, Rs.3 on allotment, Rs.2 on first call and the balance on final call.
All the shares were applied and allotted. All the money was duly received.
You are required to Journalise these transactions
Solution:
Question 8.
A Joint Stock Company was registered with a Nominal Capital of Rs.10,00,000 divided into 10,000 shares Rs.100 each payable Rs.10 per share on application, Rs.20 per share on allotment and balance on first and final call. All the shares were taken up and fully paid for by the public.
Pass Journal entries to record the issue of shares.
Solution:
Question 9.
A company was registered with an Authorised Capital of Rs.10,00,000 divided into 7,500 Equity Shares of Rs.100 each and Rs.2,500; 9% Preference Shares of Rs.100 each. 1,000 Equity and 500 Preference Shares were offered to public on the following terms- Equity Shares payable Rs.10 on application, Rs.40 on allotment and the balance in two calls of Rs.25 each. Preference Shares are payable Rs.25 on application, Rs.25 on allotment and Rs.50 on first and final call. All the shares were applied for and allotted. Amount due was duly received. Prepare Cash Book and pass necessary Journal entries to record the above issue of shares and show how the Share Capital Account will appear in the Balance Sheet.
Solution:
Question 10.
X Ltd. invited applications for 10,000 Equity Shares of Rs.10 each issued at par. The whole amount was payable on application. The issue was oversubscribed by 2,000 shares and allotment was made on pro rata basis. Pass necessary Journal entries.
Solution:
Question 11.
Citizen Watches Ltd. invited applications for 50,000 shares of Rs.10 each payable Rs.3 on application, Rs.4 on allotment and balance on first and final call. Applications were received for 6,000 shares. Applications were accepted for 50,000 shares and remaining applications were rejected. All calls were made and received except First and Final call on 500 shares.
Pass the Journal entries in the books of Citizen Watches Ltd.
Solution:
Question 12.
ABC Company Ltd. offered for subscription 20,000 shares of Rs.10 each payable Rs.2.50 on application and Rs.5.00 on allotment for each share. Applications were received for 30,000 shares. Letters of regret were issued to applicants for 5,000 shares and their application money was refunded. Application money for other 5,000 shares was applied towards the payment for allotment money and all the 20,000 shares were issued to the public. The balance of allotment money was also received in due time.
You are asked to give the Journal, Cash Book, Ledger Accounts and the Balance Sheet of the company.
Solution:
Question 13.
Eastern Star Cycle Ltd. was registered with a capital of Rs.5, 00,000 divided into 20,000 shares of Rs.25 each. The company offered to public for subscription 10,000 shares payable Rs.5 per share on application, Rs.5 per share on allotment and the balance in two calls of Rs.7.50 each. The company received application for 11,600 shares. Applications for 1,000 Shares were rejected and application money was refunded the applicants. A person who applied for 1,000 shares was allotted only 400 shares and excess of application money was carried forward towards the payment of allotment and calls. Give Journal entries to record the above issue of shares and show how it will be shown in the Balance Sheet.
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Question 14.
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Question 15.
Sony Media Ltd. issued 50,000 share of Rs.10 each payable Rs.3 on application, Rs.3 on allotment and balance on first and final call. Applications were received for 1, 00,000 shares and allotment was made as follow:
1. Applicants for 60,000 shares were allotted 30,000 shares.
2. Applicants for 40,000 shares were allotted 20,000 shares.
Anupam, to whom 1,000 shares were allotted from category (I), failed to pay the allotment money. Pass Journal entries up to allotment.
Solution:
Question 16.
The Kalyan Cotton Mills Ltd. was registered on 1st January, 2011 with a capital of Rs.10,00,000 divided into 1, 00,000 shares of Rs.10 each. The company issued 42,000 shares of which 40,000 shares were taken up the public and Rs.1 per share was received with application. On 1st February, these shares were allotment and Rs.2 per share was duly received on 28th February as allotment money. A first call of Rs.3 per share w made on 1st March and the call money on all shares with the exception of 100 shares was received. The final call of Rs.4 per share was made on 1st June and the amount due, with the exception of 400 shares, was received by 30th June. Pass necessary Journal and Cash Book entries and prepare the Balance Sheet as at 30th June, 2011.
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Question 17.
Shiva Ltd. issued 1,00,000 Equity Shares of Rs.10 each at a premium of Rs.5 per share. The whole amount, was payable on application. The issue was fully subscribed. Pass necessary Journal entries.
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Question 18.
X Ltd. invited applications for 11,000 Equity Shares of Rs.10 each issued at 20% premium. The whole, amount was payable on application. The issue was undersubscribed by 1,000 shares. Pass necessary Journal entries.
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Question 19.
A limited company offered for subscription 10,000 shares of Rs.25 each, payable Rs.5 per share on application, Rs.10 per share on allotment (including Rs.5 per share as premium), Rs.5 per share as first call on the shares and the balance in two equal amounts at intervals of three months. All the shares were applied for and allotted. All the money was received except the second call and final call moneys on 200 and 400 shares respectively.
You are asked to show the entries in the company’s Journal, Cash Book and the Ledger. Also show the company’s Balance Sheet on completion of the above transactions.
Solution:
Question 20.
X Ltd. was incorporated with a capital of Rs.2,00,000 divided into shares of Rs.10 each. 2,000 shares were offered to the public and out of these, 1,800 shares were applied for and allotted. Rs.3 per share (including 1 premium) was payable on application, Rs.4 per share (including Rs.1 premium) on allotment, Rs.2 per share on first call and Rs.3 per share on final call. All the money was received. Give necessary Journal entries and the Balance Sheet.
Solution:
Question 21.
Authorised capital of Suhani Ltd. is Rs.45, 00,000 divided into 30,000 shares of Rs.150 each. Out of these company issued 15,000 shares of Rs.150 each at a premium of Rs.10 per share. The amount was payable as follows:
Rs.50 per share on application, Rs.40 per share on allotment (including premium), Rs.30 per share on first call and balance on final call. Public applied for 14,000 shares. All the money was duly received.
Prepare an extract of Balance Sheet of Suhani Ltd. as per Revised Schedule VI, Part-1 of the Companies Act, 1956 (Now Schedule III, Part I of the Companies Act, 2013) disclosing the above information. Also prepare ‘Notes to Accounts’ for the same.
Solution:
Question 22.
ABC Ltd. was floated with a capital of Rs.3,00,000 divided into shares of Rs.10 each. It offered 4,000 shares at Rs.12 each, payable Rs.2 per share on application, Rs.5 per share (including premium) on allotment, Rs.3 per share on first call and Rs.2 per share on final call. Applications were received for 6,000 shares. Applicants for 2,000 shares were sent letters of regret and application money was refunded. All the money due on shares was received.
Give necessary Journal entries and the Balance Sheet.
Solution:
Question 23.
X company issued Rs.10, 00,000 new capital divided into shares of Rs.100 each at a premium of Rs.20 per share payable as:
Rs.10 per share on application,
Rs.40 per share and Rs.10 premium on allotment and
Rs.50 per share and Rs.10 premium on final payment.
Over-payments on application were to be applied towards amount due on allotment and over-payments on application exceeding amount due on allotment was to be returned. Issue was oversubscribed to the extent of 13,000 shares. Applicants for 12,000 shares were allotted only 1,000 shares and applicants for 2,000 shares were sent letters of regret. All the money due on allotment and final call was duly received.
Pass necessary entries in the company’s books to record the above transactions.
Solution:
Question 24.
Ghosh Ltd. made the second and final call on its 50,000 Equity Shares @ Rs.2 per share o 1st January, 2016. The entire amount was received on 15th January, 2016 except on 100 shares allotted to Venkat. Pass necessary Journal entries for the call money due and received by opening Calls-in-Arrears Account.
Solution:
Question 25.
A Ltd. was registered with a capital of 5,00,000 in shares of Rs.10 each and issued 20,000 such shares at a premium of Rs.2 per share, payable as Rs.2 per share on application, Rs.5 per share on allotment (including premium) and Rs.2 per share on first call made three months later. All the money payable on application and allotment was duly received but when the first call was made, one shareholder paid the entire balance on his holding of 300 shares and another shareholder holding 1,000 shares failed to pay the first call money.
Give Journal entries to record the above transactions and show how they will appear in the company’s Balance Sheet.
Solution:
Question 26.
XYZ Ltd. issued 8,000 Equity Shares of Rs.10 each. Rs.5 per share was called, payable Rs.2 on application, Rs.1 on allotment, Rs.1 on first call and Rs.1 on second call. All the money was duly received with the following exceptions:
A who holds 250 shares paid nothing after application.
B who holds 500 shares paid nothing after allotment.
C who holds 1,250 shares paid nothing after first call.
Prepare Journal and the Balance Sheet.
Solution:
Question 27.
Bharat Ltd. made the first call of Rs.2 per share on its 1,00,000 Equity Shares on 1st March, 2006. Ashok, shareholder, holding 800 shares paid the second and final call amount along with the first call money. The second and final call amount was Rs.3 per share. Pass necessary Journal entries for recording to above using the Calls-in-Advance Account.
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Question 28.
2,000 Equity Shares of Rs.10 each were issued to X Limited from whom assets of Rs.25,000 were acquired Pass Journal entry.
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Question 29.
A limited company issued 800 Equity Shares of Rs.100 each at a premium of 25% as fully paid-up consideration of the purchase of plant and machinery worth 1,00,000.
Pass entries in company’s Journal.
Solution:
Question 30.
Rajan Ltd. purchased assets from Geeta and Co. for Rs.5,00,000. A sum of Rs.1,00,000 was paid by means of a bank draft and for the balance due Rajan Ltd. issued Equity Shares of Rs.10 each at a premium of 25%.
Journalise the above transactions in the books of the company
Solution:
Question 31.
Z Ltd. purchased furniture costing Rs.2,20,000 from CD Ltd. The payment was to be made by issue of 9% Preference Shares of Rs.100 each at a premium of Rs.10 per share. Pass necessary Journal entries in the books of Z Ltd
Solution:
Question 32.
Goodluck Ltd. purchased machinery costing Rs.10,00,000 from Fair Deals Ltd. The company paid the price by issue of Equity Shares of Rs.10 each at a premium of 25%. Pass necessary Journal entries for the above transactions in the books of Goodluck Ltd.
Solution:
Question 33.
Jain Ltd. purchased machinery costing Rs.10,00,000 from Ayer Ltd. 50% of the payment was made by cheque and for the remaining 50%, the company issued Equity Shares of Rs.100 each at a premium of 25%. Pass necessary Journal entries in the books of Jain Ltd. for the above transactions.
Solution:
Question 34.
Sona Ltd. purchased machinery costing Rs.17,00,000 from Mona Ltd. Sona Ltd. paid 20% of the amount by cheque and for the balance amount issued Equity Shares of Rs.100 each at a premium of 25%.
Pass necessary Journal entries for the above transactions in the books of Sona Ltd. Show your working notes clearly.
Solution:
Question 35.
Light Lamps Ltd. issued 50,000 shares of Rs.10 each as fully paid-up to the promoters for their services to set-up the company. It also issued 2,000 shares of Rs.10 each credited as fully paid-up to the underwriters of shares for their services. Journalise these transactions.
Solution:
Question 36.
Apollo Television Co. Ltd. issued 5,000 Equity shares of Rs.10 each credited as fully paid-up to the underwriters for their underwriting services. Pass necessary Journal entries in the books of the company.
Solution:
Question 37.
Better Prospect Ltd. acquired land costing 1,00,000 and in payment allotted 1,000 Equity Shares of Rs.100 each as fully paid. Further, the company issued 4,000 Equity Shares to public. The shares were payable as: Rs.30 on application; Rs.30 on allotment; Rs.40 on first and final call. Public applied for all shares which were allotted. All the money was received except the call on 200 shares.
Give Journal entries and the Balance Sheet of the company.
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Question 38.
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Question 39.
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Question 40.
Z Ltd. issued 20,000 Equity Shares of Rs.10 each at par payable: On application Rs.2 per share; on allotment Rs.3 per share; on first call Rs.3 per share; on second and final call Rs.2 per share.
Mr. Gupta was allotted 100 shares. Pass necessary Journal entry relating to the forfeiture of shares in each of the following alternative cases:
Case I If Mr. Gupta failed to pay the allotment money and his shares were forfeited.
Case II If Mr. Gupta failed to pay allotment money and on his subsequent failure to pay the first call, his shares were forfeited.
Case III If Mr. Gupta failed to pay the first call and on his subsequent failure to pay the second and final call, his shares were forfeited.
Solution:
Question 41.
A Co. Ltd. was registered with a nominal capital of Rs.1,00,000 in Equity Shares of Rs.10 each. It offered to the public 6,000 shares for subscription, The applications were, however, received for 8,000 shares. The Directors had to reject the applications for 1,000 shares and to return the money received thereon. The application money received on the other 1,000 shares was adjusted to Allotment Account. The amount payable on shares was: Rs.2 per share on application, Rs.4 per share on allotment and the balance on first call. One shareholder holding 100 shares failed to pay the first call money and as a result his shares were forfeited,
Pass necessary Journal entries and prepare Cash Book to record the abovetransactions.
Solution:
Question 42.
Solution:
Question 43.
U.P. Sugar Works Ltd. was registered on 1st January. 2004 with an authorised capital of Rs.15,00,000 divided into 15,000 shares of Rs.100 each. The company went for allotment on 1st April, 2004, when 5,000 shares of Rs.100 each were allotted at a premium of Rs.5 per share payable Rs.25 per share on application, Rs.30 (including premium) on allotment and the balance in two equal Installments of Rs.25 each on 1st July and 1st October respectively. All the allotment and call moneys were paid when due, except in case of one shareholder who failed to pay the final call on 100 shares held by him. His shares were forfeited on 1st November after giving him a due notice. Show necessary entries in the books of the company to record these transactions.
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Question 44.
A company issued 10,000 Equity Shares of Rs.10 each at a premium of Rs.3 per share payable Rs.5 on application, Rs.5 (including premium) on allotment and the balance on first call. All the shares offered were applied for and allotted. All the money due on allotment was received except on 200 shares. Call was made. All the amount due thereon was received except on 300 shares. Directors forfeited 200 shares on which both allotment and call money were not received.
Pass necessary Journal entries to record the above.
Solution:
Question 45.
A company issued 10,000 shares of the value of Rs.10 each, payable Rs.3 on application, Rs.3 on allotment and Rs.4 on the first and final call. All amounts are duly received except the call money on 100 shares. These shares are subsequently forfeited by Directors and are resold as fully paid-up for Rs.500.
Give necessary Journal entries for the transactions.
Solution:
Question 46.
X Ltd. forfeited 900 Equity Shares of Rs.100 each for the non-payment of allotment money of Rs.30 per share and the first call of Rs.20 per share. The second and final call of Rs.25 per share has not been made. The forfeited shares were reissued for Rs.90 per share, Rs.75 paid-up.
Journalise the above.
Solution:
Question 47.
The Directors of M Ltd. resolved on 1st May, 2015 that 2,000 Equity Shares of Rs.10 each, Rs.7.50 paid be forfeited for non-payment of final call of Rs.2.50. 0n 10th June, 2015. 1,800 of these shares were reissued for Rs.6 per share. Give necessary Journal entries.
Solution:
Question 48.
Solution:
Question 49.
A company issued 20,000 shares of Rs.100 each payable Rs.25 per share on application, Rs.25 per share on allotment and the balance in two calls of Rs.25 each. The company did not make the final call of Rs.25 per share. All the money was duly received with the exception of the amount due on the first call on 400 shares held by Mr. Modi. The Board of Directors forfeited these shares and subsequently reissued them @ Rs.75 per share paid-up for a sum of Rs.28,000. Joumalise the above transactions and prepare Share Capital Account.
Solution:
Question 50.
The Hindustan Manufacturing Ltd. had a total subscribed capital of Rs.10,00,000 in Equity Shares of Rs.10 each of which Rs.7.50 were called-up. A final call of Rs.2.50 was made and all amount paid except two calls of Rs.2.50 each in respect of 100 shares held by D. These shares were forfeited and reissued at Rs.8 per share. Pass necessary Journal entries (including that of cash) to record the transactions of final call, forfeiture of shares and reissue of forfeited shares. Also, prepare the Balance Sheet of the company.
Solution:
Question 51.
On 1st May, 2014, Directors of a Limited Company forfeited 200 shares of Rs.20 each, Rs.15 per share called-up. on which Rs.10 per share has been paid by A, the amount of the first call of Rs.5 per share being unpaid. Ten days later, the Directors reissued the forfeited shares to B credited as Rs.15 per share paid-up, for a payment of Rs.10 per share.
Give Journal entries in the company’s books to record the forfeited shares and their reissue.
Solution:
Question 52.
X Ltd. forfeited 100 shares of Rs.10 each (Rs.8 called-up) Issued at a premium of Rs.2 per share to Mr. R, on which he had paid application money of Rs.5 per share, for non-payment of allotment money of Rs.5 per share (including premium). Out of these, 70 shares were reissued to Mr.Sanjay as Rs.8 called-up for Rs.7 per share. Give necessary Journal entries relating to forfeiture and reissue of shares
Solution:
Question 53.
A Limited Company forfeited 100 Equity Shares of the face value of Rs.10 each, Rs.6 per share called-up, for non-payment of first call of Rs.2 per share. The forfeited shares were subsequently reissued as fully paid – up Rs.7 each.
Give necessary entries in the company’s Journal.
Solution:
Question 54.
Solution:
Question 55.
Give necessary Journal entries:
1. The Directors of Devendra Ltd. resolved on 1st January, 2010 that 100 Equity Shares of Rs.10 each, Rs.8 paid-up be forfeited for non-payment of final call of Rs.2. On 1st February, 60 of these shares were reissued @ Rs.7 per share as fully paid-up.
2. Virender Limited forfeited 20 shares of Rs.100 each (Rs.60 called-up) Issued at par to Mukesh on which he had paid Rs.20 per share. Out of these. 15 shares were reissued to Sanjeev as Rs.60 paid-up for Rs.45 per share
Solution:
Question 56.
A holds 100 shares of Rs.10 each on which he has paid Rs.1 per share on application.
B holds 200 shares of Rs.10 each on which he has paid Rs.1 and Rs.2 per share on application and allotment respectively.
C holds 300 shares of Rs.10 each and has paid Rs.1 on application, Rs.2 on allotment and Rs.3 on first call. They all fail to pay their arrears and the second call of 2 per share. Shares are forfeited and subsequently reissued Rs.11per share as fully paid-up.
Journalise the above.
Solution:
Question 57.
Solution:
Question 58.
A Ltd. company with registered capital of Rs.5,00,000 in shares of Rs.10 each issued 20,000 of such shares payable Rs.2 on application, Rs.4 on allotment, Rs.2 on first call and Rs.2 on final call. All the money payable on allotment was duly received but on the first call being made, one shareholder paid the entire balance on his holding of 300 shares and five shareholders with a total holding of 1,000 shares failed to pay their dues on the first call. These shares were forfeited for non-payment of first call money. Final call was made and all the money due was received. Later on, forfeited shares were reissued @Rs.6 per share as fully paid-up.
Record the above in the company’s Journal and prepare the Balance Sheet.
Solution:
Question 59.
Solution:
Question 60.
X Ltd. issued 10,000 Equity Shares of Rs.10 each, payable Rs.3 on application, Rs.3 on allotment and the balance on two calls. All the calls were duly made and the amount so realised with the exception of the following:
Mr. A holding 100 shares did not pay the amount due on first and final call and
Mr. B holding 100 shares did not pay the amount due on final call.
All the shares were forfeited and reissued only 150 shares (all of A and balance of B) to Mr. D @Rs.8 per share. Show the forfeiture and reissue entries.
Solution:
Question 61.
X Ltd. invited applications for 10,000 Equity Shares of Rs.10 each for public subscription. The amount of these shares was payable as:
On application Rs.1 per share, on allotment Rs.2 per share, on first call Rs.3 per share and on second call Rs.4 per share.
All sums payable on application, allotment and calls were duly received with the following exceptions:
A, who held 200 shares, failed to pay the money on allotment and calls.
B, to whom 150 shares were allotted, failed to pay the money on first call and final call.
C, who held 50 shares, did not pay the amount of final call.
The shares of A, B and C were forfeited and were subsequently reissued for cash as fully paid-up at a discount of 5%.
Give necessary Journal entries to record these transactions in the books of X Ltd.
Solution:
Question 62.
A share of Rs.100 issued at a premium of Rs.10 on which Rs.80 (including premium) was called and Rs.60 (including premium) was paid, has been forfeited. This share was afterwards reissued as fully paid-up for Rs.70. Give Journal entries to record the above.
Solution:
Question 63.
The Directors of a company forfeited 300 shares of Rs.10 each issued at a premium of 3 per share, for the non-payment of the first call money of Rs.2 per share. The final call of Rs.2 per share has not been made. Half the forfeited shares were reissued at Rs.1,500 as fully paid-up. Record the Journal entries for the forfeiture and reissue of shares.
Solution:
Question 64.
JCV Ltd. forfeited 200 shares of Rs.10 each issued at a premium of Rs.2 per share for the non-payment of allotment money of Rs.3 per share (including premium). The first and final call of Rs.4 per share has not been made as yet. 50% of the forfeited shares were reissued at Rs.8 per share as fully paid-up. Pass necessary Journal entries for the forfeiture and reissue of shares.
Solution:
Question 65.
Pass necessary Journal entries in the books of the company for the following transactions:
Vishesh Ltd. forfeited 1,000 Equity Shares of Rs.10 each issued at a premium of Rs.2 per share for non-payment of allotment money of Rs.5 per share including premium. The final call of Rs.2 per share was not yet called on these shares. Of the forfeited shares 800 shares were reissued at Rs.12 per share as fully paid-up. The remaining shares were reissued at Rs.11 per share fully paid-up
Solution:
Question 66.
A Ltd. has authorised capital of Rs.2,00,000. divided into shares of Rs.20 each, the whole of which is issued and subscribed at a premium of Rs.2 per share. The amount was payable as:
On application and allotment Rs.12 per share (Including premium) and on first call Rs.2 per share, the balance as and when required.
The application and allotment money (including premium) was duly received but a shareholder holding 500 shares failed to pay the first call and his shares were forfeited. They were later reissued fort Rs.16 per Share as fully paid-up.
Give Journal entries for the above
Solution:
Question 67.
Solution:
Question 68.
Jiyaji Ltd. has an authorised capital of Rs.4,00,000 divided into shares of Rs.20 each. The whole of which is issued and subscribed at a premium of Rs.2 per share. The amount was payable as:
on application and allotment Rs.10 per share, on first call Rs.4 per share (Including premium) and the balance as and when required.
The company made both the calls. The application and allotment money was duly received. But a shareholder holding 2,000 shares failed to pay both the calls and his shares were forfeited. They were later reissued @ Rs.14 per share as fully paid-up.
Give Journal entries regarding the above.
Solution:
Question 69.
A Ltd. Issued 20,000 Equity Shares of Rs.10 each at a premium of Rs.5 per share, payable as Rs.7 (including premium) on application, Rs.5 on allotment and the balance after three months of allotment.
A shareholder to whom 200 shares were allotted failed to pay the allotment and call money and his shares were forfeited. 160 of the forfeited shares were reissued for Rs.1,600.
Give necessary entries in company’s Journal and the Balance Sheet.
Solution:
Question 70.
Solution:
Question 71.
Krishna and Co. Ltd. with an authorised capital of Rs.2,00,000 divided into 20,000 Equity Shares of Rs.10 each, issues the entire amount of the shares payable as:
Rs.5 on application (including premium Rs.2 per share),
Rs.4 on allotment and Rs.3 on call.
All share money is received in full with the exception of the allotment on 200 shares and the call money on 500 shares (including the 200 shares on which the allotment money has not been paid).
The above 500 shares are duly forfeited and 400 of these (including the 200 shares on which allotment money has not been paid) are reissued at Rs.7 per share payable by the purchaser as fully paid-up. Pass Journal entries (including cash transactions) and show the balances in the Balance Sheet giving effect to the above transactions.
Solution:
Question 72.
Rolga Ltd. is having an authorised capital of Rs.50,00,000 divided into equity shares of Rs.100 each. The company offered 42,000 shares to the public. The amount payable was as follows:
——-On Application – Rs.30 per share
——-On Allotment – Rs.40 per share (including premium)
——-On First and Final Call – Rs.50 per share
Applications were received for 40,000 shares.
All sums were duly received except the following:
Lal, a holder of 100 shares did not pay allotment and call money.
Pal, a holder of 200 shares did not pay call money.
The company forfeited the shares of Lal and Pal. Subsequently, the forfeited shares were reissued for Rs.70 per share as fully paid-up. Show the entries for the above transactions in the Cash Book and Journal of the company.
Solution:
Question 73.
Gupta Ltd. invited applications for issuing 30,000 Equity Shares of Rs.10 each at a premium of Rs.30 per share. The amount was payable as follows:
——–On Application Rs.10 per share (including Rs.8 Premium)
——–On Allotment t 12 per share (including Rs.9 Premium)
——–On First and Final Call – Balance
Applications for 27,000 shares were received. All the calls were made and were duly received except on 3,000 shares held by Shiva who failed to pay the Allotment and First and Final call money and on 2,000 shares of Girdhar who did not pay the First and Final call. Shares of Shiva and Girdhar were forfeited. Out of the forfeited shares, 4.000 shares were reissued, including all the shares of Girdhar at Rs.17 per share as fully paid-up.
Pass necessary Journal entries in the books of Gupta Ltd. for the above transactions
Solution:
Question 74.
Pass Journal entries in the following cases;
M Ltd. forfeited 200 Equity Shares of Rs.10 each, issued at a premium of Rs. 5 per share, held by Ram for non-payment of the final call of Rs.3 per share. Of these, 100 shares were reissued to Vishu at a discount of Rs.4 per share.
Solution:
Question 75.
Show the forfeiture and reissue entries under each of the following cases:
X Ltd. forfeited 300 shares of Rs.10 each, Rs.8 called-up held by Mr. A for non-payment of second call money of Rs.3 per share. These shares were reissued to Mr. Z for Rs.10 per share as fully paid-up.
Y Ltd. forfeited 400 shares of Rs.10 each, fully called-up, held by Mr. B for non-payment of final call money of Rs.4 per share. These shares were reissued to Mr. T at Rs.12 per share as fully paid-up,
Z Ltd. forfeited 250 shares of Rs.10 each, fully called-up, held by Mr. C for non-payment of allotment money of Rs.3 per share and first and final call money of Rs.4 per share. These shares were reissued @ Rs.8 per share to Mr. P
Solution:
Question 76.
a. X Ltd. forfeited 30 shares of Rs.10 each fully called-up, held by Karim for non-payment of allotment money of Rs.3 per share and final call of Rs.4 per share. He had paid the application money of Rs.3 per share. These shares were reissued to Salim fort 8 per share.
b. X Ltd. forfeited 20 shares of Rs.10 each, Rs.7 called-up on which Mahesh had paid application and allotment money of Rs.5 per share. Of these. 15 shares were reissued to Naresh as fully paid-up for Rs.6 per share.
Solution:
Question 77.
VT Ltd. forfeited 200 shares of Rs.10 each, issued at a premium of Rs.5 per share, held by Mohan for non-payment of the final call of Rs.3 per share. 100 out of these shares were reissued to Narender at a discount of Rs.4 per share. Journalise
Solution:
Question 78.
XYZ Ltd. forfeited 200 Equity Shares of Rs.10 each Issued at a premium of Rs.5 per share, held by Shyam for non-payment of allotment money of Rs.8 per share (including share premium Rs.5 per share), first call of Rs.2 per share and final call of Rs.3 per share. Out of these, 125 Equity Shares were reissued to Bhajanlal Rs.9 per share as fully paid-up.
Give the Journal entries to record forfeiture and reissue of shares.
Solution:
Question 79.
Record the Journal entries for forfeiture and reissue of shares in the following cases:
i. X Ltd. forfeited 20 shares of Rs.10 each, Rs.7 called up on which the shareholder had paid application and allotment money of Rs. 5 per share. Out of these, 15 shares were reissued to Naresh as Rs.7 per share paid-up for Rs.8 per share.
ii. Y Ltd. forfeited 90 shares of Rs.10 each, Rs.8 called up issued at a premium of Rs.2 per share to “R” for non-payment of allotment money of Rs.5 per share (including premium). Out of these, 80 shares were reissued to Sanjay as Rs.8 called up for Rs.10 per share.
Solution:
Question 80.
Alfa Ltd. invited applications for issuing 75,000 equity shares of Rs.10 each. The amount was payable as follows:
——-On application and allotment – Rs.4 per share
——-On first call – Rs.3 per share.
——-On second and final call – balance.
Applications for 1,00,000 shares were received. Shares were allotted to all the applicants on pro rata basis and excess money received with applications was transferred towards sums due on first call. Vibha who was allotted 750 shares failed to pay the first call. Her shares were immediately forfeited. Afterwards the second call was made. The amount due on second call was also received except on 1,000 shares, applied by Monika. Her shares were also forfeited. All the forfeited shares were reissued to Mohit for Rs.9,000 as fully paid – up. Pass necessary Journal entries in the Books of Alfa Ltd. for the above transactions
Solution:
Question 81.
Tata Ltd. having an authorised capital of Rs.20.00,000 in shares of Rs.100 each Invited applications for 10,000 shares payable as:
——-On application Rs.20
——-On allotment Rs.30
——-On first call Rs.25
——-On second and final call Rs.25
The company received applications for 12,000 shares. Applications for 10,000 shares were accepted in full and the money on the applications rejected was returned.
All money due as stated above was received with the exception of the second and final call on 250 shares. These shares were forfeited and half of these shares were reissued as fully paid-up at Rs.90 per share.
Pass necessary Journal entries and show how the Share Capital Account will stand in the Balance Sheet.
Solution:
Question 82.
H Limited issued a prospectus inviting applications for 20,000 shares of Rs.10 each at a premium of Rs.2 per share payable as follows:
On application Rs.2; on allotment Rs.5 {including premium); on first call Rs.3; on second and final call Rs.2.
Applications were received for 30,000 shares and pro row allotment was made on the applications for 24,000 shares. Money overpaid on applications was adjusted against amount due on allotment.
Ramesh, to whom 400 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay first call his shares were forfeited. Mohan, the holder of 600 shares, failed to pay two calls and his shares were forfeited after the second call.
Of the shares forfeited, 800 shares were sold to Krishna credited as fully paid-up for Rs.9 per share, the whole of Ramesh’s shares being included.
Pass Journal entries and prepare the Balance Sheet.
Solution:
Question 83.
The Dogra had an Authorised Capital of 10,00,000 divided into Equity Shares of Rs.100 each. The Company offered 84,000 shares to the public at premium
The amount was payable as follow;
——-On ApplIcation – Rs.30 per share
——-On Allotment – Rs.40 per share (Including premium)
——-On First and Final Call – Rs.50 per share.
Applications were received for 80,000 shares.
All sums were duly received except the following:
——-Lakhan, a holder of 200 shares did not pay allotment and call money.
——-Paras, a holder of 400 shares did not pay call money.
The company, forfeited the shares of Lakhan and Paras. Subsequently, the forfeited shares were reissued for Rs.80 per share as fully paid.up. Show the entries for the above transactions in the Cash Book and Journal of the company.
Solution:
Question 84.
Jeevan Dhara Ltd. invited applications for issuing 1, 20,000 equity shares of Rs.10 each at a premium of Rs.2 per share. The amount was payable as follows:
——-On application – Rs.2 per share.
——-On allotment- Rs.5 per share (Including premium)
——-On first And final – balance
Applications for 1, 50,000 shares were received. Shares were allotted to all the applicants on pro rata basis. Excess money received on applications was adjusted towards sums due on allotment. All calls were made. Manu who had applied for 3,000 shares failed to pay the amount due on allotment and first and final call. Madhur who was allotted 2,400 shares failed to pay the first and final call. Shares of both Manu and Madhur were forfeited. The forfeited shares were reissued at Rs.9 per share as fully paid up. Pass necessary
Journal entries for the above transactions in the books of Jeevan Dhara Ltd.
Solution:
Question 85.
D Ltd. offered to the public 20,000 Equity Shares of Rs.10 each payable Rs.4 on application. Rs.2 on allotment, Rs.2 on first call and the balance on final call. Applications totalled for 35,000 shares. Applications for 10,000 shares were rejected. Those totaling 15,000 shares were allotted 10,000 shares and the remaining applications were accepted in full. Excess application money was utilised towards the money due on allotment. Both the calls were made. One shareholder holding 500 shares failed to pay the two calls and as a consequence his shares were forfeited. 200 of these shares were reissued as fully paid-up for as Rs.6 per share.
Record the above in the company’s Journal and Cash Book and prepare the Balance Sheet.
Solution:
Question 86.
A Co. Ltd. offered to the public 20,000 Equity Shares of Rs.100 each at a premium of Rs.10 per share. The payment was to be as:
——-On application Rs.20
——-On allotment Rs.40 (including premium)
——-On first call Rs.25
——-On second and final call Rs.25
Applications were received for 35.000 shares. Applications for 10,000 shares were rejected. Applicants for 15,000 shares were allotted 10,000 shares and remaining applications were accepted in full. The Directors made both the calls. One shareholder holding 500 shares failed to pay the two calls and as a consequence his shares were forfeited. 200 of these shares were reissued as fully paid-up at Rs.80 per share.
Prepare Cash Book, Journal and the Balance Sheet on the basis of information given above.
Solution:
Question 87.
Veer Ltd. invited applications for issuing 1,00,000 Equity Shares of Rs.500 each at a premium of Rs.100 per share. The amount was payable as:
——-On application – Rs.200 per share
——-On allotment – Rs.300 per share (Including premium)
——-On first and final call- balance of the amount
Applications for 2,00,000 shares were received. Applications for 50,000 shares were rejected and the application money was refunded. Pro rata allotment was made to the remaining applicants. Amount overpaid with application was adjusted towards sums due on allotment. All calls were made and were duly received except the first and final call on 100 shares allotted to Vasu. These shares were forfeited. The forfeited shares were reissued to Ravi for Rs.60000 as fully paid-up.
Pass necessary Journal entries in the books of the company for the above transactions.
Solution:
Question 88.
Raja Ltd. invited applications for issuing 50.000 Equity Shares of Rs.10 each. The amount was payable as follows:
——-On application – Rs.3 per share
——-On allotment – Rs.5 per share
——-On first and final call – the balance
Applications for 70,000 shares were received. Allotment was made to all applicants on pro-rata basis. Excess money received on application was adjusted towards sums due on allotment. Ramesh, who had applied for 700 shares, did not pay the allotment money and on his failure to pay the allotment money his shares were forfeited. Afterwards, the first and final call was made Adhar, who had been allotted 500 shares, did not pay the first and final call. His shares were also forfeited. Out of the forfeited shares 900 shares were reissued at Rs.8 per share as fully paid-up. The reissued shares included all the shares of Ramesh.
Pass necessary Journal entries for the above transactions in the books of the company.
Solution:
Question 89.
XYZ Ltd. has been registered with an authorised capital of Rs.2,00,000 divided into 2,000 shares of Rs.100 each of which, 1,000 shares were offered for public subscription at a premium of Rs.5 per share, payable as On application – Rs.10
——-On allotment – Rs.25 (including premium)
——-On first call – Rs.40
——-On final call – Rs.30
Applications were received for 1.800 shares, of which applications for 300 shares were rejected outright: the rest of the applications were allotted 1,000 shares on pro rata basis. Excess application money was transferred to allotment.
All the money was duly received except from Sundae holder of 100 shares, who failed to pay allotment and first call money. His shares were later forfeited and reissued to Shyam at Rs.60 per share Rs.70 paid up. final call has not been made.
Pass necessary Journal entries and prepare Cash Book in the books of XYZ Limited.
Solution:
Question 90.
Bhamashah company Limited made an issue of 1,00,000 Equity Share of Rs.10 each at a premium of 20% payable as follows:
——-On application – Rs.2.50 per share,
——-On allotment – Rs.4.50 per share, and
——-On 1st and final call – balance.
Applications were received for 2,00,000 Equity Shares and the Directors made pro rota allotment. Ranu who had applied for 800 shares did not pay the allotment and final call money; as a result his shares were forfeited. Later on 80% of the forfeited shares wore reissued at Rs.8 per Mare as fully paid – up.
Pass necessary Journal entries for the above mentioned transactions in the books of the company
Solution:
Question 91.
A company issued for public subscription 50,000 Equity Shares of Rs.10 each at a premium of Rs.2 per share, payable as under.
——-On application – Rs.2 per share
——-On allotment – Rs.5 per share
——-On first call – Rs.2 per share
——-On final call – Rs.3 per share
Applications were received for 75,000 Equity Shares. The shares were allotted on pro rata basis to the applicants for 60,000 shares, the remaining applications being rejected. Money overpaid on applications was utilised towards sum due on allotment
A, to whom 2,000 shares were allotted, failed to pay allotment and calls money and B, to whom 2,500 shares were allotted, failed to pay the two calls. These shares were, subsequently, forfeited after the final call was math. All the forfeited shares were reissued to X as fully paid-up @Rs.8 per share.
Pass Journal entries to record the above transactions
Solution:
Question 92.
Applications were invited by the Directors of X Ltd. for 15,000 of its Equity Shares of Rs.100 and at Rs.115 per share payable as:
a. On application on 1st April, 2013 (including premium of Rs.15 per share) Rs.75;
b. On allotment on 30th April. 2013 Rs.20 and
c. On first and final call on 31st May, 2013 Rs.20.
Applications were received for 18,000 shares and it was decided to deal with these as:
i. to refuse allotment to applicants for 800 shares,
ii. to give full allotment to applicants for 2,200 shares,
iii. to allot the remainder of the available shares on pro rota basis among the other applicants and
iv. to utilise the surplus received on applications in part payment of amounts due on allotment.
An applicant, to whom 400 shares had been allotted, failed to pay the amount due on the first and final call and his shares were declared forfeited on 31st July. 2013. These shares were reissued on 3rd September, 2013, as fully paid-up @ Rs.90 per share. Pass Journal entries to record the above issue of shares.
Solution:
Question 93.
XYZ Ltd. invited applications for issuing 50,000 Equity Shares of Rs.10 each. The amount was payable as:
——-On application – Rs.3 per share
——-On allotment – Rs.4 per share
——-On first and final call – Rs.3 per share
Applications were received for 75,000 shares and pro rata allotment was made as:
Applicants for 40,000 shares were allotted 30,000 shares on pro rata basis.
Applicants for 35,000 shares were allotted 20.000 shares on pro rata basis.
Ramu, to whom 1,200 shares were allotted out of the group applying for 40,000 shares, failed to pay the allotment money. His shares were forfeited immediately after allotment.
Shamu, who had applied for 700 shares out of the group applying for 35.000 shares, failed to pay the first and final call. HIS shares were also forfeited. Out of the forfeited shares, 1,000 shares were reissued @ Rs.8 per share as fully paidup. The reissued shares included all the forfeited shares of Shamu.
Pass necessary Journal entries to record the above transactions.
Solution:
Question 94.
A company issued for public subscription 40,000 Equity Shares of Rs.10 each at a premium of Rs.2 per share payable as:
——-On application – Rs.2 per share
——-On allotment – Rs.5 per share (including premium)
——-On first call – Rs.2 per share
——-On second call – Rs.3 per share
Applications were received for 60,000 shares. Allotment was made on pro rata basis to the applicants for 48.000 shares, the remaining applications being refused. Money overpaid on application was utilised towards sums due on allotment. Ram to whom 1.600 shares were allotted failed to pay the allotment money and Shyam to whom 2,000 shares were allotted failed to pay the two calls. These shares were subsequently forfeited after the second call was made. All the forfeited shares were reissued as fully paid-up @ Rs.8 per share. Give necessary Journal entries for the above transactions.
Solution:
Question 95.
X Ltd. issued a prospectus inviting applications for 50,000 Equity Shares of Rs.10 each. payable Rs.5 as per application (including Rs.2 as premium), Rs.4 as per allotment and the balance towards first and final call. Applications were received for 65,000 shares. Application money received on 5,000 shares was refunded with letter of regret and allotments were made on pro rota basis to the applicants of 60,000 shares. Money overpaid on applications including premium was adjusted on account of sums due on allotment. Mr. Sharma to whom 700 shares were allotted failed to pay the allotment money and his shares were forfeited by the Directors on his subsequent failure to pay the call money.
All the forfeited shares were subsequently sold to Mr. Jain credited as fully paid-up for Rs.9 per share.
You are required to set out the Journal entries and the relevant entries in the Cash Book.
Solution:
Question 96.
Super Star Ltd. issued a prospectus inviting applications for 2.000 shares of Rs.10 each at a premium of Rs.2 per share, payable as:
——-On application- Rs.3 (Including Rs.1 premium)
——-On allotment Rs.4 (including Rs.1 premium)
——-On first call Rs.3
——-On second and final call – Rs.2
Applications were received for 3,000 shares and pro ram allotment was made on the applications for 2.400 shares. It was decided to utilise excess application money towards the amount due on allotment. Ramesh, to whom 40 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited.
Rajesh, who applied for 72 shares failed to pay the two calls and on such failure, his shares were forfeited. Of the shares forfeited, 80 shares were sold to Krishan credited as fully paid-up for Rs.9 per share, the whole of Ramesh’s shares being included.
Give Journal entries to record the above transactions (including cash transactions)
Solution:
Question 97.
Bharat Ltd. invited applications for issuing 2,00,000 Equity Shares off Rs.10 each. The amount was payable as. On application Rs.3 per share. on allotment Rs.5 per share and on first and final call Rs.2 per share. Applications for 3,00,000 shares were received and promo allotment was made to all the applications on the following basis:
Applicants for 2,00,000 shares were allotted 1,50,000 shares on pro rota basis.
Applicants for 1,00,000 shares were allotted 50,000 shares on pro rota basis.
Bajaj, who was allotted 3,000 shares out of group applying for 2,00,000 shares failed to pay the allotment money. His shares were forfeited immediately after allotment. Sharma, who had applied for 2,000 shares out of the group applying for 1,00,000 shares failed to pay the first and final call. His shares werealso forfeited, Out of the forfeited shares 3,500 shares were reissued as fully paid-up @ Rs.8 per share. The reissued shares included all the forfeited shares of Bajaj.
Give necessary Journal entries to record the above transactions
Solution:
Question 98.
Bharat Tyres Ltd. invited applications for 1,00,000 Equity Shares of Rs.10 each issued at a premium of Rs.4 per share. The amount was payable as:
——–On application – Rs.6 (including premium Rs.2)
——–On allotment – Rs.6 (including premium Rs.2)
——–Balance on first and final call
Applications for 1,50,000 shares were received. Allotment was made to all the applicants on pro rata basis. Subodh, to whom 200 shares were allotted, failed to pay allotment and call money. Vikram, to whom 100 shares were allotted, failed to pay the call money. Their shares were forfeited and afterwards reissued @ Rs.8 per share as fully paid-up.
Pass necessary Journal entries
Solution:
Question 99.
Amrit Ltd. issued 50,000 shares of Rs.10 each at a premium of Rs.2 per share payable as Rs.3 on application, Rs.4 on allotment (including premium), Rs.2 on first call and the remaining on second call. Applications were received for 75,000 shares and a pro rata allotment was made to all the applicants. All moneys due were received except allotment and first call from Sonu who applied for 1,200 shares. All his shares were forfeited. The forfeited shares were reissued fort 9,600. Final call was not made. Pass necessary journal entries.
Solution:
Question 100.
The Directors of Super Star Ltd. invited applications for 2,00,000 Equity Shares of Rs.10 each to be issued at 20% premium. The money payable per shares was: on application Rs.5, on allotment Rs.4 (including premium of Rs.2), first call Rs.2 and final call Rs.1.
Applications were received for 2,40,000 shares and allotment was made as:
to applicants for 1,00,000 shares – in full,
to applicants for 80,000 shares-60,000 shares,
to applicants for 60,000 shares-40,000 shares.
Applicants of 1,000 shares falling in Category (i) and applicants of 1,200 shares falling in Category (ii) failed to pay allotment money. These shares were forfeited en failure to pay first call. Holders of 1,200 shares falling in Category (iii) failed to pay the first and final call and these shares were forfeited after final call.
1,300 shares 1,000 of Category (i) and 300 of Category (iii) were reissued at Rs.8 per share as fully paid-up. Journalise the above transactions. Prepare Cash Book and Balance Sheet.
Solution:
Question 101.
XYZ Ltd. issued a prospectus inviting applications for 2.000 shares of Rs.10 each at a premium of Rs.4 per share, payable as:
——–On application – Rs. 6 (including Rs.1 premium)
——–On allotment – Rs.2 (including Rs.1 premium)
——–On first call Rs.3 (including Rs.1 premium)
——–On second and final call Rs.3 (including Rs.1 premium)
Applications were received for 3,000 shares and pro rata allotment was made on the applications for 2,400 shares. It was decided to utilise excess application money towards the amount due on allotment. X, to whom 40 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited. Y, who applied for 72 shares failed to pay the two calls and on his such failure, his shares were forfeited.
Of the shares forfeited, 80 shares were sold to Z credited as fully paid-up for Rs.9 per share, the whole of Ys shares being included.
Prepare Journal. Cash Book and the Balance Sheet.
Solution:
Question 102.
ABC Ltd. has 100 employees. On 1st April, 2016, the company entered into an agreement with the employees whereby each employee was granted 100 options subject to their completing 3 years of continuous service. The fair value of the share as on 1st April. 2016 was Rs.100 and it was agreed that it shall be offered at Rs.70. It was also agreed that an employee could exercise the option within three months of meeting the terms of the agreement.
You are to determine the following:
Grant Date;
Vesting Period;
Vesting Date;
Exercise Period;
Exercise Date;
Exercise Price; and
Value of Option
Solution:
Question 103.
DEF Ltd has 200 employees. On 1st April, 2016 the company entered Into an agreement with employees and agreed to grant 50 options each on the condition that they complete 3 years of continuous service. Naresh joined the company on 1st July. 2016. Determine whether he will be eligible to exercise option on 31st March. 2019. Give reasons.
Solution:
The company entered into an agreement with its employees on April 01, 2016. The vesting period in this question is three years. Naresh who joined the company on July 01, 2016, will be eligible to exercise the option on june 30, 2019 (after three years of service from the date of joining). Therefore on March 31,2019, he is not eligible to exercise the options because he has not completed three years of service
Question 104.
XYZ Ltd. has 300 employees. The company entered Into an agreement with its employees on 1st April 2014 and granted options to subscibe Rs.75 options each on completion of 3 years of service. Ashish resigned from the company on 30th September, 2016. Will he be eligible to subscribe the options? Give reasons.
Solution:
The company entered into an agreement with its employees on April 01, 2014. The vesting period in this question is three years. Ashish, who resigned on September 30, 2016. Is not eligible to exercise the options because he did not complete three years of service.
Question 105.
Blue Lagoon Ltd. granted options to its 200 employees to subscribe 200 equity shares of Rs.10 each after 4 years from the grant date. Fair (Market) value of each share is Rs.110 whereas the offer price (exercise price) is Rs.80. All the 200 employees exercised the option paying Rs.80 per share by the exercise date. Pass necessary Journal entries.
Solution:
Question 106.
Black Gold Ltd. granted options to its 300 employees to subscribe 300 equity shares of Rs.10 each after 3 years from the grant date. Fair (Market) value of each share Is Rs.25 and the offer (exercise) price is Rs.15. All the employees except 50 exercised the option by the exercise date. Pass necessary Journal entries.
Solution:
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