Application of Shares

Q.

Q.

What does a Bearer Debenture mean?

Q. A company offered 30, 000 shares of ₹10 each, payable as ₹3 on application, ₹2 on allotment, and the balance on the first and final call. Applications were received for 50, 000 and allotment was made on a pro rata basis. The excess application money was to be adjusted on allotment. How much will be transferred from a share application account to a share allotment account?

[0.88 marks]

1. ₹60, 000
2. ₹3, 00, 000
3. ₹90, 000
4. ₹1, 50, 000

Q. Explain in brief the main categories in which the share capital of a company is divided.

Q.

What is the number of years purchase be taken, if a question is silent related to it?

Q.

It is that part of the issued capital which has been actually subscribed by the public. It is known as ___

1. Nominal capital

2. Authorised capital

3. Called up capital

4. Susbcribed capital

Q.

When the shares offered for public subscription are subscribed fully by the public, then ___

1. None of the above

2. Issued capital and subscribed capital would be the same

3. Authorised capital and subscribed capital would be the same

4. ssued capital and Called up capital would be the same

Q.

Naman Ltd issued 20, 000 shares of Rs 100 each, payable Rs 25 on application, Rs 30 on allotment , Rs 25 on first call and The balance on final call. All money duly received except Anubha, who holding 200 shares did not pay allotment and calls money and Kumkum, who holding 100 shares did not pay both the calls. The directors forfeited shares of Anubha and kumkum.

Give journal entries.

Q.

Mohit Glass Ltd. issued 20, 000 shares of Rs 100 each at Rs 110 per share, payable Rs 30 on application, Rs 40 on allotment (including Premium), Rs 20 on first call and Rs 20 on final call. The applications were received for 24, 000 shares and allotted 20, 000 shares and reject 4, 000 shares and amount returned thereon. The money was duly received.

Give journal entries.

Q. The first instalment which the appplicants have to pay along with the applications for shares is known as money.

1. allotment
2. call
3. application
4. prospectus

Q.

Mona Earth Mover Limited decided to issue 12, 000 shares of Rs.100 each payable at Rs.30 on application, Rs.40 on allotment, Rs.20 on first call and balance on second and final call. Applications were received for 13, 000 shares. How much amount shall be entered in share application account?

1. Rs. 3, 90, 000

2. Rs. 1, 30, 000

3. Rs. 5, 20, 000

4. None of these

Q.

Share application account shows the balance of ___________.

1. amount received on allotment

2. amount received on calls

3. amount received on application

4. none of these

Q.

The total amount for the share application is ___

1. None of the above

2. No. of Shares Allotted X amount called on allotment

3. No. of share allotted X application amount called

4. No. of Application X application amount per share

Q. Ravi Ltd. issued 50, 000 shares of ₹10 each payable as ₹2 on application, ₹3 on allotment, ₹2.5 on first call, and ₹2.5 on the second and final call. All the amount was duly received except for the second and final call on 800 shares. These shares were forfeited. Out of these, 600 shares were re-issued as fully paid up in such a way that ₹2, 100 were transferred to the capital reserve.
Calculate the re-issue price per share:

[2 marks]

1. ₹6
2. ₹4
3. 10
4. ₹2.5

Q. Ravi Ltd. issued 50, 000 shares of ₹10 each payable as ₹2 on application, ₹3 on allotment, ₹2.5 on first call, and ₹2.5 on the second and final call. All the amount was duly received except for the second and final call on 800 shares. These shares were forfeited. Out of these, 600 shares were re-issued as fully paid up in such a way that ₹2, 100 were transferred to the capital reserve.
Calculate the amount received on re-issue of shares:

[2 marks]

1. ₹3, 600
2. ₹6, 000
3. ₹2, 100
4. ₹2, 400

Q. The portion of the issued share capital that the public agrees to sign up, by way of paying the application money, is called the capital.

1. nominal
2. called-up
3. issued
4. subscribed

Q. The subscribed capital of a company was ₹40, 00, 000, and the nominal value of each share was ₹50. There were no calls-in-arrears till the final call was made, and the final call made was paid on 77, 500 shares only. The balance in the calls-in-arrears amounted to ₹31, 250. Calculate the final call on share.

[0.88 marks]

1. ₹12.5
2. ₹25
3. ₹50
4. ₹10

Q.

The first instalment which the appplicants have to pay along with the applications for shares is known as ___

1. Call Money

2. Application money

3. Prospectus money

4. None of the above

Q. Dividend declared by a company must be paid in ____________.

1. 30 days
2. 32 days
3. 20 days
4. 42 days

Q.

1. allotment
2. regret
3. enquiry
4. request

Q. Sometimes a combined account for share application and share allotment called __________ is opened in the books of a company.

1. Share Application Account
2. Share Application and Allotment Account
3. Share Allotment Account
4. Share Capital Account

Q. Question

Q. On 28 Feb. 2016 the first call of Rs 2 per share became due on 50, 000 shares. Kumar a holder of 1000 shares did not pay the first call money. Kovil a holder of 750 shares paid the entire amount of second and final call of Rs 4 per share along with the first call. Pass journal entries for the amount received by opening calls in arrears account and calls in advance account in the books of the company.

Q. Commission received A/c will have __________.

1. Nil
2. Debit balance
3. Credit balance
4. Debit or credit balance

Q. Modern Chemicals Co. Ltd. made an issue of 60, 000 shares of Rs. 20 each payable as follows:
On application Rs. 5 per share
On allotment Rs. 5 per share
On first call Rs. 4 per share
On second call Rs. 3 per share
The company received applications for 65, 000 shares of which applications for 5, 000 shares were rejected and money refunded.
All the same shareholders paid up to second call except one shareholder, Mr. Bhupendra, the allotee of 100 shares, who did not pay the amount of the second call.
Give Journal Entries in the books of Modern Chemicals Co. Ltd.

Q. The subscribed share capital of S Ltd. is Rs. 80, 00, 000 of Rs. 100 each. There were no calls in arrear till the final call was made. The final call made was paid on 77, 500 shares. The calls in arrear amounted to Rs. 62, 500. The final call per share will be ___________ .

1. Rs. 25
2. Rs. 7.80
3. Rs. 20
4. Rs. 62.50

Q. The total amount for the share application is the number of application divided by the application amount per share.

1. True
2. False

Q.

Prakash Engineering Company issued for public subscription 40, 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(including premium)

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 alloted pro-rata to the applicants of 60, 000 shares only, the remaining applications being rejected. Money overpaid on application was utilised towards the sum due on allotment. Ashok to whom 3, 000 shares were alloted failed to pay the allotment money and the two calls. Baneet who applied for 3, 000 shared paid the calls money along with allotment money. Pass the journal entries to record the above transactions.

Q. Select the most appropriate answer from the alternatives given below and rewrite the sentence :

Nominal value of shares allotted to the public is called _____________ capital.
a) authorised
b) reserve
c) paid up
d) subscribed

Q. Give one word / Term / phrase for each of the following statement :

The portion of subscribed capital which has not yet been called up.