COMPANY ISSUANCE OF SHARES

01. ACCOUNTING FOR COMPANIES (2005 Regular)

The following transactions related to KHAN & CO. LTD:

(i) The Company received application for 200,000 ordinary shares of Rs.10 each. Allotment
Letters were issued for 150,000 shares and the Excess subscription amount was refunded.
(ii) The promoters paid Rs.20,000 for printing of Memorandum of Association of the Company.
(iii) A Computer was acquired by issuing 4,000 Ordinary shares of Rs.10 each fully paid up.
The market price per share was Rs.18.
(iv) Declared a Cash Dividend of Rs.200,000 and Stock Dividend of Rs.300,000.
(v) Created Reserve for Debenture Redemption in the amount of Rs.15,000.
(vi) Issued 5,000 Debentures of Rs.100 each at Rs.90 redeemable after 7 years.
(vii) The Bank reported that the amount of Dividend paid was Rs.150,000 and the unclaimed
Dividend was Rs.50,000.
(viii) The Company issued 3,000 12% 5 years Debentures of Rs.100 at par redeemable after
5 years at Rs.105.
Required: Give Journal entries in Proper form for the above transactions.

02. ACCOUNTING OF COMPANIES (2005 Private)

CHUHAN & Co. Ltd. was registered with a capital of Rs.20,000,000 ordinary shares of
Rs.10 each. It was incorporated by acquiring the running business of Yasir, a sole trader. The
balance sheet of the business of Yasir as of January 01,2005 was as under:

ASSESTS EQUITIES
Cash Rs. 40,000 Account Payable 40,000
Account Receivable Rs. 120,000 Notes Payable 40,000
Merchandise Inventory Rs. 160,000 Allowance for bed debts 8,000
Office Supplies Rs. 8,000 Accum. Depreciation 240,000
Furniture Rs. 400,000 Yasir’ Capital 400,000
_________ __________
728,000 728,000

CHUHAN & Co. Ltd. took over the business assets other than cash and assumed the
liabilities . In exchange, the Company issued 30,000 shares of Rs.10 each at Rs. 15 per
share. The Company also made an additional issue of 10,000 shares of Rs.10 each at Rs.15
per share to the public which were subscribed and paid for.
Required : (i) Give the necessary entries in the General Journal of CHUHAN & Company.
(ii) Prepare Initial Balance Sheet.

03. ACCOUNTING FOR CAMPANIES (2004 REGULAR)

The following transactions related to Salman Co. Ltd.

1. The Company offered 50000 Shares of Rs.10 each at Rs.15/= The Company received
applications for 65000 Shares. The Company finalized the allotment and the excess money
was refunded.
2. The Company declared stock dividend of Rs.100,000/=. The Company issued 9,000 Shares
of Rs.10/= each in settlement of Stock dividend.
3. The Company purchased land worth Rs.500,000/= and issued 45,000 Shares of Rs.10/= each
to the vendors.
4. The Company purchased machine and in consideration thereof issued 16000 Shares of
Rs.10/= each. The market price of the Share was Rs.12.50/=.
5. The Company issued 2000 debentures of Rs.100/= each at par, repayable after five years at
5% redemption premium.
6. The Company issued 1000 debentures of Rs.100/= each at 95/=, repayable after five years at
at Rs.105/=.
Required: Record the above transactions in the General Journal of the Company.
 04. ACCOUNTING FOR COMPANIES : 2004 (External)
Nishat Co. Ltd. made the following issuance of shares and debentures.
(i) The company issued 60,000 ordinary shares of Rs.10/- each at Rs.12/- per share to public.
Application were received for 70000 shares. 60000 shares were allotted and the excess
money was refundable.
(ii) Land was acquired by issuing 40000 ordinary shares of Rs.10/= each. The market price per
share was Rs. 15/=.
(iii) The Promoters of the Company were allotted 6000 ordinary shares of Rs. 10/= in
consideration of their services rendered.
(iv) Mortgage payable of Rs.60,000/= was settled by the issue of Ordinary shares of Rs.10/=
each. The market value of the share was Rs.15/=.
(v) Received Rs.95,000/= against the issue of 1000 10% debenture of Rs.100/= each
redeemable at par after 5 years.
Required : Record the above transactions in the General Journal of the Company.

05. ACCOUNTING FOR COMPANIES 2003 (Regular / Private)

The Shares –issue transactions of Safeer Co. Ltd for the year ended on 30th Spet., 2003
a) The Company issued for Cash 400,000 shares of Rs.10/- each at Rs.13/- each.
b) The Promoters were allotted 10,000 shares of Rs. 10/- each for services.
c) The Company bought Equipment costing Rs.100,000/- Rs.10/- shares were Issued in
exchange. The market value per share was Rs.12.50.
d) For Land purchased worth Rs.750,000/- , 80,000 shares of Rs.10/- each were issued.
e) Declared Dividend 25% on the shares issued above.
f) Paid the dividend through Bank.
Required : i) Journalize the above transactions.
ii) Prepare initial Balance Sheet of the Company.

06. COMPANY ACCOUNTING 2002(REGULAR / EXTRENAL)

Given : AL-AZAM LTD. entered into the following transactions:
(1) Issued 50,000 ordinary shares of Rs.10 par at Rs.12 each for cash.
(2) Issued 10,000 ordinary shares of Rs.10 in acquisition of Machinery Costing RS.120,000.
(3) Declared Cash Dividend Rs. 150,000 and Stock Dividend of Rs.200,000 R.E account is
having sufficient balance.
(4) The Bank reported that the cash dividend in the amount of Rs.30,000 was unclaimed.
(5) Issued 17,500 ordinary shares of Rs.10 in settlement of Stock Dividend.
(6) Issued to Directors 15,000 shares of Rs.10 each in recognition of their services rendered
to the Company.
(7) Issued 1,000 Debentures of Rs.100 each at Rs.110 payable after 5 years at Rs.120.
Required: Give the necessary Journal entries to record the above transactions in Proper form.

07. COMPANY ACCOUNTING (2001 REGULAR / EXTERNAL)

Given : The following transaction relate to BHUTTO LIMITED.
(a) Received applications for 100,000 ordinary shares of Rs.10 each. Issued allotment letters
for 80,000 shares and refunded the excess application money.
(b) Issued 6,000 ordinary shares of Rs.10 each at a market price of Rs.12 per share of
acquiring land.
(c) Issued ordinary shares of Rs.10 each at a premium of Rs.2 per share, in settlement of
bonds payable of Rs.60,000.
(d) Declared cash dividend of Rs.30,000 and stock dividend of Rs.50,000.
(e) Appropriated Rs. 15,000 for contingencies.
(f) Issued dividend warrants in payment of cash dividend of Rs.30,000.
(g) Issued ordinary shares of Rs. 10 each in payment of stock dividend of Rs.50,000.
(h) Recorded unclaimed dividend of Rs.5,000 as per bank statement.
Required : Give general journal entries for the above transactions.
08. ACCOUNTING FOR COMPANIES (2000 Regular / Private)
GIVEN : The Share holders , equity section of Balance sheet of Wasim Ltd. As on
June 30, 2000 was as under:-
Authorized Capital (200,000 shares of Rs.10 par) 2000,000

Paid up Capital 90,000 Shares of Rs.10 par ………………………… 900,000

Premium on shares ………………………………………………….. 180,000
Retained Earnings …………………………………………………… 520,000
Reserve for Building Extension …………………………………….. 150,000
During the quarter ended September 30, the Company performed the
following transactions in addition to normal business;
i) The Company received application along with application money for 80,000 shares in
response to the issue of 100,000 shares of RS.10 par at Rs. 15/= to the public. The
Board of directors finalized the allotment by allotting 80,000 Shares to the Public and
20,000 shares to the under writers.
ii) Closed the reserve for building extension account as the purpose is over.
iii) A Computer Costing Rs.90,000 was acquired by allotting 7,000 shares of Rs.10/- par.
iv) Purchased a Fax machine for Rs.75,000 by allotting Shares at the price of Rs. 12.50
share as quoted at the Stock exchange.
v) Issued 5,000 – 10% 5 years bonds of Rs. 100 par for cash to be redeemed at Rs.110
at maturity.
vi) Created a reserve for redemption of bonds by Rs.40,000.
vii) Declared Interim stock dividend of Rs.150,000 and Cash dividend of Rs. 200,000.
viii) Allotted Shares of Rs. 10 par at a premium of Rs.5 per share it settlement of the
Stock dividend.
Required: (i) Record the above transactions in General Journal.
(ii)Prepare a partial Balance Sheet reporting the above facts.

09. COMPANY – ISSUANCE OF SHARES AND DEBENTURES : (1999 Regular / Private)

GIVEN : Karim Company Ltd. Completed the following transactions:
(1) The Company issued 70,000 Shares of Rs.10 each at Rs.12 but received applications for
80,000 shares. The Company finalized the allotment and refunded the excess amount.
(2) The company purchased a running business and acquired the following assets and liabilities.
Merchandise Inventory Rs. 15,000, Office equipment Rs.50,000, Machinery Rs.40,000,
Account Payable Rs.5,000. Purchase consideration of the above business was paid by issuance
of 9000 shares of Rs.10 each fully paid up.
(3) Purchased a machine worth Rs.200,000 and in consideration issued Shares of Rs.10 each.
Each share had a market value of Rs. 12.50.
(4) Purchased office equipment and in consideration issue 10,000 shares of Rs. 10 each, the market
value of the share was Rs.13.
(5) Issued 2000 10% debenture of Rs.100 each at Rs.95 redeemable after fine years at Rs.105.
(6) The company declared stock dividend Rs.50,000 and issue 4500 Shares of Rs.10 each.
Required : Give Journal Entries in proper form of the above transactions on the books of
Karim Company Ltd.

10. ISSUE OF SHARE & DEBENTURES (1998 Regular)

(1) 45,000 Shares of Rs. 10 each were issued and subscribed at Rs.9/= per share.
(2) The Company allotted Shares of Rs. 10 each in consideration of Stock Dividend payable
Rs. 78,000. The market value of the Share was Rs. 13.
(3) Directors of the Company allotted shares to the promoters in consideration of their services
values Rs.45,000 , the market value of shares Rs.15/=
(4) Issued 40,000 shares of Rs.10 each for the purchase of a machine costing Rs. 360,000.
(5) Declared Cash dividend of Rs. 150,000.
(6) The Bank reported the amount of dividend paid Rs.130,000 and unclaimed dividend
Rs.20,000.
Required: Give entries to record the above transactions giving necessary explanation.
11. ISSUE OF SAHRES AND DEBENTURES 1998 (Private)
MAND CORPORATION completed the following transaction for the month of January, 1998.
January 1, Purchased Land for Rs.1,00,000 and in consideration issued Shares of Rs.10 each.
The market price of Share was Rs.12.50.
January 5, Purchased Machinery and issued 12,500 shares of Rs.10 each. The market price of
Share was Rs.12.00.
January 10, The Corporation allotted 20,000 Shares of Rs.10 each to the Promoter in consideration
of Services rendered.
January 20, The Corporation issued 9,000 Shares of Rs.10 each in full settlement of
Bonds payable Rs.100,000.
January 25, Issued 2,000 debentures of Rs.100 each redeemable after five years at Rs.105.
January 30, Issued 1,000 debentures of Rs.100 each at Rs.95 redeemable after five years.
January 31, Paid Preliminary Expenses Rs.10,000.
Required : Give Dated Entries in the GENERAL JOURNAL with Narration to record the above
transactions.

12. ACCOUNTING FOR COMPANIES 1997 (Regular)

(a) BILAL LIMITED (Registered with a capital of Rs.5,000,000 divided into Rs.10 share)
made an issue of its shares during the year 1996 as under:
1. 15,000 shares to the Promoters for the services rendered.
2. 20,000 shares for purchase of Machinery (Market value of Share being Rs.15/-)
3. Offered 365,000 shares to the Public at 20% PREMIUM. Applications (along with applications
money) received for 400,000 shares. The Company allotted the shares and refunded the excess
money trough bank.
Required : JOURNALISE the above transactions of issue.
(b) IQBAL AZIZ LTD. Received Rs.900,000 against the issue of 10,000 5% DEBENTURES
Of Rs. 100 each , redeemable at PAR after 5 years.
Required : Record the above issue into Company’s Journal.
(c) The Expense and Income Summary of SARFRAZ CO. LTD. For the year ended on
31st December,1996 showed a Credit balance of 1,880,000 transferred to the
RETAINED EARNING ACCOUNT . The Directors decided.
(1) To pay a Cash Dividend of 15% (on 100,000 Shares of Rs.50/- each).
(2) Rs. 100,000 to be transferred to General Revenue.
(3) To Appropriate Rs.250,000 and Rs. 170,000 for Plant Expansion and Building Extension
respectively.
Required : Pass Journal Entries for the above Appropriation as well as Net Income’s
transfer to Retained Earnings.

13. CORPORATION – ISSUANCE OF SHARES : (1997 Private)

DEWAN CO. LTD. Was incorporated on January3, 1996, with an authorized capital
Of Rs.50,00,000 dividend into 500,000 ordinary shares of Rs.10 each. The following information
are available to you.
Data
10-1-96 : The formation expense of Rs.50,000 were paid by the promoters.
15-1-96: The following shares were issued and fully subscribed at par:
30,000 shares to (NIT)
20,000 shares to the company employees.
50,000 to the general public.
16-6-96: The Company entered into an agreement with M / s. ZULFI INDUSTRIES to takeover
its assets and liabilities at the following values.
Equipment ……………. Rs. 150,000 Building ………………. Rs. 220,000
Furniture and Fixture Rs.40,000, Accounts Payable Rs. 10,000. In exchange 30,000
ordinary shares of Rs.10 each were issued and fully subscribed.
31-12-96 The Company received cash Rs. 107,722 in exchange of Rs.5 years, 12% Bond’s
liability worth Rs. 100,000.
31-12-96 Under writer’s commission of Rs.14,500 is outstanding against the company.
Required : Prepare dated general entries from the above transactions in the book of Dewan Co. Ltd.
14. CORPORATE FINANCE STATEMENT : (1997 Private)
Take the date given in question No.8 above.
Required : Prepare a Balance Sheet of M / s DEWAN COMPANY LTD. as on
December 31, 1996.

15. ACCOUNTING FOR COMPANIES : (1996 Regular)

a) Siddique Company Ltd. is registered with an authorized capital of Rs. 1,000,00 divided into
ordinary shares of Rs.10 each. The Company issued its shares as under.
i) The company offered the public 50,000 shares at par Applications for 40,000 shares were
received as per agreement the underwriters subscribed for the balance
of their shares. The directors finalized the allotment of 40,000 shares to the public and 10,000
shares to the underwriters. The company paid 2% underwriting Commission on shares
subscribed to them.
ii) The company purchased a machine costing Rs. 72,000 and issued sufficient shares. The shares
had a market value of Rs.8/= each.
iii) The company allotted necessary shares in consideration of Stock Dividend Rs.50,000. The
shares had a market value of Rs.12.50.
iv) The company issued 1,000 shares in exchange for services rendered to the company. The stock
holders agreed that these services were worth Rs.15,000.
Required : Record the above transactions in the General Journal of the Company.
b)(i) Aamir Company issued 10,000 -15% Debenture payable of Rs.10 each at market price
Rs.9/= each redeemable after 5 years at Rs.12/= each.
(ii) The company created reserves for Plant extension for Rs.20,000.
Required : Record entries in the General Journal of the Company .

16. ACCOUNTING FOR COMPANIES :

Waheed Company Limited issued Ordinary Shares of Rs.10 each during 1995:
i) 10,000 shares for purchase of Machine (Market price of shares was Rs.12)
ii) 4,000 shares at par to the promoters for services rendered.
iii) Offered 90,000 shares to the public at a premium of Rs.2. Application money received for
120,000 shares. The company allotted the shares and refunded the excess money.
iv) Issued 5,000 shares at par for the redemption of 20% Debentures Payable.
v) The Company acquired the following assets from a firm:
Merchandise Rs.20,000 , Equipment Rs.120,000 and Furniture Rs.60,000.
Purchase consideration was paid by issuing 25,000 shares of Rs.10 each as fully paid up.

17. ACCOUNTING FOR COMPANIES (1995 Regular)

GIVEN : NAJEEB & COMPANY LTD. made the following issuance.
i) The Company allotted 35,000 ordinary shares of Rs.10 each in consideration of acquiring the
Assets and Liabilities of a running Business. The agreed value of assets and liabilities acquired
is as follows:
Account Receivable Rs.70,000, Furniture Rs.40,000, Building Rs.230,000, Machinery Rs.100,000
and Accounts Payable Rs.50,000.
ii) The Company allotted 8,500 ordinary shares of Rs.10 each in full settlement of Debenture payable
of Rs.90,000.
iii) The Company allotted ordinary shares of Rs.10 each in consideration of Stock Dividend of
Rs.60,000. The shares had a market value of Rs.12 per share.
iv) The promoters of the Company were allotted 15,000 ordinary shares of Rs.10 each in consideration
of the services rendered to the Company.
v) Purchased Equipment by issuing 6,000 ordinary shares of Rs.10 each. The market value of the
share was Rs.14 per share.
vi) Received cash Rs.110,000 by issue of 12,000 10% Debentures of Rs.10 each redeemable after
5 year’s at Rs. 13 each.
Required: Record the above transactions in the General Journal of the Company.

18. COMPANY 1995 (Private)

(a) Heer Company Ltd. registered with a share capital of Rs.1000,000 dividend into ordinary
shares of Rs.10 each, offered to the public 50,000 shares at Rs.12 per share. Applications
were received for 80,000 shares. 50,000 shares were allotted and the excess application money
was refunded. Preliminary expenses of Rs.20,000 were paid.
Required : (i) General Journal entries for the above transactions.
(ii) Prepare initial balance sheet.

(b) Ranjha Ltd. declared cash dividend of Rs.100,000 and stock dividend of Rs.200,000.
Cash dividend was paid in full and 20,000 ordinary shares were issued in payment of
Stock dividend.
Required : Give General Journal entries for declarations and payment of dividends.

19. FINANCIAL STATEMENT 1994

Moon Company Ltd. is registered with an authorized capital of Rs.30,000,00 divided into
ordinary shares of Rs.10 each. The company’s books showed the following balances on
December 31, 1993, the end of the accounting year before the closing process.
Debit Balance :
Cash in bank Rs.16,000 , Account Receivable Rs.52,000, Merchandise Inventory(1-1-93) Rs.10,400
Machinery Cost Rs.11,20,000, Purchased Rs.3,60,000, Transportation in Rs.36,000,
Salaries Expense Rs.44,000, Rent Expense Rs.34,800. Auditor’s fee expense Rs. 4000,
Director’s fee expense Rs. 5,000 (Total Rs. 16,82200)
Credit Balance :
Accounts Payable Rs. 46,000, Allowance for Depreciation –Machinery Rs.1,36,000.
Allowance for bad debts Rs.4,000 . 10% Bonds payable Rs.2,78,800 paid up capital Rs.7,60,000
Sales Revenue Rs.3,60,000, Retained earning Rs.97,400(Total Rs.16,82,200)
Data for adjustment on December 31, 1993:
i) Rent payable Rs. 12,00.
ii) Merchandise Inventory was valued on December 31, 1993 at Rs.1,70,000.
iii) Provide allowance for depreciation on machinery for the year Rs.30,000.
iv) Allowance for bad debts Rs.5,000 for the year.
v) Appropriate Rs.16,000 for plant extension and Rs.36,000 for contingencies.
Required : (1) Prepare Income Statement for the year ended December,31, 1993 and also a
Statement of Retained Earning.
(2) Prepare Balance Sheet as of December 31, 1993 in classified form.

20. ACCOUNTING FOR COMPANIES 1993 (Regular)

Usman & Co. Ltd. was registered with a capital of Rs.20,00,000 divided into 200,000
Ordinary shares of Rs.10 each. It started functioning by acquiring the business of Saleem a
Sole Trader. The Balance Sheet of the business of Saleem as of the purchase was as under:

ASSETS EQUITIES
Cash 20,000 Accounts Payable 20,000
Account Receivable 60,000
Less: Allowance Notes Payable 20,000
for bad debts 4,000
______
56,000 Saleem Capital 200,000
Merchandise Inventory 80,000
Office Supplies 4,000
Equipment 200,000
Less: Allowance
for dep. 120,000
________

80,000
_______ ________
240,000 240,000

USMAN Co. Ltd. takes over the business assets other than Cash and ASSUMES THE LIABILITIES.
In exchange, the Company issue 15000 shares of Rs.10 each as fully paid. The company also made an
Additional issue of 20,000 shares of Rs.10 each at Rs.12 per share to the public which were fully
Subscribed and paid for :
 The Company also paid for preliminary expenses amounting to Rs.30,000.
(i) Give entries in the General Journal of Usman Co.Ltd.
(ii) Prepare Balance Sheet of Usman Co. Ltd.

21. ACCOUNTING FOR COMPANIES 1993 (Private)

(a) Islamia Corporation was authorized to issue 50,000 ordinary shares of Rs.5 par value. The
following transactions occurred during the year ended December 31, 1992.
January 1. Issued 20,000 ordinary shares of Rs.20 per share.
January 5. Issued 500 ordinary shares in exchange for services in organizing the corporation. The
stock holders agreed that these services were worth Rs.12,000.
January 14. Acquired land and in exchange issued 12,000 ordinary share. In view of the appraised value
of the land and the progress of the Company, the directors agreed that the common
Stock was to be valued for purposes of this transactions at Rs.25 per shares.
November 10. The first annual dividend of Rs.10 per shares was declared on the ordinary share to be
Paid on 25th December,1992. December 20 Paid the cash dividend on November10,1992.

(b) MECO CORPORATION issued 1,000 7% debenture of Rs.100 each at Rs.90 redeemable after
5 years at Rs.110 each.

22. ACCOUNTING FOR COMPANIES 1992 (Regular)

HABIB LTD. was incorporated with a capital of Rs.15,00,000 divided into 1,50,000
Ordinary shares of Rs.10 each.
(i) It offered to the public 70,000 shares at par. Application for 60,000 shares were received.
As per agreement the underwriters subscribed for the balance of their shares. The
directors finalized the allotment of 60,000 shares to the public and 10,000 shares to
underwriters.
(ii) Purchased Furniture and in consideration issued and 5000 ordinary shares of Rs.10
each. Each share has a market value of Rs.12.
(iii) Received Rs.180,000 against the issue of 20,000 ordinary debentures of Rs.10 each
redeemable after 5 years at Rs.12 each .
(iv) Paid Rs.15,000 preliminary expense.
Required : Record the above Transactions in the General Journal of the Company.

23. ACCOUNTING FOR COMPANIES 1992 (Private)

GIVEN : The Equities Section of GHANI LTD. at December 31, 1991 was under:-
Authorised Capital :
(2,00,000 shares of Rs.10 par) Rs. 20,00,000
Paid-up Capital :
(1,00,000 shares of Rs.10 par)……………………………………… 10,00,000
Premium on shares………………………………………………….. 1,50,000
Retained Earnings ………………………………………………….. 4, 50,000
Reserved for Asset Replacement …………………………………… 1,00,000
Stock Dividend to be Distributed…………………………………… 1,20,000
Dividend Payable …………………………………………………… 80,000
Accounts Payable ……………………………………………………. 50,000
Bonds Payable ………………………………………………………. 1,50,000
In the succeeding year, the Co. performed the following transactions, in addition to
routine business.
(1) The Dividend Payable was paid.
(2) 12,000 shares of Rs.10 par were allotted in settlement of the stock dividend.
(3) 10,000 shares of Rs.10 were allotted in full settlement of Bond Payable of Rs.1,50,000.
(4) The Reserve for Assets Replacement was disposed off because the assets was replaced.
(5) Created a Reserve for Contingencies in the amount of Rs.40,000.
(6) Purchased a machinery for Rs.75,000 by allotting sufficient number of shares of Rs.10
par at a premium of Rs.5 per share.
Required : (a) Record the above transactions in the general journal giving explanation below
each entry.
(b) Reproduce the Equities Section in proper form after incorporating the effects of
the above transactions.
24. ACCOUNTING FOR COMPANIES 1991
GIVEN : The following transactions related to YASER COMPANY , LTD.
(1) The company received applications for 120,000 Ordinary Shares of Rs.10 each.
Allotment letters were issued for 100,000 Shares and the amount of 20,000 Shares
was refunded.
(2) Land costing Rs.72,000 was acquired by issuing 6,000 Ordinary Shares of Rs.10 each.
(3) Office Equipment was acquired by issuing 14,000 ordinary shares of Rs.10 each
fully paid up. The Market Price per share was Rs.12.50.
(4) Issued 7,000 10% 5-years Debentures of Rs.100 each at Rs.105.
(5) Declared Cash Dividend of Rs.50,000 and Stock Dividend of Rs.150,000.
(6) Created Reserve for Contingencies for Rs.12,000.
Required : Record the above transactions in the General Journal. The General journal should
be in proper Form.

25. ACCOUNTING FOR COMPANIES 1990

The following are Independent situation relating Baber Co. Ltd. for the year 1989.
(a) The Promoters of the Company were allotted 10,000 Shares of Rs.10 each in consideration
of the service rendered to be company.
(b) The Co. allotted 50,000 shares of Rs.10 each at a premium of Rs.2 per share. All the
shares were fully subscribed in cash.
(c) The Co. purchased a computer costing Rs.100,000 and issued necessary shares of
Rs.10 each. The shares had market value of Rs.12.50 each.
(d) The Co. allotted shares of Rs.10 each in consideration of stock Dividend of Rs.75,000.
The shares had market value of Rs.15 each.
(e) The Co. allotted 5,000 shares of Rs.10 each in full settlement of Bonds payable of
Rs.55,000.
(f) The Co. purchased a running business acquiring the following assets from MILL WALA
SONS.
Land Rs. 200,000
Building Rs. 400,000
The company issued 55,000 shares of Rs.10 in full settlement.
Required : Record the above transaction in the GENERAL JOURNAL of the company.

26. ACCOUNTING FOR COMPANIES 1989

Adnan & Co. Ltd. was registered with capital of Rs.10,00,000 divided into 1,00,000
ordinary shares of Rs.10 each. It started functioning by acquiring the business of Neem and
of the date of purchases was as under:

ASSETS EQUITIES

Cash 10,000 Accounts Payable 20,000

Account Receivable 30,000
Less. Allowance for Naeem , Capital 100,000
Bad Debts 2,000
_______
28,000
Merchandise Inventory 40,000
Office Supplies 2,000
Equipment 100,000
Less. Allowance
for Dep. 60,000
________
40,000

_________ _________

120,000 120,000

Adnan & Co. takes over the business assets other than cash and assumes liabilities. In
Exchange the company issues 9,000 shares of Rs.10 each as fully paid. The company also made
An additional issue of 15,000 shares of Rs.10 each at Rs.12 per share to the public which were
Fully subscribed and paid for. The company also paid for preliminary expenses amounting
To Rs.10,000.
Required : (i) Give entries in the general –journal of Adnan & Co. Ltd.
(ii) Prepare Balance Sheet of Adnan & Co. Ltd.