Mittal Tutorial

Q.1 Kumar Ltd. purchased assets of Rs.6,30,000 from Bhanu Oil Ltd. Kumar Ltd. issued equity share
of Rs.100 each fully paid in consideration. What journal entries will be made, if the shares are issued, (a)
at par, (b) at discount of 10%, and (c) at premium of 20%.

Q.2. Bansal Heavy Machine Ltd. purchased machine worth Rs.3,20,000 from Handa Trader. Payment
was made as Rs.50,000 cash and remaining amount by issue of equity shares of the face value of Rs. 100
each fully paid at an issue price of Rs.90 each. Give journal entries to record the above transaction.

Q.3 Y ltd. Purchased furniture costing ₹ 1,65,000 from A.B. ltd. The payment was made by issue of
equity shares of ₹ 10 each at a premium of ₹ 1 per share. Pass necessary journal entries in the book of Y
ltd.

Q.4 Y ltd. Purchased furniture costing ₹ 2,20,000 from CD ltd. The payment was made by issue of
9% Preference shares of ₹ 100 each at a premium of ₹ 10 per share. Pass necessary journal entries in the
book of Z ltd.

Q.5 Jain ltd purchased building for ₹ 10,00,000 from Gupta ltd. 40% of the payable amount was paid
by cheque drawn in favour of Gupta ltd. The balance was paid by issue of Equity shares of ₹ 10 each at a
premium of 20%. Pass necessary journal entries in the books of Jain ltd.

Q.6 Suresh Ltd., on 1st April 2006 acquired assets of the value of Rs. 6,00,000 and liabilities worth
Rs. 70,000 from P & Co, at an agreed value of Rs. 5,50,000. Suresh Ltd. issued Equity shares of Rs. 100
each at a premium of 10% in full satisfaction of purchase consideration.

Q.7 Madhav ltd issued fully paid equity shares of ₹ 70 each at a premium of ₹ 5 per share for the
purchase of a running business from Gupta Bros. For a sum of ₹ 15,00,000. The assets and liabilities
consisted of the following ; plant 5,00,000; Trucks 7,00,000; stock 3,00,000; machinery 6,00,000 and
sundry creditors ₹ 5,00,000.
You are required to pass necessary journal entries for the above transactions in the books of
Madhav ltd.

Q.8 Pass necessary journal entries for the following transactions in the books of Rajan ltd:
a) Rajan ltd purchase machinery of ₹ 7,20,000 from kundan ltd. The payment was made to kundan
ltd by issue of equity shares of ₹ 100 each at 12% Preimum.
b) Rajan ltd purchased a running business from vikas ltd. For a sum of ₹ 2,50,000 payable as ₹
2,20,000 in fully paid equity shares of ₹ 10 each, and balance by a bank draft. The assets and
liabilities consisted of the following: plant and machinery ₹ 90,000, Building ₹ 90,000, Debtors ₹
30,000, Stock ₹ 50,000, Cash ₹ 20,000; sundry creditors ₹ 20,000.
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Q.9 Ansh Limited issued 30,000 equity shares of Rs.100 each payable at Rs.30 on application, Rs.50
on allotment and Rs.20 on Ist and final call. All money was duly received. Record these transactions in
the journal of the company.

Q.10 Ansh Limited issued 30,000 equity shares of Rs.100 each payable at Rs.30 on application, Rs.30
on allotment and Rs.20 on Ist and the balance on final call. All money was duly received. Record these
transactions in the journal.

Q.11 Mohan 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 rejected 4,000 shares and
amount returned thereon. The money was duly received. Give journal entries.

Q.12 Soft India Ltd. invited applications for 20,000 equity shares of Rs.100 each, payable Rs.40 on
application, Rs.30 on allotment and Rs.30 on call. The company received applications for 32,000 shares.
Application for 12,000 shares were rejected and money returned to applicants. All money due on
allotment and call was received. Prepare journal.

Q.13 Soft India Ltd. invited applications for 20,000 equity shares of Rs.100 each, payable Rs.40 on
application, Rs.30 on allotment and Rs.30 on call. The company received applications for 32,000 shares.
Application for 7000 shares were rejected and money returned to applicants. Applications for 25000
shares allotted 20000 shares and excess application money adjusted into allotment. All money due on
allotment and call was received.

Q.14 Soft India Ltd. invited applications for 20,000 equity shares of Rs.100 each, payable Rs.40 on
application, Rs.30 on allotment and Rs.30 on call. The company received applications for 32,000 shares.
Application for 2,000 shares were rejected and money returned to applicants. Applications for 10,000
shares were accepted in full and applicants for 20,000 shares allotted half of the number of shares applied
and excess application money adjusted into allotment. All money due on allotment and call was received.
Prepare journal and cash book.

Q.15 Rupak Ltd. issued 10,000 shares of Rs.100 each payable Rs.20 per share on application, Rs.30
per share on allotment and balance in two calls of Rs.25 per share. The application and allotment money
were duly received. On final call, all members paid their dues except one member holding 200 shares.
Give journal entries.

Q.16 S. Ltd was registered with an authorised capital of ₹ 4,00,000 divided into 40,000 equity shares of
₹ 10 each. The company offered to the public for subscription 30,000 equity shares. Applications for
28,000 equity shares were received and allotment was made to all the applicants. All calls were made and
were duly received except the final call of ₹ 2 per share on 200 shares. Prepare the balance sheet of the
company showing the different categories of share capital.
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Q.17 Soft India Ltd. invited applications for 20,000 equity shares of Rs.100 each, payable Rs.40 on
application, Rs.30 on allotment and Rs.30 on call. The company received applications for 32,000 shares.
Application for 7000 shares were rejected and money returned to applicants. Applications for 25000
shares allotted 20000 shares and excess application money adjusted into allotment. On allotment and final
call all members paid their dues except one member holding 200 shares. Give journal entries.

Q.18 On 28.2.2016 the first call of Rs 2 per share became due on 50,000 equity shares allotted by
Kumar Ltd. Kovil a holder of 750 shares paid the second and final call of Rs 4 per share along with the
first call. Pass the necessary journal entry in the books of the company.

Q.19 Rupak Ltd. issued 10,000 shares of Rs.100 each payable Rs.20 per share on application, Rs.30
per share on allotment and balance in two calls of Rs.25 per share. The application and allotment money
were duly received. On first call a member holding 500 shares paid for the balance due in full. Final call
was not made. Give journal entries.

Q.20 On 28.2.2016 the first call of Rs 2 per share became due on 50,000 equity shares alloted by
Kumar Ltd. Komal a holder of 1000 shares did not pay the first call money. Kovil a holder of 750 shares
paid the second and final call of Rs 4 per share alongwith the first call. Pass the necessary journal entry
for the amount received by opening calls - in – arrears and calls - in - advance account in the books of the
company.

Q.21 Rupak Ltd. issued 10,000 shares of Rs.100 each payable Rs.20 per share on application, Rs.30
per share on allotment and balance in two calls of Rs.25 per share. The application and allotment money
were duly received. On first call, all members paid their dues except one member holding 200 shares,
while another member holding 500 shares paid for the balance due in full. Final call was not made. Give
journal entries.

Q.22 Nirman ltd. Issued 50,000 Equity shares of ₹ 10 each. The amount was payable as follows: on
application ₹ 3 per share; on allotment ₹ 2 per share; on first and final call, the balance amount.
Applications for 45,000 shares were received and shares were allotted to all the applicants. Pooja to
whom 500 shares were allotted, paid her entire share money at the time of allotment, where Kundan did
not pay the first and final call on his 300 shares. What was the amount received at the time of making first
and final call?

Q.23 A company issued to the public for subscription 40,000 shares of ₹ 10 each at a premium of 10%
payable as Rs 2 each on applications, 4 on allotment (including premium) and balance on first & final call
5. Applications were received for 60,000 shares and allotment was made pro-rata to 80% of applicants. R
to whom 1,600 shares were allotted paid only the application money, and S who had applied for 2,400
shares paid the entire call money due along with the allotment. Pass necessary journal entries.
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Q.28 Money plus company issued for public subscription 75,000 shares of the value of ₹ 10 each at par
payable as follows: ₹ 2 per share on application, ₹ 3 per share on allotment and ₹ 50 per share on call. The
company received applications for 1,50,000 shares. The allotment was done as under:
a) Applicants of 15,000 shares were allotted 5,000 shares.
b) Applicants of 70,000 shares were allotted 40,000 shares.
c) Remaining applicants were allotted 30,000 shares.
Money in excess to allotment was returned. Hari, a Shareholder who had applied for 3,500 shares out of
group (B) failed to pay allotment and call money. Rohan a shareholder who was allotted 3,000 shares paid
the call money along with the allotment. Rohan also belonged to group b. Pass necessary journal entries.

Q.29 DN Ltd., issued 50,000 shares of Rs. 10 each at a discount of 10% payable as Rs. 2 per share on
application, Rs. 3 on allotment and Rs. 2 each on first and final call. Applications were received for
70,000 shares. It was decided that (a) refuse allotment to the applicants for 10,000 shares (b) allot 20,000
shares to Mohan who had applied for similar number and (c) allot the remaining shares on pro-rata basis.
Mohan failed to pay the allotment money and Sohan who belonged the category „c‟ and was allotted
3,0,00 shares paid both the calls with allotment. Calculate the amount received on allotment.

Q.30 Petromax ltd issued 50,000 shares of ₹ 10 each at premium of ₹ 2 per share payable as ₹ 3 on
application, 5 including premium on allotment and the balance in equal instalments over two calls.
Applications were received for 92,000 shares and the allotment was done as under:
 Applications of 40,000 shares 30,000 shares
 Applications of 40,000 shares 20,000 shares
 Applications of 12,000 shares Nil
Suresh who had applied for 2000 shares (category (A) did not pay money other than application money.
Chandar who was allotted 800 shares (category B) paid the call money due along with allotment. All
other allottees paid their dues as per schedule. Pass the necessary journal entries.

Q.31 A limited company offered for subscription of 1,00,000 equity shares of Rs.10 each at a premium
of Rs.2 per share, 2,00,000 10% Preference shares of Rs.10 each at par. The amount on share was payable
as under :

Particular Equity Shares Preference Shares

On Application Rs.3 per share Rs.3 per share
On Allotment Rs.5 per share Rs.4 per share
(including premium)
On First Call Rs.4 per share Rs.3 per share
All the shares were fully subscribed, called-up and paid. Record these transactions in the journal and cash
book of the company.
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Q.32 Z Ltd. forfeited 1,000 equity shares of Rs 10 each for the non-payment of the first call of Rs 2
per share. The final call of Rs 3 per share was yet to be made. Calculate the maximum amount of discount
at which these shares can be reissued.

Q.33 SSS ltd forfeited 1000 equity shares of ₹ 100 each for the non-payment of first call ₹ 20 per share
and second and final call of ₹ 25 per share. These shares were reissued at Rs. 50 per share fully paidup.

Q.34 Pragya Ltd. forfeited 8,000 equity shares of ₹100 each issued at a premium of 10% for non-
payment of first and final call of ₹30 per share. The maximum amount of discount at which these shares
can be reissued will be:
A. ₹80,000
B. ₹3,20,000
C. ₹5,60,000
D. ₹2,40,000.

Q.35 The directors of Axim Ltd. forfeited 20,000 equity shares of ₹10 each, ₹8 per share called up for
non-payment of first call of ₹2 per share. Final call of ₹2 per share has not been yet called. Half of the
forfeited shares were reissued as fully paid up for ₹15 per share. The amount transferred to Capital
Reserve will be:
A. ₹2,00,000 B. ₹1,20,000
C. ₹60,000 D. ₹40,000

Q.36 Recorded the journal entries for forfeiture and reissue of shares in the following cases:
(a) 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 re-issued to Naresh as
Rs. 7 per share paid up for Rs. 8 per share.
(b) 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
re-issued to Sanjay as Rs. 8 called up for Rs. 10 per share.
(c) Z ltd. forfeited 300 shares of Rs. 10 each issued at a premium of Rs. 1 per share for non-payment of
first and final call of Rs. 3 per share. Out of these 200 shares were reissued at Rs. 3 per share fully paid
up.
(d) Z ltd. forfeited 300 shares of Rs. 10 each issued at a premium of Rs. 1 per share for non-payment of
first and final call of Rs. 3 per share. Out of these 200 shares were reissued at Rs. 11 per share fully paid
up.

Q.37 Pass journal entries for the forfeiture and re-issue in the following cases:
(i) A ltd. Forfeited 100 shares of Rs. 10 each fully called-up for non-payment of first call of Rs. 3 per
share and final call of Rs. 3 per share. All of these shares were re-issued as fully paid for Rs. 10
per share.
(ii) B ltd. Forfeited 400 shares of Rs. 10 each fully called-up for non-payment of final call of Rs. 3
per share. 300 of these shares were re-issued as fully paid for Rs. 8 per share.
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(iii) C ltd. Forfeited 700 shares Rs. 10 each fully called up-up on which the holder has paid
application money @ 3 and allotment money @ 2 Rs. Per share. Out of these 300 shares were re-
issued as fully paid @ Rs. 7 per share.
(iv) D ltd forfeited 1000 shares of Rs. 10 each fully called-up on which the holder has paid only the
application money Rs. 3 per share. Out of these 600 shares were re-issued at Rs. 10.50 per share,
fully paid up.

Q.38 On 1st April 2012, Vishwas Ltd. was formed with an authorised capital of Rs. 10,00,000 divided
into 1,00,000 equity shares of Rs. 10 each. The company issued prospectus inviting applications for
90,000 equity shares. The company received applications for 85,000 equity shares. During the first year,
Rs. 8 per share were called. Ram holding 1,000 shares and Shyam holding 2,000 shares did not pay the
first call of Rs. 2 per share. Shyam‟s shares were forfeited after the first call and later on 1,500 of the
forfeited shares were re-issued at Rs. 6 per share, Rs. 8 called up.

Q.39 BMY Ltd. Invited applications for issuing 1,00,000 equity shares of ₹ 10 each at a premium of ₹
10 per share. The amount was payable as follows:
 On applications ₹ 10 per share (including ₹ 5 premium).
 On allotment, The balance.
The issue was fully subscribed. A share holder holding 300 shares paid the full share money with
application. Another share holder holding 200 shares failed to pay the allotment money. His shares were
forfeited. Later on these shares were re-issued for ₹ 4000 as fully paid up. Pass necessary journal entries
for the above transactions in the books of BMY ltd.

Q.40 David ltd. Issued ₹ 40,000,000 equity shares of ₹ 10 each out of its registered capital of ₹
10,00,00,000. The amount payable on these shares was as follows:
On application ₹ 1 per share; on allotment ₹ 2 per share; on first call ₹ 3 per call; on second and final call
₹ 4 per share.
All calls were made and were duly received, except the second and final call on 1,000 shares held by the
vipul. These shares were forfeited. Present the share capital in the balance sheet of the company.

Q.41 Suvidha Ltd. Is registered with an authorized capital of ₹ 10,00,00,000 divided into 10,00,000
equity shares of ₹ 100 each. The company issued 1,00,000 shares for public subscription. A shareholder
holding 100 shares, failed to pay the final call of ₹ 20 per share. His shares were forfeited. The forfeited
shares were re-issued at ₹ 90 per shares as fully paid up.

Q.42 Janta ltd issued 2,00,000 shares of ₹ 10 each at a premium of 10% per share payable as follows:
₹ 2 on application, ₹ 5 on allotment (including premium); and balance on call.
The issue was under subscribed to the extent of 20,000 shares. Shares were allotted to all the applicants.
All call was made and were dully received. “A” to whom 1,500 shares were allotted failed to pay
allotment and call money and B to whom 1200 shares were allotted paid the full amount due at the time of
allotment. The shares on which allotment and call money was not received were forfeited. The forfeited
shares were reissued for ₹ 9 per share fully paid up. Pass necessary journal entries for the above
transactions.
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Q.43 India Auto ltd is registered with an authorised capital of ₹ 7,00,00,000 divided into 7,00,000
shares of ₹ 100 each. The company issued 50,000 shares to the vendor for building purchased and
2,00,000 shares were issued to the public. The amount was payable as follows:
On application and allotment ₹ 20 per share; on First call ₹ 50 per share; on second and final call the
balance. All calls were made and were duly received except on 100 shares held by Rajani who failed to
pay the second and final call. Her shares are forfeited. Present the share capital in the balance sheet of the
company.

Q.44 XYZ ltd. Invited applications for 40,000 equity shares of ₹ 100 each at a premium of 6%. The
amount was payable as follows:
On application and allotment 90, on first and final: call balance amount.
Applications for 60,000 shares were received. Applications for 10,000 shares were rejected and shares
were allotted on pro-rata basis to remaining applicants. Excess applications money received on
application and allotment was adjusted towards sums due on first and final call. The calls were made. A
share holder, who applied for 50 shares, failed to pay the first and final call money. His shares were
forfeited. All the forfeited shares were reissued at ₹ 97 per share fully paid up. Pass necessary journal
entries for the above transaction in the books of XYZ ltd.

Q.45 X Ltd. issued 40,000 Equity Shares of Rs. 10 each at a premium of Rs. 2.50 per share. The
amount was payable as follows:
 On application – Rs. 2 per share
 On allotment – Rs. 4.50 per share (including premium)
 and on call – Rs. 6 per share
Owing to heavy subscription the allotment was made on pro-rata basis as follows:
(a) Applicants for 20,000 shares were allotted 10,000 shares.
(b) Applicants for 56,000 shares were allotted 14,000 shares.
(c) Applicants for 48,000 shares were allotted 16,000 shares.
It was decided that excess amount received on applications would be utilized on allotment and the
surplus would be refunded.
Ram, to whom 1,000 shares were allotted, who belongs to category (a), failed to pay allotment money.
His shares were forfeited after the call. Pass the necessary Journal entries in the books of X Ltd. for the
above transactions.

Q.46 X Ltd.-, issued 50,000 shares of Rs. 10 each at a premium of Rs. 2 per share payable as follows:
Rs. 3 on application Rs. 6 on allotment (including premium) and Rs. 3 on call. Applications were
received for 75,000 shares and a pro-rata allotment was made as follows: To the applicants of 40,000
shares, 30,000 shares were issued and for the rest 20,000 shares were issued. All moneys due were
received except the allotment and call money from Ram who had applied for 1,200 shares (out of the
group of 40,000 shares). All his shares were forfeited. The forfeited shares were re-issued for Rs. 7 per
share fully paid up. Pass necessary Journal Entries for the above transactions.
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Q.47 JJK Ltd. invited applications for issuing 50,000 equity shares of Rs 10 each at par. The amount
was payable as follows:
 On Application: Rs 2 per share
 On Allotment : Rs 4 per share
 On First and Final Call : Balance Amount
The issue was over-subscribed three times. Applications for 30% shares were rejected and money
refunded. Allotment was made to the remaining applicants as follows:
Category No. of Shares Applied No. of Shares Allotted
I 80,000 40,000
II 25,000 10,000
Excess money paid by the applicants who were allotted shares was adjusted towards the sums due
on allotment. Deepak, a shareholder belonging to Category I, who had applied for 1,000 shares, failed to
pay the allotment money. Raju, a shareholder holding 100 shares, also failed to pay the allotment money.
Raju belonged to Category II. Shares of both Deepak and Raju were forfeited immediately after
allotment. Afterwards, first and final call was made and was duly received. The forfeited shares of
Deepak and Raju were reissued at Rs 11 per share fully paid up. Pass necessary Journal entries for the
above transactions in the books of the company.

Q.48 'Blur Star Ltd.' was registered with an authorized capital of Rs 2,00,000 divided into 20,000
shares of Rs 10 each. 6,000 of these shares were issued to the vendor for building purchased. 8,000 shares
were issued to the public and Rs 5 per share were called up as follows: On application − Rs 2 per share
On allotment − Rs 1 per share On first call − Balance of the called up amount
The amounts received on these shares were as follows :
 On 6,000 shares − Full amount called
 On 1,250 shares − Rs 3 per share
 On 750 shares − Rs 2 per share
The directors forfeited 750 shares on which Rs 2 per share were received. Pass necessary journal entries
for the above transactions in the books of Blue Star Ltd.

Q.49 F ltd invited applications for issuing 15,000 equity shares of Rs. 10 each, Rs. 6 per share called
up. The amount was payable as follows:
On application and allotment – Rs. 2 per share
On allotment Rs. 1 Per share
On first Call Rs. 3 per share.
The issue was fully subscribed and the amount was received as follows:
On 10,000 shares – Rs. 6 Per share; on 3,000 shares – Rs. 3 per share; on 2000 Shares Rs. 2 per share.
The directors forfeited those shares on which less than Rs. 6 per share were received. The forfeited shares
were re-issued at Rs. 9 per share, as Rs. 6 per share paid up.
Pass necessary journal entries for the above transactions in the books of the company.
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Q50. Shyam Ltd invited application for issuing 80,000 Equity Shares of Rs. 10 each at a premium of
Rs, 40 per share. The amount was payable as follows: On Application Rs. 35 per share (including Rs. 30
premium) On Allotment Rs. 8 per share (including Rs. 4 premium) On first and Final Call – Balance
Application for 77,000 shares were received. Share was allotted to all the applicants. Sundram to whom
7,000 shares were allotted failed to pay the allotment money. His shares were forfeited immediately after
allotment. Afterwards the first and final call was made. Satyam the holder of 500 shares failed to pay the
first and final call. His shares were also forfeited out of the forfeited shares 1,000 were re-issued at Rs. 50
per share fully paid up. The re-issued shares included all the shares of satyam. Pass necessary Journal
Entries for the above transactions in the books shyam Ltd.

Q.51 VXN Ltd. invited applications for issuing 50,000 equity shares of Rs 10 each at a premium of Rs
8 per share. The amount was payable as follows:
On Application Rs 4 per share (including Rs 2 premium)
On Allotment Rs 6 per share (including Rs 3 premium)
On First Call Rs 5 per share (including Rs 1 premium)
On Second and Final Call – Balance Amount.
The issue was fully subscribed. Gopal, a shareholder holding 200 shares, did not pay the
allotment money and Madhav, a holder of 400 shares, paid his entire share money along with the
allotment money. Gopal's shares were immediately forfeited after allotment.

Afterwards, the first call was made. Krishna, a holder of 100 shares, failed to pay the first call
money and Girdhar, a holder of 300 shares, paid the second call money also along with the first call.
Krishna's shares were forfeited immediately after the first call.

Second and final call was made afterwards and was duly received. All the forfeited shares were
reissued at Rs 9 per share fully paid up. Pass necessary Journal Entries for the above transactions in the
books of the company.