Share Capital Problems and Solutions

Share Capital Problems and Solutions is a set of five solved problems.

Problems 1: Oversubscription of Shares

Ali Mohammad Khan Ltd. issued 100,000 equity shares of Rs. 10 each to the public at par. The details of amount payable on the shares are as follows.

share capital problems

Application monies were received on 120,000 shares. Excess monies were refunded immediately. All other amount on allotment and final call received. Pass Journal entries; prepare Bank Account and Balance Sheet.

Solution: 

journal entries share capital

 

bank account share capital

 

share capital account

 

balance sheet share capital

 

 

Problems 2: Share Premium

The Authorized capital of a company is 200,000 shares of worth Rs. 10 each. On March 2018, 50,000 shares are issued for subscription at a Premium of Rs. 2 per share. The share money payable as follow: Rs. 5(including the premium of Rs. 2) with Application, Rs. 3 on Allotment, Rs. 2 on First Call and Rs. 2 on Final Call. Pass Journal entries; prepare Bank Account and Balance Sheet for Star Ltd.

Solution: 

equity shares journal entries

 

equity shares bank account

 

equity shares capital account

 

equity shares balance sheet

 

Problems 3: Under Subscription and Share Discount

Newcornor Ltd. issued 10,000 shares of Rs. 10 each at a discount of 10% payable as: on Application Rs. 2; on Allotment Rs. 4; and on Final Call Rs. 3. At the end of this transaction 8,000 shares are subscribed and money was duly received. Pass Journal entries; prepare Bank Account and Balance Sheet for year ended 31st December 2017.

Solution: 

share capital journal entries solved

 

share capital bank account solved example

 

share capital account solved problems

 

share capital balance sheet solved

 

 

Problems 4: Arrears Money

Fine Book Ltd. has Authorized Capital 1 million share of worth Rs. 10 each. Company issued 100,000 equity shares of Rs. 10 each at Rs.2 Discount per shares. The amount payable as: Rs. 2 on Application; Rs. 3 on Allotment; and Rs.3 on Call. All monies due were received except the allotment monies for 2,000 shares. Show the Journal entries; Bank Account and Balance Sheet as on March 31st, 2018.

Solution: 

subscribed capital journal entries

 

subscribed capital bank account

 

subscribed capital account

 

subscribed capital balance sheet

 

 

Problems 5: Practice of P1 to P4

Dynamic Ltd. has Authorized Capital 100,000 share of worth Rs. 10 each. Company issued 10,000 equity shares of Rs. 10 each at Rs.2 Premium per shares. The amount payable as Rs. 2 on Application; Rs. 5 in Allotment (including Premium); and rest on First and Final Call. Applications were received for 15,000 Shares. Excess Application money was refunded to applicants. All monies due were received except the First and Final Call monies for 1,000 shares. Show the Journal entries; Bank account and Balance Sheet as on March 31st, 2018.

Solution: 

types of shares

 

authorized capital

 

issued capital

 

paid up capital

 

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