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Assignment for Class 12 Accountancy Part 2 Chapter 1 Accounting For Share Capital
Class 12 Accountancy students should refer to the following printable assignment in Pdf for Part 2 Chapter 1 Accounting For Share Capital in Class 12. This test paper with questions and answers for Class 12 Accountancy will be very useful for exams and help you to score good marks
Part 2 Chapter 1 Accounting For Share Capital Class 12 Accountancy Assignment
Question. True/False:
According to the below given information the final call per share is Rs.22.
The subscribed capital of a company is Rs. 80,00,000 and the nominal value of the share is 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 only . The balance in the calls in arrear amounted to Rs.55,000.
Answer. True
Question. True/ False :
Securities premium received on issue of shares cannot be used for the purpose of buy back of shares.
Answer. False
Question. True/False-Share application amount is in the nature of Real account
Answer. False
Question. Arrange the following in proper sequence as types of “Share Capital”
(A) Paid up capital
(B) Issued capital
(C) Subscribed capital
(D) Called up capital
Answer. Issued, Subscribed, Called –up, Paid-up.
Question. Maximum limit of premium on shares is :
(A) 32%
(B) 20%
(C) No limit
(D) 100%
Answer. C
Question. Amount of money not received out of called up capital is :
(A) Added to share capital
(B) Subtracted from share capital
(C) Shown as current liabilities
(D) Shown as current asset
Answer. B
Question. Following amounts were payable on issue of shares by a company : Rs.3 on application , Rs.3 on allotment , Rs.2 on first call and Rs.2 on final call . X holding 500 shares paid only application and allotment money whereas Y holding 400 shares did not pay final call . Amount of calls in arrear will be:
(A) 3,800
(B.2,800
(C) 1,800
(D) 6,200
Answer. B
Question. Rajan Limited issued 50,000 shares at a price lower than the nominal value of the share. The shares issued are called:
(A) Sweat equity shares
(B) Redeemable Preference shares
(C) Equity shares
(D) Bonus shares
Answer. A
Question. E Ltd. had allotted 10,000 shares to the applicants of 14,000 shares on pro-rata basis, application money on another 6000 shares was refunded .The amount payable on the application was Rs.2. Sitaraman applied for 420 shares . The number of shares allotted to him will be:
(A) 60 shares
(B) 340 shares
(C) 320 shares
(D) 300 shares
Answer. D
Question. A company issued 4,000 equity shares of rupees 10 each at par payable as under:
On application rupees 3 , on allotment rupees 2; on first call rupees 4 and on final call rupees 1 per share. Applicants were received for 16,000 share . Application for 6,000 shares were rejected and pro-rata allotment was made to the applicants for 10,000 shares . How much amount will be received in cash on first call,when excess application money is adjusted towards amount due on allotments and calls :
(A) Rupees 6.000
(B) nil
(C) Rupees 16,000
(D) Rupees 10,000
Answer. A
Question. A company issued 4000 equity shares of rupees 50 each at par payable as under:
On application rupees 20%, on allotment 40% ; on first call 10% ; on final call -balance Applications were received for 10,000 shares . Allotment was made pro-rata . How much amount will be received in cash on allotment?
(A) Rupees 6.000
(B) nil
(C) Rupees 16,000
(D) Rupees 20,000
Answer. D
Question. Which one of the following is not a part of subscribed capital:
(A) Equity shares issued to vendor
(B) Preference shares of convertible type
(C) Forfeited shares
(D) Bonus shares
Answer. C
Question. When nominal (face) value of a share is called up by the company but as some shareholders did not pay the money, the shares are forfeited . The share capital is shown in the balance sheet (notes) of a company under the following heading:
(A) Subscribed and fully paid up
(B) Subscribed but not fully paid up
(C) Subscribed and called up
(D) Subscribed but not called up
Answer. A
Question. Zee Ltd issued 15,000 equity shares of Rs.20 each at a premium of Rs.5 payable Rs.5 on application,Rs.10 on allotment (including premium) and the balance on first and final call. The company received applications for 22,500 shares and allotment was made pro rata. Bittoo to whom 1,200 shares were allotted, failed to pay the amount due on allotment. All his shares were forfeited after the call was made. The forfeited shares were reissued to Dheeraj at par. Assuming that no other bank transactions took place, the bank balance of the company after the above transactions is :
(A) Rs.6,85,000
(B) Rs.3,60,500
(C) Rs.3,78,000
(D) Rs.6,34,000
Answer. D
Question. Zen Ltd purchased the sundry assets of M/s Surat Industries for Rs.28,60,000 payable in fully paid shares of Rs.100 each. State the number of shares issued to vendor when issued at premium of 10%.
(A) 28,000
(B) 31,778
(C) 28,600
(D) 26,000
Answer. C
Question. The subscribed share capital of Mukand Ltd is Rs.1,00,00,000 of Rs.100 each. There were no calls in arrear till the final call was made. The final call made was paid on 97,500 shares. The calls in arrear amounted to Rs.87,500.The final call on share :
(A) Rs.20
(B) Rs.35
(C) Rs.25
(D) Rs.45
Answer. B
Question. These shares which in addition to the fixed preference dividend, carry a right to participate in the surplus profits, if any, after dividend at a stipulated rate has been paid to the equity share holders are called:
(A) Participating preference shares
(B) Convertible preference shares
(C) Redeemable preference shares
(D) Cumulative preference shares
Answer. A
Question. T Ltd had allotted 20,000 shares to the applicants of 24,000 shares on pro rata basis. The amount payable on application is Rs.2. Manoranjan applied for 450 shares. The number of shares allotted and the amount carried forward for adjustment against allotment money due from him is:
(A) 150 shares,Rs.375
(B) 375 shares,Rs.150
(C) 400 shares,Rs.100
(D) 300 shares,Rs.300
Answer. B
Question. A company forfeited 3,000 shares of Rs.10 each(which were issued at par) held by Kishore for nonpayment of allotment money ofRs.5 per share.The called up value per share was Rs.8.On forfeiture, the amount debited to share capital:
(A) Rs.30,000
(B) Rs.24,000
(C) Rs.15,000
(D) Rs.6,000
Answer. B
Question. Z limited issued shares of Rs.100 each at a premium of 10%. Mr. Q purchased 500 shares and paid Rs.20 on application but did not pay the allotment money of Rs.30. If the company forfeited his 30% shares, the forfeiture account will be credited by :
(A) Rs. 4500
(B) Rs. 3500
(C) Rs. 1650
(D) Rs. 3000
Answer. D
Question. Daisy Limited forfeited 200 shares Rs.10 each who had applied for 500 shares, issued at a premium of 10% for nonpayment of final call of Rs.3 per share. Out of these 100 shares were issued as fully paid up for Rs.15. The profit on reissue is :
(A ) Rs. 700
(B) Rs. 6400
(C) Rs. 300
(D) Rs. 400
Answer. A
Question. Mithas Limited was formed with share capital of Rs. 50,00,000 divided into 50,000 shares of Rs.100 each. 9,000 shares were issued to the vendor as fully paid for purchase consideration of a furniture acquired. 30,000 shares were allotted in payment of cash on which Rs.70 per share was called and paid . State the amount of subscribed capital :
(A) Rs. 50,00,000
(B) Rs. 30,50,000
(C) Rs. 30,00,000
(D) Rs. 20,00,000
Answer. C
Question. Faltu Limited invited application for 2,00,000 shares of Rs.10 each. These shares were issued at premium of Rs.11 each which was allowed at the time of allotment. All money was called and duly received except on 10,000 shares on which only application money of Rs.3 per share was received.
The company forfeited all the shares. 7000 of forfeited share where re-issued at Rs.13per share. State the amount of securities premium to be shown under the head -Reserve and surplus.
(A) Rs.20,00,000
(B) Rs.11,11,000
(C) Rs.8,11,000
(D) Rs.21,11,000
Answer. D
Question. Mahima limited has an authorised capital of Rs. 1,00,00,000 divided into 1,00,000 equity shares of Rs .100 each . If offered 90,000 equity shares Rs.10 each at a premium of Rs.8 .The public applied for 81,000 equity shares. Till 31st March 2018, Rs.17 (including premium) was called . An applicant holding 5000 shares did not pay first call of Rs.2per share.
As per the above given information:
………. is the amount of Share capital to be shown in the balance sheet of the company.
Answer. Rs.7,19,000
Question. Out of total face value, liability of a shareholder is limited to …………… value of the share allotted to him.
Answer. Called up
Question. Match the following :
a) Cumulative Pref. Share i) Repaid after some time
b) Participating Pref. Share ii) converts into equity shares
c) Redeemable Pref. shares iii) Dividend accumulates if not paid
d) Convertible Pref. shares iv) Gets share in surplus profit
The correct match is:
A) a-ii ,b-i, c-iii, d-iv
B) a-iii, b-iv, c-i, d-ii
C) a-iii, b-iv, c-ii ,d-i
D) a-ii, b-iv, c-iii, d-i
Answer. B
Important Questions and Answers
Question : How much money will be required to buy 400, Rs.12.50 shares at a premium of Rs.1?
Solution:
Given,
The number of shares required to be bought = 400
And, Rs 12.50 shares at a premium of Rs 1 means;
Nominal value of the share is Rs. 12.50
And its market value = Rs 12.50 + Rs 1 = Rs 13.50
So, the money required to buy 1 share = Rs 13.50
Thus,
The money required to buy 400 shares = 400 x Rs 13.50 = Rs 5400
Question : How much money will be required to buy 250, Rs.15 shares at a discount of Rs.1.50?
Solution:
The number of shares to be bought is 250.
And, Rs 15 shares at a discount of Rs 1.50 means
Nominal value of the share is Rs 15 and
Its market value = Rs 15 – Rs 1.50 = Rs 13.50
Thus,
The money required to buy 250 shares = 250 x Rs 13.50 = Rs 3375
Question : A person buys 120 shares at a nominal value of Rs 40 each, which he sells at Rs 42.50 each. Find his profit and profit percent.
Solution:
Given,
The nominal value of each share is Rs 40
So, the nominal value of 120 shares = Rs 40 x 120 = Rs 4,800
And, the market value of 120 shares = Rs 42.50 × 120 = Rs 5,100
Thus, his profit = Rs 5,100 – Rs 4,800 = Rs 300
And the profit percentage is given by,
Profit (%) = 300/4800 x 100 = 6.25 %
Question : Find the cost of 85 shares of Rs 60 each when quoted at Rs 63.25.
Solution:
Given,
Market value of 1 share = Rs 63.25
So, the market value of 85 shares = Rs 63.25 x 85 = Rs 5,376.25
Question : A man invests Rs800 in buying Rs5 shares and when they are selling at a premium of Rs1.15, he sells all the shares. Find his profit and profit percent.
Solution:
Nominal value of 1 share = Rs 5
Market value 1 share = Rs 5 + Rs 1.15 = Rs6.15
Total money invested = Rs 800
So, the number of shares purchased = 800/5 = 160
And,
Market value of 160 shares = 160 x 6.15= Rs 984
Thus, his profit = Rs 984 – Rs 800 = Rs 184
And the profit percentage is given by
Profit (%) = 184/800 x 100 = 23 %
Question : Find the annual income derived from 125, Rs.120 shares paying 5% dividend.
Solution:
Given,
The nominal value of 1 share = Rs 120
So, the nominal value of 125 shares = 125 x Rs 120 = Rs 15,000
Now,
Dividend = 5 % of Rs 15,000
⇒ 5/100 x 15000 = Rs 750
Thus, the annual income is Rs 750
Question : A man invests Rs 3,072 in a company paying 5% per annum, when its Rs 10 share can be bought for Rs 16 each. Find:
(i) his annual income
(ii) his percentage income on his investment.
Solution:
Given,
Market value of 1 share = Rs 16
Nominal value of 1 share= Rs 10
And the money invested = Rs3,072
So, the number of shares purchased = 3072/16 = 192
And, the nominal value of 192 shares = Rs 10 x 192 = Rs 1,920
Therefore,
(i) The annual income = 5 % of Rs 1,920
= 5/100 x 1920
3 1/8
= Rs 96
(ii) Income % = 96/3072 x 100 = 3.125% =
Question : A man buys 75, Rs 100 shares paying 9 percent dividend. He buys shares at such a price that he gets 12 percent of his money. At what price did he buy the shares?
Solution:
Given,
Nominal value of 1 share = Rs100
So, the nominal value of 75 shares = 100 x 75 = Rs 7,500
And, Dividend % = 9 %
Thus, dividend = 9 % of Rs 7,500
= 9/100 x Rs 7,500 = Rs 675
Let’s consider the market price of 1 share = Rs y
Then the market price of 75 shares = Rs 75y
And, Profit % on investment = 12%
12% of 75y = Rs 657
12/100 x 75y = Rs 657
y = Rs 75
Therefore, the price of his shares is Rs 75 each
Question : By purchasing Rs 25 gas shares for Rs 40 each, a man gets 4 percent profit on his investment. What rate percent is the company paying? What is his dividend if he buys 60 shares?
Solution:
Given,
Nominal value of 1 share = Rs25
Market value of 1 share = Rs40
And, the profit% on investment = 4%
Then profit on 1 share = 4% of Rs 40 = Rs 1.60
Thus,
Dividend % = 1.60/25 x 100 = 6.4%
Next,
If the number of shares purchased = 60
Then, the dividend on 60 shares = 60 x Rs 1.60 = Rs 96
Question : Hundred rupee shares of a company are available in the market at a premium of Rs 20. Find the rate of dividend given by the company, when a man’s return on his investment is 15%.
Solution:
Given,
Nominal value of 1 share = Rs 100
And the market value of 1 share = Rs100 + Rs 20 = Rs120 (as the premium is Rs 20)
Also given, the profit % on investment of 1 share = 15%
Then profit = 15% of Rs 120 = Rs 18
Therefore,
Dividend % = 18/100 x 100 = 18%
Question : Rs 50 shares of a company are quoted at a discount of 10%. Find the rate of dividend given by the company, the return on the investment on these shares being 20 percent.
Solution:
Given,
Nominal value of 1 share = Rs 50
Discount on each share = 10 %
So, the market value of 1 share = Rs50 – 10% of Rs50
= Rs 50 – Rs 5 = Rs 45
Also given, Profit % on investment = 20%
Then the profit on 1 share = 20% of Rs 45 = Rs 9
Therefore,
Dividend % = 9/50 x 100 = 18 %
Question : A company declares 8 percent dividend to the shareholders. If a man receives Rs 2,840 as his dividend, find the nominal value of his shares.
Solution:
Given,
Dividend % = 8 %
And, the dividend is Rs 2,840
Let the nominal value of shares be Rs y
Then,
8% of y = Rs 2,840
(8/100) x y = Rs 2,840
y = Rs 35,500
Thus, the nominal value of the man’s share is Rs 35,500
Question : How much should a man invest in Rs 100 shares selling at Rs 110 to obtain an annual income of Rs 1,680, if the dividend declared is 12%?
Solution:
From the question,
Nominal value of 1 share = Rs100
And, the market value of 1 share = Rs110
Let the number of shares purchased = n
Then the nominal value of n shares = Rs (100n)
Dividend % = 12%
Given that the dividend = Rs1,680
12 % of 100n = Rs 1,680
12/100 x 100n = Rs 1680
So, the market value of 140 shares = 140 x 110 = Rs 15,400
Therefore the investment of the man should be Rs 15,400
Question : A company declares a dividend of 11.2% to all its share-holders. If its Rs 60 share is available in the market at a premium of 25%, how much should Rakesh invest, in buying the shares of this company, in order to have an annual income of Rs 1,680?
Solution:
Given,
Nominal value of 1 share = Rs60
Market value of 1 share = Rs 60 + 25% of Rs 60
= Rs 60+ Rs 15= Rs 75
Let the number of shares purchased be n
Then, the nominal value of n shares = Rs (60n)
Dividend % = 11.2%
Given that the dividend = Rs 1,680
So, 11.2% of 60n = Rs 1,680
11.2/100 x 60n = Rs 1,680
n = 1680 x 100 / 11.2 x 60 = 250
Then, the market value of 250 shares will be = 250 x 75 = Rs 18,750
Therefore, the investment of Rakesh should be Rs 18,750
Question : A man buys 400, twenty-rupee shares at a premium of Rs 4 each and receives a dividend of 12%. Find:
(i) the amount invested by him.
(ii) his total income from the shares.
(iii) percentage return on his money.
Solution:
Given,
The nominal value of 1 share = Rs 20
Market value of 1 share = Rs 20 + Rs 4 = Rs 24
No. of shares purchased = 400
Nominal value of 400 shares = 400 x 20 = Rs 8,000
(i) Market value of 400 shares = 400 x 24 = Rs 9,600
(ii) Dividend% = 12%
Dividend = 12% of Rs 8,000
= 12/100 x Rs 8,000 = Rs 960
Thus, the total income from the shares is Rs 960
(iii) Percentage return on his money is
Return % = income/investment x 100
= (960/9600) x 100 = 10%
Question : A man buys 400, twenty-rupee shares at a discount of 20% and receives a return of 12% on his money. Calculate:
(i) the amount invested by him.
(ii) the rate of dividend paid by the company.
Solution:
Given,
The nominal value of 1 share = Rs 20
Market value of 1 share = Rs20 – (20% of Rs 20)
= Rs 20 – Rs 4 = Rs 16
Number of shares purchased = 400
Nominal value of 400 shares = 400 x 20 = Rs 8,000
(i) Market value of 400 shares = 400 x 16 = Rs 6,400
(ii) Return% = 12%
Income = 12% of Rs 6,400
= 12/100 x Rs 6,400 = Rs 768
And,
(iii) The rate of dividend is
Dividend % = (income/ nominal value) x 100
= (768/ 8000) x 100 = 9.6 %
Question : A company, with 10,000 shares of Rs 100 each, declares an annual dividend of 5%.
(i) What is the total amount of dividend paid by the company?
(ii) What should be the annual income of a man who has 72 shares in the company?
(iii) If he received only 4% of his investment, find the price he paid for each share.
Solution:
Given,
Nominal value of 1 share = Rs100
Then, nominal value of 10,000 shares =10,000 x Rs 100= Rs 10,00,000
(i) Dividend %= 5%
Dividend = 5% of Rs 10,00,000
= 5/100 x Rs 10,00,000 = Rs 50,000
Thus, a dividend amount of Rs 50,000 is paid by the company.
(ii) Nominal value of 72 shares = Rs100 x 72 = Rs7,200
Dividend = 5% of Rs7,200
= 5/100 x Rs 7,200 = Rs 360
Thus, the annual income of the man is Rs 360
(iii) Let’s consider the market value of 1 share = Rs y
Then market value of 10,000 shares = Rs (10,000y)
And the return% = 4%
So, 4% of Rs (10,000y) = Rs 50,000
= 4/100 x 10,000y = Rs 50,000
y = Rs 125
Thus, the price for each share is Rs 125
Question : By investing Rs.45,000 in 10% Rs.100 shares, Sharad gets Rs.3,000 as dividend. Find the market value of each share.
Solution:
We know that,
Annual income from 1 share = 10% of Rs 100 = Rs 10
Given, the total income = Rs 3000 (as dividend)
Hence,
The number of shares bought = Total annual income/ Annual income from 1 share
= 3000/10 = 300
Therefore,
The market value of one share = Total investment/ Number of shares
= 4500/300
= Rs 150
Question : Mrs. Kulkarni invests Rs.1, 31,040 in buying Rs.100 shares at a discount of 9%. She sells shares worth Rs.72,000 at a premium of 10% and the rest at a discount of 5%. Find her total gain or loss on the whole.
Solution:
Given,
Investment = Rs 1,31,040
Nominal value of 1 share = Rs 100
Discount = 9% of Rs 100 = Rs 9
So, the market value of 1 share = Rs 100 – Rs 9 = Rs 91
Then, the number of shares purchased = Investment/ market value of 1 share
= 1,31,040/ 91 = 1440
Number of shares worth Rs 72,000 = 72,000/100 = 720
Now, Mrs. Kulkarni sells 720 shares at a premium of 10%
Then, the market value of 1 share = Rs 100 + Rs 10 = Rs 110
So, the selling price of 720 shares = 720 x Rs 110
The number of remaining shares = 1440 – 720 = 720
And, she sells 720 shares at a discount of 5%
Now, the market value of 1 share = Rs 100 – Rs 5 = Rs 95
The selling price of 730 shares = 720 x Rs 95 = Rs 68,400
Total selling price = Rs(79,200 + 68,400) = Rs 1,47,600
Thus, the total gain = Total selling price – Total investment
= Rs (1,47,600 – 1,31,040)
= Rs 16560
Question : A man invests a certain sum on buying 15% Rs.100 shares at 20% premium. Find :
(i) His income from one share
(ii) The number of shares bought to have an income, from the dividend, Rs.6480
(iii) Sum invested
Solution:
(i) Dividend on one share = 15% of Rs 100
= Rs (15/100 x 100) = Rs 15
Hence, the income from one share is Rs 15
(ii) Number of shares bought by the man = annual income/ dividend on one share
= 6480/ 15
= Rs 432
(iii) Given that the man bought shares of Rs 100 at 20% premium, the market value of one share
= Rs (1 + 20/100) x 100
= Rs (120/100 x 100)
= Rs 120
His total investment = number of shares x market value of one share
= 432 x Rs 120
= Rs 51, 840
Question : Gagan invested 80% of his savings in 10% Rs.100 shares at 20% premium and the rest of his savings in 20% Rs.50 shares at Rs.20% discount. If his incomes from these shares is Rs.5,600 calculate:
(i) His investment in shares on the whole
(ii) The number of shares of first kind that he bought
(iii) Percentage return, on the shares bought on the whole.
Solution:
(i) Let’s assume the total savings be Rs x (which is the investment)
For the 1st part – 80% of his savings
Nominal value of each share = Rs 100
Market value of each share = 100 + 20% Rs 100 = 100 + 20 = Rs 120
So, the number of shares bought will be = 0.8x/120
Dividend on each share = 10% of 100 = Rs 10
Hence, the total dividend = 10 x (0.8x/120) = Rs 0.8x/12
Now, the 2nd part (remaining 20% of savings)
Nominal value of each share = Rs 50
Market value of each = 50 – 20% Rs 50 = 50 – 10 = Rs 40
So, the number of shares bought = 0.2x/ 40
Dividend on each share = 20% of 50 = Rs 10
Hence, the total dividend = 10 x 0.2x/40 = Rs 0.2x/4
Given that dividend (incomes) from both the investments are Rs 5600
So, we have
Rs 0.8x/12 + Rs 0.2x/4 = 5600
(0.8x + 0.6x)/12 = 5600
x = (5600 x 12)/ 1.4
x = 48,000
Therefore, the investment in shares together as his savings is Rs 48,000
(ii) Now, the number of shares bought = 0.8x/120 = (0.8 x 48,000)/ 120 = Rs 320
(iii) The total dividend or the return = 0.8x/12 + 0.2x/4
= 0.8(48,000)/12 + 0.2(48,000)/4
11 2/3 %
= Rs. 5600
Thus, the return percentage = 5600/48000 x100 % = 11.67%
Question : Ashwarya bought 496, Rs.100 shares at Rs.132 each, find:
(i) Investment made by her
(ii) Income of Ashwarya from these shares, if the rate of dividend is 7.5%.
(iii) How much extra must Ashwarya invest in order to increase her income by Rs.7,200
Solution:
Given,
(i) The nominal value of each share = Rs 100
Market price of each share = Rs 132
Number of shares bought = 496
So, the investment made by her = 496 x Rs 132 = Rs 65,472
(ii) Dividend on 1 share = 7.5% of Rs 100 = Rs 7.5
Thus, the income of Ahwarya from these shares = 496 x 7.5 = Rs 3,720
(iii) If she wants to increase her income by Rs 7,200
Then the number of shares she should buy = increase in the income/ income of one share
= 7,200/7.5 = 960
Therefore, she should invest an extra of = 960 x Rs 132 = Rs 1,26,720
Question : Gopal has some Rs.100 shares of company A, paying 10% dividend. He sells a certain number of these shares at a discount of 20% and invests the proceeds in Rs.100 shares at Rs.60 of company B paying 20% dividend. If his income, from the shares sold, increases by Rs.18,000, find the number of shares sold by Gopal.
Solution
Given,
The nominal value of each share = Rs 100
Rate of dividend = 10%
Dividend on each share = 10% of Rs 100 = Rs 10
Then, the dividend on x shares will be Rs 10x
Selling price of each share = Rs 100 = 20% of Rs 100 = Rs 80
And, the amount obtained on selling x shares = Rs 80x
Given that, the proceeds are invested in Rs 100 shares at Rs 60 of company B paying 20% dividend
Now,
Nominal value of each share = Rs 100
Market value of each share = Rs 60
So, the number of shares bought by the man = amount obtained/ Market value of each share
= 80x/60 = 4x/3
Dividend on each share = 20% of Rs 100 = Rs 20
So the total dividend received = Divided on each share x number of shares
= 20 x 4x/3 = 80x/3
Given, the increase in the income = Rs 18,000
Thus,
80x/3 – 10x = 18,000
50x/3 = 18,000
x = Rs 1080
Therefore, the number of shares sold by Gopal is Rs 1080
Question : A man invests a certain sum of money in 6% hundred-rupee shares at Rs.12 premium. When the shares fell to Rs.96, he sold out all the shares bought and invested the proceed in 10%, ten-rupee shares at Rs.8. If the change in his income is Rs.540, Find the sum invested originally.
Solution:
Let’s assume the original sum invested to be Rs x
Then the number of Rs 100 shares purchased at premium of Rs 12 will be
= x/ (100 + 12) = x/112
Given,
The income per original share is 6% = Rs 6
So, the total income = (Number of shares) x (earning per share)
= (x/112) x 6 = 3x/56
Proceeds from the sale of original shares at Rs 96 per share
= (number of shares) x 96 = x/112 x 96 = 6x/7
Number of Rs 10 shares purchased at Rs 8 per share from the proceeds of original shares
= (Proceeds from sale of original shares)/8 = (6x/7)/8 = 3x/28
Income per new share of Rs 10 at 10% = 10/100 x 10 = Rs 1
Thus, the total income from the new shares = Number of shares x income per share
= 3x/28 x 1 = 3x/28
The change in income is Rs 540 (given)
Income from old shares – Income from new shares = Rs 540
So,
540 = 3x/28 – 3x/56 = 3x/56
x = 540/ (3/56) = 10, 080
Therefore, the original sum invested is Rs 10,080
Question : Mr. Gupta has a choice to invest in ten-rupee shares of two firms at Rs13 or at Rs16. If the first firm pays 5% dividend and the second firm pays 6% dividend per annum, find:
(i) which firm is paying better.
(ii) if Mr. Gupta invests equally in both the firms and the difference between the returns from them is Rs 30, find how much, in all, does he invest.
Solution:
(i) The first firm:
Nominal value of 1 share = Rs 10
Market value of 1 share = Rs 13
Dividend = 5% of Rs 10 = Rs 0.50
Thus, the income % = Income/ Investment x 100
= 0.50/13 x 100 = 3.846 %
Now,
The second firm:
Nominal value of 1 share = Rs 10
Market value of 1 share = Rs 16
Dividend % = 6 %
Thus, income % = income/ investment x 100
= 0.60/ 16 x 100
= 3.75 %
Therefore, the first firm is paying better than second firm
(ii) Let money invested in each firm = Rs y
For 1st firm
Number of shares purchased = y/13 shares
Total dividend = Rs 0.50 x y/13 = Rs y/26
For 2nd firm
Number of shares purchased = y/16 shares
Total dividend = Rs 0.60 x y/16 = Rs 3y/80
Given the difference of both dividend = Rs 30
y/ 26 – 3y/ 80 = Rs 30
y/ 1040 = Rs 30
y = Rs 30 x 1040 = Rs 31,200
Therefore, total money invested in both firm = Rs 31,200 x 2
= Rs 62,400
Question : Ashok invested Rs.26,400 in 12%, Rs.25 shares of a company. If he receives a dividend of Rs.2,475, find the:
(i) number of shares he bought.
(ii) market value of each share.
Solution:
(i) Given, total dividend = Rs 2,475
So, the dividend on each share = 12% of Rs 25 = 12/100 x Rs 25 = Rs 3
Thus, the number of shares bought = Total dividend/ Dividend on 1 share
= 2475/ 3 = 825
(ii) Market value of 825 shares = Rs 26,400
Therefore, market value of each share = total investment/ number of shares = 26400/825 = Rs 32.
Question : A man invested Rs45,000 in 15% Rs100shares quoted at Rs125. When the market value of these shares rose to Rs140, he sold some shares, just enough to raise Rs8,400. Calculate:
(i) the number of shares he still holds;
(ii) the dividend due to him on these remaining shares.
Solution:
(i) Total investment = Rs 45,000
And the market value of 1 share = Rs 125
Thus, the number of shares purchased = 45000/125 = 360 shares
Nominal value of 360 shares = Rs 100 x 360 = Rs 36,000
Now, let the number of shares sold be n
Then, the sale price of these n shares is = Rs 8,400
So,
n = 8400/140 = 60 shares
Thus, the number of shares he still holds is 360 – 60 = 300
(ii) Nominal value of 300 shares = Rs 100 x 300 = Rs 30,000
And, dividend% = 15%
Dividend = 15% of Rs 30,000
= 15/100 x Rs 30,000 = Rs 4,500
Question : S Ltd. offers 1,00,000 equity shares of Rs.10 each payable Rs.3 on application, Rs.3 on allotment(including premium Rs.2), Rs.4 on first call three months after allotment and Rs.2 on final call three months after first call. Applications were received for 1,58,500 shares and allotment was made as under:
Shares Allotted
Allotment in full 19,000
(Mr. D paid in full on allotment in respect of 4,000 shares)
Allotment of 2/3 of shares applied for 80,000
Allotment of 1/2 of shares applied for 1,000
Application money of Rs.52,500 in respect of 17,500 shares upon which no allotment was made was returned to applicants. All amounts were received except final call on 100 shares which were forfeited and reissued later on Rs.9 each. Interest on call in advance is paid @ 12% p.a.(capital reserve Rs.700)
Question : Rajesh Ltd. issued a prospectus inviting applications for 3,00,000 shares of Rs.10 each at a premium of Rs.4 per share, payable as follows:
On Application Rs.4(including Rs.1 premium)
On Allotment Rs.3(including Rs.1 premium)
On First Call Rs.4(including Rs.1 premium)
On Second and Final call Rs.3(including Rs.1 premium)
Applications were received for 3,80,000 shares and pro-rata allotment was made on the applications for 3,50,000 shares. It was decided to utilise excess application money towards the sums due on allotment.
X, to whom 6,000 shares were allotted, failed to pay the allotment money and his shares were forfeited after allotment.
Y, who applied for 10,500 shares failed to pay the two calls and on his such failure, his shares were forfeited.
Z, who was allotted 3,000 shares did not pay the final call.
Of the shares forfeited, 11,000 shares were reissued as fully paid up for Rs.9 per share, the whole of Y's share being included. Prepare Cash Book, Journal and show the Share Capital in the Balance Sheet.(capital reserve Rs.41,333)
Question : Journalise the following(only forfeiture and reissue):
(A) A limited company for forfeited 300 shares of Mr.X who had applied for 500 shares on account of non-payment of allotment money Rs.3+2(premium) and first call Rs.2. Only Rs.3 per share was received with application. Out of these, 200 shares were reissued to Mr. Y as fully paid shares for Rs.8 per share.(capital reserve Rs.600)
(B) A company forfeited 200 shares of Rs.10 each fully called up issued at 10% discount on which Rs.3 per share was received with application. Amount required to be paid was Rs.2 on allotment, Rs.2 on First call and Rs.2 on final call. Out of these, 100 shares were reissued to Mr. M as fully paid shares at Rs.8 per share.(capital reserve Rs.200)
Please click the below link to access CBSE Class 12 Accountancy Issue of Shares Assignment
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CBSE Class 12 Accountancy Part 2 Chapter 1 Accounting For Share Capital Assignment
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