Short Answer Questions
Question 1.
Solution 1
Question 2.
Solution 2 At least 5% of share application money of the nominal value of shares. The Application money must be deposited by the Company in a ‘Scheduled Bank’. Application money is a part of the share capital of the company, and as such, when the directors allot the shares the application money is transferred to share capital account. Application money received by the company when it shares are issues to the public.
Question 3.
Solution 3 In the absence of the Articles of Association, the provisions of Table ‘F’ of Schedule I of the companies Act, 2013 shall apply. The amount to be called up either on application, or on allotment, or on any one call shall not exceed 25% of the total quantum of the issue.
Question 4.
Solution 4 In the absence of the Articles of Association, the provisions of Table ‘F’ of Schedule I of the companies Act, 2013 shall apply. There must be an interval of at least one month between the makings of two calls.
Question 5.
Solution 5 The amount of securities premium may be charged by the Company on application or on allotment or even with the calls.
Entries will be passed, if the amount of premium is received along with application money:
Question 6.
Solution 6 No, securities premium cannot be utilised for the purchases of fixed assets. According to section 52 (2) of the companies Act, 2014 the amount of Securities premium can be utilised only for the following purpose:
1.) In writing off the preliminary expenses of the company.
2.) For writing off the expenses, commission or discount allowed on issue of share or debentures of the company.
3.) For providing for the premium payable on redemption of redeemable preference shares or debentures of the company.
4.) For issuing fully paid bonus shares.
5.) For Buy back of its own shares and other securities as per section 68.
Question 7.
Solution 7 Securities Premium can utilized:-
1.) In writing off the preliminary expenses of the company.
2.) For writing off the expenses, commission or discount allowed on issue of share or debentures of the company.
3.) For providing for the premium payable on redemption of redeemable preference shares or debentures of the company.
Numerical Questions
Question 1.
Solution 1
Question 2.
Solution 2 Extract of Balance Sheet of Tractors India Ltd.
Question 3.
Solution 3
Question 4.
Solution 4
Question 5.
Solution 5
Question 6.
Solution 6
Question 7.
Solution 7
Question 8.
Solution 8
Question 9.
Solution 9
Question 10.
Solution 10
Question 11.
Solution 11
Question 12.
Solution 12
Question 13.
Solution 13
Question 14.
Solution 14
Question 15.
Solution 15
Question 16.
Solution 16
Question 17.
Solution 17
Question 18.
Solution 18
Question 19.
Solution 19
Question 20.
Solution 20
Question 21.
Solution 21
Question 22.
Solution 22
Working Note:-
Calculation of Access Money:-
70,000 Share @ Rs. 4 per share = Rs. 2,80,000
Less: Adjustment in Allotment 30,000 @ Rs. 6 = Rs. 1,80,000
Amount transferred to Call in advance = Rs. 1,00,000
Question 23.
Solution 23
Question 24.
Solution 24
Question 25.
Solution 25
Question 26.
Solution 26
Question 27.
Solution 27
Question 28.
Solution 28
Question 29.
Solution 29
Question 30.
Solution 30
Question 31.
Solution 31
Question 32.
Solution 32
Question 33.
Solution 33
Question 34.
Solution 34
Question 35.
Solution 35
Question 36.
Solution 36
Question 37.
Solution 37
Question 38.
Solution 38
Question 39.
Solution 39
Question 40.
Solution 40
Question 41.
Solution 41
Question 42.
Solution 42
Question 43.
Solution 43
Question 44.
Solution 44
Question 45.
Solution 45
Question 46.
Solution 46
Question 47.
Solution 47
Question 48.
Solution 48
Question 49.
Solution 49
Question 50.
Solution 50
Extra money received from application:-
A applicant demand 2,00,000 shares allotted 1,00,000 shares = 1,00,000 × 3 = Rs. 3,00,000
Question 51.
Solution 51
Question 52.
Solution 52
Question 53.
Solution 53
Question 54.
Solution 54
Question 55.
Solution 55
(B)
Allotment amount due = 500 shares × Rs. 20 = Rs. 10,000
Less: Extra amount received = Rs. 5,000
Amount not due on allotment = Rs. 5,000
Question 56.
Solution 56
Question 57.
Solution 57
(B)
Allotment Amount due on 2,400 shares = 2,400 × Rs. 2.50 = Rs. 6,000
Less: Extra received on application from shares = Rs. 4,000
Amount not received on allotment = Rs. 2,000
(C)
Allotment Amount due on 1,00,000 shares = 1,00,000 × Rs. 2.50 = Rs. 2,50,000
Less: Extra received on application from shares = 35,000 × Rs. 2.50 = Rs. 87,500
Amount due on allotment = Rs. 1,62,500
Less: Amount not received on allotment = Rs. 2,000
Net Amount received = Rs. 1,60,500
Question 58.
Solution 58
Question 59.
Solution 59
(B)
Allotment Amount due on 400 shares = 400 × Rs. 4 = Rs. 1,600
Less: Extra received on application from shares = Rs. 600
Amount not received on allotment = Rs. 1,000
(C)
Allotment Amount due on 1,00,000 shares = 10,000 × Rs. 4 = Rs. 40,000
Less: Extra received on application from shares = Rs. 15,000
Amount due on allotment = Rs. 25,000
Less: Amount not received on allotment = Rs. 1,000
Net Amount received = Rs. 24,000
Question 60.
Solution 60
(B)
Allotment Amount due on 1,200 shares = 1,200 × Rs. 5 = Rs. 6,000
Less: Extra received on application from shares = Rs. 800
Amount not received on allotment = Rs. 5,200
(C)
Allotment Amount due on 60,000 shares = 60,000 × Rs. 5 = Rs. 3,00,000
Less: Extra received on application from shares = Rs. 40,000
Amount due on allotment = Rs. 2,60,000
Less: Amount not received on allotment = Rs. 5,200
Net Amount received = Rs. 2,54,800
Question 61.
Solution 61
(B)
Allotment Amount due on 1,500 shares = 1,500 × Rs. 5.50 = Rs. 8,250
Less: Extra received on application from shares = Rs. 1,750
Amount not received on allotment = Rs. 6,500
(C)
Allotment Amount due on 60,000 shares = 60,000 × Rs. 5.50 = Rs. 3,30,000
Less: Extra received on application from shares = Rs. 70,000
Amount due on allotment = Rs. 2,60,000
Less: Amount not received on allotment = Rs. 6,500
Net Amount received = Rs. 2,53,500
Question 62.
Solution 62
Question 63.
Solution 63
(B)
Allotment Amount due on 800 shares = 800 × Rs. 5 = Rs. 4,000
Less: Extra received on application from shares = Rs. 300
Amount not received on allotment = Rs. 3,700
(C)
Allotment Amount due on 3,20,000 shares = 3,20,000 × Rs. 5 = Rs. 16,00,000
Less: Extra received on application from shares = Rs. 1,20,000
Amount due on allotment = Rs. 14,80,000
Less: Amount not received on allotment = Rs. 3,700
Net Amount received = Rs. 14,76,300
Question 64.
Solution 64
(B)
Allotment Amount due on 800 shares = 800 × Rs. 5 = Rs. 4,000
Less: Extra received on application from shares = Rs. 1,000
Amount not received on allotment = Rs. 3,000
(C)
Allotment Amount due on 2,00,000 shares = 2,00,000 × Rs. 5 = Rs. 10,00,000
Less: Extra received on application from shares = Rs. 2,50,000
Amount due on allotment = Rs. 7,50,000
Less: Amount not received on allotment = Rs. 3,000
Net Amount received = Rs. 7,47,000
Question 65.
Solution 65
(B)
Allotment Amount due on 1,125 shares = 1,125 × Rs. 6 = Rs. 6,750
Less: Extra received on application from shares = Rs. 3,375
Amount not received on allotment = Rs. 3,370
(C)
Allotment Amount due on 75,000 shares = 75,000 × Rs. 6 = Rs. 4,50,000
Less: Extra received on application from shares = Rs. 2,25,000
Amount due on allotment = Rs. 2,25,000
Less: Amount not received on allotment = Rs. 3,375
Net Amount received = Rs. 2,21,625
Question 66.
Solution 66
Working Note:-
(A)
Extra shares = 600 – 400 = 200 shares
Extra Application money received = 200 × Rs. 4 = Rs. 800
Allotment Amount due on 400 shares = 400 × Rs. 5.50 = Rs. 2,200
Less: Extra received on application from shares = Rs. 800
Amount not received on allotment = Rs. 1,400
Question 67.
Solution 67
Working Note:-
(A)
Extra shares = 2,250 – 1,500 = 750 shares
Extra Application money received = 750 × Rs. 5 = Rs. 3,750
Allotment Amount due on 1,500 shares = 1,500 × Rs. 3 = Rs. 4,500
Less: Extra received on application from shares = Rs. 3,750
Amount not received on allotment = Rs. 750
Question 68.
Solution 68
(B)
Allotment Amount due on 600 shares = 600 × Rs. 3 = Rs. 1,800
Less: Extra received on application from shares = Rs. 600
Amount not received on allotment = Rs. 1,200
(C)
Allotment Amount due on 1,00,000 shares = 1,00,000 × Rs. 3 = Rs. 3,00,000
Less: Extra received on application from shares = Rs. 1,50,000
Amount due on allotment = Rs. 1,50,000
Less: Amount not received on allotment = Rs. 1,200
Net Amount received = Rs. 1,48,800
Question 69.
Solution 69
(B)
First and Final Amount due on 800 shares = 800 × Rs. 8 = Rs. 6,400
Less: Extra received on application from shares = Rs. 2,700
Amount not received on First and Final call = Rs. 3,700
(C)
First and Final Amount due on 4,00,000 shares = 4,00,000 × Rs. 8 = Rs. 32,00,000
Less: Extra received on application from shares = Rs. 13,50,000
Amount due on allotment = Rs. 18,50,000
Less: Amount not received on allotment = Rs. 3,700
Net Amount received = Rs. 18,46,300
Question 70.
Solution 70
Allotment amount due = 2,000 × Rs. 5 = Rs. 10,000
Less: Actual Amount for Application = = Rs. 3,000
Amount not received from Ganesh Rs. 7,000
Net Amount received on Allotment = Rs. 1,50,000 – Rs. 30,000 – Rs. 30,000 – Rs. 4,000 – Rs. 6,000
Net Amount received on Allotment = Rs. 79,000
Question 71.
Solution 71
Question 72.
Solution 72
Question 73.
Solution 73
Question 74.
Solution 74
(B)
Allotment Amount due on 1,000 shares = 1,000 × Rs. 5 = Rs. 5,000
Less: Extra received on application from shares = Rs. 2,400
Amount not received on allotment = Rs. 2,600
(C)
Allotment Amount due on 50,000 shares = 50,000 × Rs. 5 = Rs. 2,50,000
Less: Extra received on application from shares = Rs. 1,20,000
Amount due on allotment = Rs. 1,30,000
Less: Amount not received on allotment = Rs. 2,600
Net Amount received = Rs. 1,27,400
Question 75.
Solution 75
(B)
Allotment Amount due on 1,200 shares = 1,200 × Rs. 6 = Rs. 7,200
Less: Extra received on application from shares = Rs. 5,400
Amount not received on allotment = Rs. 1,800
(C)
Allotment Amount due on 40,000 shares = 40,000 × Rs. 6 = Rs. 2,40,000
Less: Extra received on application from shares = Rs. 1,80,000
Amount due on allotment = Rs. 60,000
Less: Amount not received on allotment = Rs. 1,800
Net Amount received = Rs. 58,200
Question 76.
Solution 76
Working Note:-
Excess application money received from Vinita:
Extra shares = 700 – 400 = 300 shares
Extra Application money received = 300 × Rs. 50 = Rs. 15,000
(ii) Amount Due from Vinita:-
Allotment Amount due on 400 shares = 400 × Rs. 70 = Rs. 28,000
Less: Extra received on application from shares = Rs. 15,000
Amount not received on allotment = Rs. 13,000
Question 77.
Solution 77
Question 78.
Solution 78
Question 79.
Solution 79
Question 80.
Solution 80
Question 81.
Solution 81
Question 82.
Solution 82
Question 83.
Solution 83
Question 84.
Solution 84
Question 85.
Solution 85
Question 86.
Solution 86
Question 87.
Solution 87
Question 88.
Solution 88
Question 89.
Solution 89
Question 90.
Solution 90
Question 91.
Solution 91
Question 92.
Solution 92
Question 93.
Solution 93
Question 94.
Solution 94
Question 95.
Solution 95
Question 96.
Solution 96
Question 97.
Solution 97
Question 98.
Solution 98
Question 99.
Solution 99
Question 100.
Solution 100
Question 101.
Solution 101
Question 102.
Solution 102
Question 103.
Solution 103
Question 104.
Solution 104
Question 105.
Solution 105
Question 106.
Solution 106
Question 107.
Solution 107
Question 108.
Solution 108
Question 109.
Solution 109
Question 110.
Solution 110
Question 111.
Solution 111
Question 112.
Solution 112
Question 113.
Solution 113
Question 114.
Solution 114
Question 115.
Solution 115
Question 116.
Solution 116
Question 117.
Solution 117
Question 118.
Solution 118
Question 119.
Solution 119
Question 120.
Solution 120
Premium is due with allotment and only Manu has not paid the amount of allotment. Therefore, Securities Premium Reserve account has been debited from the amount of premium due from Manu only i.e., 2,400 shares × Rs. 2= Rs. 4,800.
Question 121.
Solution 121
Question 122. .
Solution 122
Question 123.
Solution 123
Question 124.
Solution 124
Question 125.
Solution 125
Rs.
Total amount due on Allotment (including premium): 60,000 X Rs. 5 3,00,000
Less: (i) Excess money received in Application in Category A:
30,000 Shares- 20,000 Shares= 10,000 Shares X Rs. 3 30,000
(ii) Excess money received on Application in Category B:
50,000 Shares – 40,000 Shares = 10,000 Shares X Rs. 3 30,000
Question 126.
Solution 126
Question 127.
Solution 127
Question 128.
Solution 128
Question 129.
Solution 129
Question 130.
Solution 130
Working note:
Excess Shares applied from Dev = 2,500 shares – 1,000 shares = 1,500 Shares
Excess application money received from Dev = 1,500 shares × Rs. 15 = Rs. 22,500
Question 131.
Solution 131
Question 132.
Solution 132
