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Company Account Solution 2
Company Account Solution 2
TUTORIAL SOLUTION
COMPANY A/C
Table of Contents
QUESTION 1 .................................................................................................................................................. 1
QUESTION 2 .................................................................................................................................................. 3
WORKINGS QN 2 ....................................................................................................................................... 5
QUESTION 3 .................................................................................................................................................. 6
WORKINGS QN 3 ....................................................................................................................................... 8
QUESTION 4 .................................................................................................................................................. 9
WORKINGS QN 4 ..................................................................................................................................... 11
QUESTION 5 ................................................................................................................................................ 12
WORKINGS QN 5 ..................................................................................................................................... 14
QUESTION 6 ................................................................................................................................................ 15
QUESTION 1
SHARE CAPITAL A/C
DR
CR
SHARE FORFEITED
300,000
BAL c/d
5,625,000
5,925,000
CASH (4,000500)
APP& ALL
1st CALL
2nd CALL
2,000,000
2,400,000
800,000
725,000
5,925,000
CASH A/C
DR
SHARE CAPITAL
APP&ALL
APP&ALL
1st CALL
2nd CALL
CR
2,000,000
1,600,000
775,000
725000
600,000
5,700,000
BUILDING
2,000,000
BAL c/d
3,700,000
5,700,000
CR
2,400,000
CASH (8,000200)
CASH (7,750100)
CALL IN ARREARS(250100)
2,400,000
1,600,000
775,000
25,000
2,400,000
CALL IN ARREARS
DR
APP& ALL
1st CALL(750100)
2nd CALL
CR
25,000
75,000
125,000
225,000
SHARE FORFEITURE
100,000
BAL c/d
125,000
225,000
1ST CALL
DR
SHARE CAPITAL (8,000100)
CR
800,000
800,000
1
725,000
75,000
800,000
SHARE FORFEITURE
DR
CALL IN ARREARS
BAL c/d
CR
SHARE CAPITAL (750400)
100,000
200,000
300,000
300,000
300,000
2nd CALL
DR
SHARE CAPITAL (8,000-750)100
CR
CASH (7,250-1,250) 100
CALL IN ARREARS (1,25010)
725,000
725,000
600,000
125,000
725,000
BALANCE SHEET
ASSETS
BUILDING
2,000,000
CASH
3,700,000
CALL IN ARREARS
125,000
TOTAL ASSETS
5,825,000
5,625,000
SHARE FORFEITURE
200,000
5,825,000
QUESTION 2
Question had a minor correction: Application were received should be 75,000 and not 70,000. The
remaining applicant should be 15,000 and not 10,000.
SHARE CAPITAL A/C
DR
CR
SHARE FORFEITURE
360,000
BAL c/d
5,000,000
5,360,000
APP& ALL
1st CALL
2nd CALL
SHARE FORFEITED REISSUE
2,500,000
1,000,000
1,500,000
360,000
5,360,000
CR
CASH (75,00020)
CASH (NOTE 1)
CALL IN ARREARS(NOTE 2)
400,000
2,500,000
1,000,000
3,900,000
1,500,000
2,236,000
164,000
3,900,000
CASH A/C
DR
APP&ALL
APP&ALL
1st CALL
2nd CALL
SHARE FORFEITED REISSUE
CR
1,500,000
2,236,000
928,000
1,392,000
288,000
6,344,000
APP&ALL
400,000
BAL c/d
5,944,000
7,272,000
SHARE PREMIUM
DR
SHARE FORFEITURE
BAL c/d
CR
72,000
944,000
1,016,000
APP&ALL
SHARE FORFEITED REISSUE
1,000,000
16,000
1,016,000
CALL IN ARREARS
DR
APP& ALL (NOTE 2)
1st CALL
2nd CALL
CR
164,000
72,000
108,000
344,000
SHARE FORFEITURE
344,000
344,000
1ST CALL
DR
SHARE CAPITAL (50,00020)
CR
CASH (46,40020)
CALL IN ARREARS(3,60020)
1,000,000
1,000,000
928,000
72,000
1,000,000
2nd CALL
DR
SHARE CAPITAL (50,00050)
CR
CASH (46,40030)
CALL IN ARREARS (3,60030)
1,500,000
1,500,000
1,392,000
108,000
1,500,000
SHARE FORFEITURE
DR
CALL IN ARREARS
SHARE FORFEITED REISSUE
CR
SHARE CAPITAL (NOTE 3)
SHARE PREMIUM (3,60020)
344,000
88,000
432,000
360,000
72,000
432,000
CR
360,000
16,000
376,000
CASH (803,600)
SHARE FORFEITURE (NOTE 4)
288,000
88,000
376,000
BALANCE SHEET
ASSETS
CASH
5,944,000
TOTAL ASSETS
5,944,000
5,000,000
SHARE PREMIUM
944,000
5,944,000
WORKINGS QN 2
NOTE 1
Share prorate ratio will be: 10,000 15,000
This is because 40,000 shares were issued at full therefore they wont belong to share which were issued
on prorate 10,000 shares. For call in Arrears 1,600 shares will be dealt in 10,000 shares because this
shares were in prorate and 2,000 shares will be dealt in 40,000 shares.
Note: Call in Arrears only differs on allotment stage therefore for 1st and final call (2nd call) there will be
treated as the same (The wont be differentiated). Also excess share will always be the amount of paid
on application.
Cash received
Cash on shares issued fully
(40,000-2000)50 = 1,900,000
Cash on prorate shares
On finding cash received from prorate shares we should find excess shares 1st
10,000shares = 15,000shares
8,400share =? Share
8,40015,000
10,000
= 12,600shares
1,60015,000
10,000
= 2,400shares
QUESTION 3
SHARE CAPITAL A/C
DR
CR
SHARE FORFEITED
80,000
BAL c/d
9,980,000
10,060,000
CASH
APPL & ALL
1st CALL
2nd CALL
SHARE RE-ISSUE
6,000,000
2,280,000
1,080,000
640,000
60,000
10,060,000
CR
CASH (70,00025)
CASH (NOTE 1)
CALL IN ARREARS(NOTE 2)
500,000
2,280,000
640,000
3,420,000
1,750,000
1,636,600
33,400
3,420,000
CASH A/C
DR
SHARE CAPITAL (60,000100)
APP&ALL
APP&ALL
CALL IN ADVANCE(600(27+16)
1st CALL
2nd CALL
SHARE FORFEITED REISSUE
CR
6,000,000
1,750,000
1,636,600
25,800
1,042,200
617,600
45,000
11,117,200
APP&ALL
500,000
BAL c/d
10,617,200
11,117,200
SHARE PREMIUM
DR
SHARE FORFEITURE
BAL c/d
CR
12,800
630,950
643,750
APP&ALL
SHARE FORFIETED REISSUE
640,000
3,750
643,750
CALL IN ARREARS
DR
APP& ALL (NOTE 2)
1st CALL
2nd CALL
CR
33,400
21,600
12,800
67,800
SHARE FORFEITURE
67,800
67,800
CALL IN ADVANCE
DR
st
1 CALL
2nd CALL
CR
16,200
9,600
25,800
CASH
25,800
25,800
1ST CALL
DR
SHARE CAPITAL
CR
1,080,000
CASH
CALL IN ARREARS
CALL IN ADVANCE
1,042,200
21,600
16,200
1,080,000
1,080,000
2nd CALL
DR
SHARE CAPITAL
CR
640,000
CASH
CALL IN ARREARS
CALL IN ADVANCE
640,000
7
617,600
12,800
9,600
640,000
SHARE FORFEITURE
DR
CALL IN ARREARS
SHARE FORFEITED REISSUE
BAL c/d
CR
SHARE CAPITAL (800100)
SHARE PREMIUM
67,800
18,750
6,250
92,800
80,000
12,800
92,800
CR
CASH (60075)
SHARE FORFEITURE (NOTE 3)
60,000
3,750
63,750
45,000
18,750
63,750
BALANCE SHEET
ASSETS
CASH
10,617,200
TOTAL ASSETS
10,617,200
9,980,000
SHARE PREMIUM
630,950
SHARE FORFEITURE
6,250
10,617,200
WORKINGS QN 3
NOTE 1
40,000 50,000
39,20050,000= 49,000
39,200 - ?
40,000
49,000-39,200=9,800
80025=20,000
1,636,600
800=20,000
NOTE 2
40,000 50,000
800
NOTE 3
80050,000= 1,000
-?
40,000
600=? (15,000)
GAIN ON REISSUE
40,000-50,000
15,000-? (18,750)
200 25 = (5,000)
33,400
QUESTION 4
SHARE CAPITAL A/C
DR
CR
SHARE FORFEITED
28,000
BAL c/d
980,000
1,008,000
500,000
200,000
288,000
20,000
1,008,000
CR
120,000
500,000
200,000
820,000
CASH (18,00020)
CASH (NOTE 1)
CALL IN ARREARS(NOTE 2)
360,000
441,600
18,400
820,000
CASH A/C
DR
APP&ALL
APP&ALL(NOTE 1)
CALL IN ADVANCE((20+30) 200)
1st CALL
2nd CALL
SHARE FORFEITED REISSUE
CR
360,000
441,600
10,000
182,000
267,000
16,000
1,276,600
9
APP&ALL
120,000
BAL c/d
1,156,600
1,276,600
SHARE PREMIUM
DR
SHARE FORFEITURE
BAL c/d
CR
8,000
192,800
200,800
APP&ALL
SHARE FORFEITED REISSUE
200,000
800
200,800
CALL IN ARREARS
DR
APP& ALL (NOTE 2)
1st CALL
2nd CALL
CR
SHARE FORFEITURE((20400)+18,400)
18,400
14,000
15,000
47,400
BAL c/d
26,400
21,000
47,400
CALL IN ADVANCE
DR
st
1 CALL
2nd CALL
CR
4,000
6,000
10,000
CASH
10,000
10,000
1ST CALL
DR
SHARE CAPITAL
CR
200,000
CASH
CALL IN ARREARS
CALL IN ADVANCE
182,000
14,000
4,000
200,000
200,000
SHARE FORFEITURE
DR
CALL IN ARREARS
SHARE FORFEITED REISSUE(NOTE 3)
BAL c/d
26,400
4,800
4,800
36,000
CR
SHARE CAPITAL (40070)
SHARE PREMIUM
28,000
8,000
36,000
CR
20,000
800
20,800
CASH (20080)
SHARE FORFEITURE
10
16,000
4,800
20,800
2nd CALL
DR
SHARE CAPITAL
CR
288,000
CASH
CALL IN ARREARS
CALL IN ADVANCE
288,000
267,000
15,000
6,000
288,000
BALANCE SHEET
ASSETS
CASH
1,156,600
CALL IN ARREARS
21,000
TOTAL ASSETS
1,177,600
980,000
SHARE PREMIUM
192,800
SHARE FORFEITURE
4,800
1,177,600
WORKINGS QN 4
NOTE: In this question the director decided to forfeiture share that were in arrears for both allotment
and first call there you should be careful in dealing with such questions for this only 400 shares were
arrears on allotment and the other calls mind you it will differ if the director decided to forfeiture shares
that were in arrears for both calls this would make of 400 & 300 shares because if a person fails to pay
for allotment automatically he wont be able to pay for the other calls.
NOTE 1
10,000 12,000
9,60012,000= 11,520
9,600 - ?
10,000
11
9,60050= 480,000
1,920 20 = (38,400)
11,520-9,600=1,920
441,600
NOTE 3
NOTE 2
400*20=8,000
10,000 12,000
400
40012,000= 480
-?
10,000
40050= 20,000
400=800
200=? (4,000)
To get gain
480-400= 80
10,000=12,000
80 20 = (1,600)
4,000=? (4,800)
18,400
QUESTION 5
SHARE CAPITAL A/C
DR
CR
SHARE FORFEITED
81,000
BAL c/d
9,955,000
10,036,000
CASH
APPL & ALL
1st CALL
2nd CALL
SHARE RE-ISSUE
6,000,000
2,800,000
800,000
391,000
45,000
10,036,000
300,000
2,800,000
CR
CASH
SHARE DISCOUNT
CASH (NOTE 1)
CALL IN ARREARS(NOTE 2)
3,100,000
1,200,000
400,000
1,482,000
18,000
3,100,000
CASH A/C
DR
SHARE CAPITAL
APP&ALL
APP&ALL(NOTE 1)
CALL IN ADVANCE
1st CALL
SHARE FORFEITED REISSUE
2nd CALL
CR
6,000,000
1,200,000
1,482,000
15,000
772,000
36,000
386,000
9,891,000
APP&ALL
300,000
BAL c/d
9,591,000
9,891,000
12
SHARE DISCOUNT
DR
APP&ALL
CR
400,000
SHARE FORFEITURE
BAL c/d
9,000
391,000
400,000
400,000
CALL IN ARREARS
DR
APP& ALL (NOTE 2)
1st CALL
CR
18,000
18,000
36,000
SHARE FORFEITURE
36,000
36,000
CALL IN ADVANCE
DR
1st CALL
2nd CALL
CR
10,000
5,000
15,000
CASH
15,000
15,000
1ST CALL
DR
SHARE CAPITAL
CR
800,000
CASH
CALL IN ARREARS
CALL IN ADVANCE
772,000
18,000
10,000
800,000
800,000
SHARE FORFEITURE
DR
SHARE DISCOUNT
CALL IN ARREARS
SHARE FORFEITED REISSUE
BAL c/d
CR
9,000
36,000
22,500
13,500
81,000
SHARE CAPITAL
81,000
81,000
45,000
13,500
58,500
CR
CASH
SHARE FORFEITURE (NOTE 3)
13
36,000
22,500
58,500
SHARE PREMIUM
DR
BAL c/d
CR
SHARE FORFEITURE REISSUE
13,500
13,500
13,500
13,500
2nd CALL
DR
SHARE CAPITAL
CR
391,000
CASH
CALL IN ADVANCE
391,000
386,000
5,000
391,000
BALANCE SHEET
ASSETS
CASH
9,591,000
TOTAL ASSETS
9,591,000
9,955,000
SHARE PREMIUM
13,500
SHARE DISCOUNT
(391,000)
SHARE FORFEITURE
13,500
9,591,000
WORKINGS QN 5
NOTE 1
30,00040=1,200,000
10,000 15,000
9,40015,000= 14,100
9,400 - ?
10,000
9,40040= 376,000
4,700 20 = (94,000)
14,100-9,400=4,700
282,000
TOTAL CASH: 1,200,000+282,000=1,482,000
14
NOTE 2
10,000 15,000
600
60015,000= 900
-?
10,000
60040= 24,000
900-600= 300
300 20 = (6,000)
18,000
NOTE 3 (TRANSFER OF GAIN)
1) 40020=8,000
300 (20+40) = 18,000
20070=4,000
30,000
2) 900-30,000
450-? (15,000)
3) 10,000-15,000
15,000-? (22,500)
QUESTION 6
SHARE CAPITAL A/C
DR
CR
SHARE FORFEITED
27,000
BAL c/d
19,985,000
20,012,000
12,000,000
6,000,000
1,997,000
15,000
20,012,000
CR
12,000,000
4,000,000
CASH
CASH
CALL IN ARREARS
16,000,000
15
4,000,000
11,982,000
18,000
16,000,000
CASH A/C
DR
APP&ALL
APP&ALL
CALL IN ADVANCE
1st CALL
SHARE FORFEITED REISSUE
2nd CALL
CR
4,000,000
11,982,000
24,000
5,967,000
13,500
1,989,000
BAL c/d
23,975,500
23,975,500
23,975,500
SHARE PREMIUM
DR
SHARE FORFEITURE
BAL c/d
6,000
3,995,500
4,001,500
CR
APP&ALL
SHARE FORFEITED REISSUE
4,000,000
1,500
4,001,500
CALL IN ARREARS
DR
APP& ALL
1st CALL
2ndCALL
CR
18,000
15,000
2,000
35,000
SHARE FORFEITURE
27,000
BAL c/d
8,000
35,000
CALL IN ADVANCE
DR
1st CALL
2nd CALL
CR
18,000
6,000
24,000
CASH
24,000
24,000
1ST CALL
DR
SHARE CAPITAL
CR
6,000,000
CASH
CALL IN ARREARS
CALL IN ADVANCE
5,967,000
15,000
18,000
6,000,000
6,000,000
SHARE FORFEITURE
DR
CALL IN ARREARS
SHARE FORFEITED REISSUE
CR
27,000
3,000
SHARE CAPITAL
SHARE PREMIUM
16
27,000
6,000
BAL c/d
3,000
33,000
33,000
CR
15,000
1,500
16,500
CASH
SHARE FORFEITURE
13,500
3,000
16,500
2nd CALL
DR
SHARE CAPITAL
CR
1,997,000
CASH
CALL IN ADVANCE
CALL IN ARREARS
1,997,000
1,989,000
6,000
2,000
1,997,000
BALANCE SHEET
ASSETS
CASH
23,975,500
CALL IN ARREARS
8,000
TOTAL ASSETS
23,983,500
19,985,000
SHARE PREMIUM
3,995,500
SHARE FORFEITURE
3,000
23,983,500
17