5.

22 VINESH Target
Utimate Accountan
(d) 9,216
(a) 7.216 b) 8,216 c) 7.600

Question. 115

Yash Ltd. took the assets 4,80,000 and Liabilities of 80,000 of

over
of
Ltd. for a consideration
Raj
3,20,000. An amount of 7 20,000 paid by an acceptance in favour of Raj Ltd. payable after 3 months
eration oof
ths and the
balance by issue of equity shares of 7 100 each at a premium of s00.
Number of Shares to be issued:
(a) 1,800 (d) 2.400
(b) 2,000 (c) 2,200

Question. 116
When a company grants option to its employees to subseribe the shares at a price that Is lower than the
market price, this situation is called
Shares
(a) Preferential Allotment (b) Private Placement of
(c) Employees Stock Option Plan (ESOP) (d) Bonus Shares Issued to Employee

Question. 117
Identify the wrong statement from the
following:
(a) Employee Stock Option Plan is an option or a right granted by the company

Employee
(c)
Stock Option Plan is
not an obligation on employees to subscribe the shares
Employees may or may not accept the option of subscription
a) Employee Stock Option Plan is completely different from Sweat Equity Shares

Question. 118
Papa Ltd. offered to the public for subscription 80,000 Equity Shares payable per share as: 5 on Application
& Allotment; 7 3 on First Call and Balance on Second and Final Call. The issue was fully subscribed and all
amounts due were received except both calls money on 2,000 shares. These shares were forfeited.
Amount of Share Capital to be shown in the Balance Sheet:
(a) 7,90,000 (b) 7,80,000 (c) 7,60,000 (d) 8,00,000
Question. 119
Mother Ltd. invited application for 70,000 shares 30 each at
par and received applications for only 68,000
shares. All calls were made and duly received except the final call of 7 10
per share on 5,000 shares. These
shares were forfeited.
Amount of Share Capital to be shown in the Balance Sheet:
(a) 21,00,.000 b) 20,50,000 (c) 19,50,000 d) 19,90,000
Question. 120
Which of the following term will clearly def+ne, when
appropriation of a certain number of shares is made
to an applicant in response to his application?
(a) Share Allotment (b) Share Forfeiture (c) Bonus Shares (d) Refund of Money
 5.23
ting for are Capital
ACcoL

Question. 121
basis. The amount.
Vino Ltd. had allotted 10,000 sharesthe applicants of 13,000 shares
to
o n pro-rata

an application was 3 per share. Yash one shareholder who applied for 520 shares.allotment?
payable on applíca

alloted to him and how much of his excess amount adjusted towards
ow many shares were
Allotted 400 Shares and adjusted on allotment 7 400
(a)
Allotted 360 Shares and adjusted on allotment 7 400
Allotted 400 Shares and adjusted on allotment 1,200
Allotted 400 Shares and adjusted on allotment 7 360
Question. 122
Securities
of forfeiture of shares,
Premium the forfeited shares has
on
received, at the time
Ifthe already been
Reserve Account will be:
ren

(a) Fully Debited (b) Fully Credited

(c) No Treatment received amount will be debited

(a) Only
Question. 123
icatio n

issued 2,30,000 Equity Shares ofr 10each at a premium of Re.3 each payable as
7on
APpiicao
Yes Ltd.
(including premium) and balance First and final call, Applications were received for 3,50, 000
& Allotment
on
Call. Last call
on 1,000
towards
shares and company allotted them 2,50,000 shares. Excess money was applied
hares not received and these shares were forfeited.
which of the following is not part of the above situation?
(b) Pro-rata Allotment
(a) Over-subscription
(d) Under Subscription
(c) Forfeiture of Shares
Question. 124

time of forfeiture of shares?

What amount is shown in the 'Forfeiture Account' at the
Application money paid by the shareholder including premium
(a)
and allotment
(b) Amount not paid by the shareholder on application
amount utilised on premium
(c) Total amount paid by the shareholder including
the amount utilised on premium
(d) Total amount paid by the shareholder excluding
Question. 125

fully paid-up in consideration of the purchase

Vinod Limited issued 2,000 Equity Shares of 7 100
each as

Plant and Machinery worth 2,00,000.

Journal?
What entry will be recorded in company's
and Share Capital A/c Cr. with 2,00,000.
(a) Plant and Machinery A/c Dr.
A/c Cr. with 2,00,000
Vendor's A/c Dr and Plant and Machinery
(b)
Capital A/c Cr. With 1,50,000
(c) Vendor's A/c Dr. and Share
Share Capital A/c Cr. With 2,00,000
(d) Vendor's A/c Dr. and
 5.24 VINESH Target Ultimate Accountan

Question. 126
ntancy-X
A company forfeited 800 equity shares of 7 10 each issued at par for non-payment of two cal
calls of 7 2
What will be the amount
of forfeiture account?
(a) Share Forfeiture Alc Share Forfeiture
A/c 6,400
5,600 (b)
(c) Share Forfeiture Alc Share Forfeiture
A/c 4,000
4,800 (d)
Question. 127
Vinod Limited forfeited 100 equity shares ofR10 each issued at a premium of 20% for non-paymer
call of 5
nent of fina
including the premium.
What amount will be shown
by Share Forfeiure A/c?
(a) Share Forfeiture Alc 800 A/c 700
b) Share Forfeiture
(c) Share Forfeiture Alc 600 Alc 500
(d) Share Forfeiture
Question. 128
Od LAd.purchased a machine from Luxmi Machines Ltd. for t3,80,000. As per purchase agreemem
20,000 were paid in cash and balance
by
issue of of 7 100 each.
shares
How many shares to be issued to Luxmi Machines Ltd. if shares are issued at a premium of 20%?

(a) 4,000 (b) 3,0000 (d) 3,600

(c) 3,800

Question. 129
Vinod Limited offered 10,000 shares of T10 each for public subscription at a premium of 10%. Full amount
was payable on application. Applications were received for 15,000 shares and the Board decided to allot the
shares on pro-rata basis.
How much amount is to be refunded?
(a) 60,000 (b) 50,000 () 45,000 (d) 55,000
Question. 130
Vinod Limited purchased machinery for 7 30,00,000
from Suraj Limited. Half of the amount was
paid by
accepting a 'Bill of Exchange' drawn by Suraj Limited, payable after 3 months. The balance was paid by isue
of Equity Shares of 10 cach at a premium of 25%.
How many shares are to be issued?
(a) 1,00,000 Shares (b) 1,20,000 Shares (c) 1,50,000 Shares (d) 1,80,000 Shares
Question. 131
Vinod Limited purchased Furniture for 4,05,000 from Kisan Limited. The
payment was made by issue of
Equity Shares of 10 each. How many shares are to be issued?
(a) 50,000 Shares (b) 40,000 Shares (c) 40,500 Shares (d) 35,000 Shares
 5.25

for Share Captal

Ounting
Question. 132
of Share
amount
Account to
find out the
Notes to
132. W h a t correct order of Capitals is followed, while preparing
capital to be
shown in Balance Sheet!
Subscribed Capital, Issued Capital, Authorised Capital
(b) Issued Capital, Authorised Capital, Subscribed Capital
) Authorised Capital, Subscribed Capital, Issued Capital
dh Authorised Capital, Issued Capital, Subscribed Capital

TRUE AND FALSE

Question. 133
for buying assets or busins
o
is the Durchasing company
Consideration amount paid by the
Purchase
other company.

(b) False
(a) True

Question. 134

Employee Stock Option Plan

is a category of 'Sweat Equity'
b) False
(a) True

Question. 135

link with it.

Private Placement of Shares, means, General Public has no
(b) False
(a) True
Question. 136
called
company is
which be called up only on the winding up of the
The portion of uncalled capital, can

Reserve Capital.
(b) False
(a) True
Question. 137

but cannot be more than the Authorised Capital.

be less or equal to Authorised capital
Issued capital can
b) False
(a) True
Question. 138

shown in the Balance Sheet directly, it is deducted from the subscribed

Amount of Calls in Arrears is not
accounts for share capital.
capital while preparing notes to (b) False
(a) True
Question. 139

At the time of forfeiture of shares, the

share capital account is debited with the Called-Up Amount.
(b) False
(a) True
 5.26
VINESH Target
Uitimate

countancy-Xi
Accountane

Question. 140
the S E B l and not hu
fixed by oy the
issued, is
the shares
nm Subscription
um limit of at least 90% of
Companies Act, 2013.
(b) False
(a) True
Question. 141

of Rs 10
each which were
forfeited dh
lorfeited de
Ltd.reissued 800 (80% of the Forfeited shares) equity shares 1 2 each fully paid u
Gagan now
reissued for up a
call,
and first and final
0 n0n payment of allotment money

premiumn. Amount transferred to, capital Reserve 4,800. ofshares:

Alc at the time
of forfeiture
d t was the amount credited to Share Forfeiture (d) 7 3,840
(c)9,600

(a)6,000 (b) 4,800

Question. 142
of
of Rs 10 each
on non payment allotmen
shares) equity shares
Gagan Ltd.reissued 900 (75% of Forfeited
Amount transterred
to capital Reserve
final reissued for ? 7,200 fully paid up.
money and first and call, now

76,300. forfeiture of
shares:

credited to share forfeiture

A/e at the time of
what was the amount
(d)76,300
()10,800
(a) 6,000 b) Rs 8, 100
Question. 143

10 each at a Premium of 40%. Company

Ltd. invited applications of 45,000 Equity Shares of
Gagan Application 7(includingpremium of
Amount payable as follows:
on
received applications for 60,000 shares. One shareholder Megha who
Balance on first and final call.
2), on Allotment 7 3(including premium of 7 1),
shares failed to pay allotment and
first and final call money.
applied for 600
forfeiture of shares):
at the time of
Amount of share forfeiture (credited
(c) 3,150 (d) 4,200
(a) 3,300 (b) 2,2500
Question. 144

Allotment
payable as follows: Application 60;
7
issued 20,000 Equity Shares of T 100 each. Amount
Nyra Ltd. received an amount of 7 3,60,000 on
allotment.
first and final call. Company
7 20 and balance on
Received.
shares on which allotment money is not
Calculate number of (d) 20,000 shares
(c) 6,000 shares
(b) 2,000 shares
(a) 400 shares
Question. 145

250 shares
10,000 Equity Shares
of 10 each at a premium of 20%. Company has forfeited
Nyra Ltd. issued ofR5 (including premium),
first and final call of 7 3 is not yet called up.
amount
on non-payment allotment
of shares?
accountat the time of forfeiture of
amount to be shown in call-in-arrears
Calculate the
(c) 1,250 (d) 1,750
b) 2,000
(a) 2,500
 aunting for Share Capital 5.27

Question. 146
Ltd. forfeited 600 shareson is not yet called
amount, final call
Gagan

untpayable non-payment
-payment Allotment
of Allotment amount 7
of Rs 10);Allotment 40: first and final
as :On fio 40 cau
u p . A m o

Application (including full premium

30.
he time forfeiture
of forf of shares, Share Capital Account is to be debited with the called up amount per
s h a r e

(a) 30
b) 80 (c) 70 (d) 100

Question. 147
GN Ltd
forfeite 400 shares of 7 10 money has been
each at a premium of 40%. on which only application
r e c e i v e d .

Amount was payable as follows:

On Application..
*************************** . . . .
76 (including premium of Rs 2)
75 (Including premium of Rs 1)
On Allotment
**
. .

Balance. ***********. o n First and final call

Securities Premium is to be debited by forfeiture of shares)
(at the time of
(a) Debited by 7 400 Credited by 7 800
(b)
()Debitedby 1,600 (d) Debited by 7 800

Question. 148
Nyra Ltd. forfeited 500 shares of 10 each. Out of these forfeited shares 250 were reissued at 3,000
Calculate the Reissue price per share.
(a) 12 (b) Rs 6 (c)710 d)25

Question. 149

GN Lid. acquired a running business of Vinod Ltd. consisting Assets of 20,00,000 and creditors of
and
2,00,00, of 7 Bills Payable 3,00,00. Purchaseconsideration is settled
by a Bank draft of R 4,00,000
1,00,000 Equity Shares of 10 each at a premium of 7 2.
Amount of Goodwill/capital Reserve at the time of purchase of business
(a) Goodwill 1,00,000 b) Capital Reserve 1,00,000
(0) No Goodwill/No Capital Reserve (d) Capital Reserve 3,00,000

Question. 150

150. Gagan Ltd. invited applications of 45,000 Equity Shares of 10 each at a premium of 4. Company
received applications of 15,000in excess. Amount payable as follows: on ApplicationR 7 (inchuding premium of
2),on Allotment 73 (including premium of 7 ), Balance on first and final call. One shareholder Megha who
applied for 600 shares failed to pay allotment and first and final call money.
Amount of Securities Premium to be debited at the time of forfeiture of shares?
(a) Debited by 7 900 (6) Debited by 6500
(c) Debited by 7 450 (d) Debited by 750
 VINESH Target Uitimate Accoe
5.28

Question. 151
Accountancy
30,00,000 and
Assets of
Ltd.purchased running business of GN
a
5,00,000 at a purchase consideration of 23,00,000.
Ltd. consisting
abilities of
Amount ofCapital
iness
Reserve/Goodwill at the time of purchase oI 2,00,000 Capital Reserve
(a) 2,00,000 Goodwill (b) 7
Goodwill
(C)4,00,000 capital Reserve (d) 7 5,00,000

Question. 152

Aditya Ltd Purchased Machinery from Gagan Ltd. by paying as r o o s

Through Bank Draft... 7

* * * * * * * * * * * *
3,00,000
Through Bills Payable...
........ ***************. .71,00,000 or 4 .
at premium
Ealnng balance through 40,000 Equity Shares of 7 10
each a

Amount of Purchase consideration was

(c) 7,20,000 (d) 7,00,000
(a) 8,80,000 (b) 8,00,000
Question. 153

20 each, at 16 fully paid up. Amour

unt transfene
Gagan Ltd.
Reissued 600shares (50% offorfeited shares) of
to capital reserve 7 3,600.
(at the time of forfeiture)
Share Forfeiture Account will be credited with
(c) 12,000 (d) 2,400
(a) 2,400 (b) 6,000
Question. 154

Choose the incorrect option from the following:

(a) Bank A/c Dr.
Calls-in Arrears A/c Dr.
To First and Final Call A/c
First and Final call received except on 200 shares)
(Being
(b) Bank A/c Dr.
To Share Allotment A/c
To Calls-in-Advance A/c
Allotment money received with first and final call
on 200 shares)
(Being

Share Application Ac Dr.

(c)
To Share Allotment A/c
To Share Capital A/c
To Bank A/c

(Being Application money adjusted)

Share Capital A/c Dr.
(a)
To Bank A/c
To Share Forfeiture Alc
(Being reissue of forfeited shares)
 Accounting
for Share Capital 5.29

Question. 155
Nanak L t d . invited application
for 50,000 of 60%. Whole
amount
equity shares of 7 10 each at a premium
oble 000
application. The issue was over-subscribed hby 2.5 times of the issue. 25,000 applications
on were

over-subscribed
p a y a h ,

was
e d a n d mone efunded with sa letter
ney was refunded
rejec.
of regret.
Total nount refunded by the
(a) 2 . 5 0 , 0 0 0
company
(b) 4,00,000 (c) 12,00,000
(d) 7.50,000

Assertion & Reason Based Questions

Question. 156
Assertion (A):
portion o t U n c a e d Capital of a company to be called only in the event of winding up of the companuy, * *
4
as Reserve Capital,
Reason (R):
all the uncalled capital on the due date except the Reserve Capital because It will not be called
Company will call

ring
durin the
life time of the business. It will be called only the case of winding u
Choose the Correct Option from the following
(a) Assertion and Reason both are correct and Reason is the correct explanation of the assertion
() Assertion and Reason both are correct but Reason is not correct explanation of assertion
(c)Both Assertion and Reason are not correct
Assertion is
d Only correct

Question. 157

Assertion (A):
off the 'Share Issue Expenses.
Amount received on shares as 'Securities Premium' can be utilized to write

Reason (R): in the Section 52 (2) of the

Amount of Securities Premium can be utilized only for the purposes which are specified
Companies Act, 2013.
Choose the Correct Option from the following:
explanation of the assertion
(a) Assertion and Reason both are correct and Reason is the
correct

explanation of assertion
but Reason is not correct
(b) Assertion and Reason both are correct

(c) Both Assertion and Reason are not correct

(d) Only Assertion is correct

Question. 158

Assertion (A):
of the shares offered for subscription, in such a case, company
If a company receives subscription less than 90%
cannot issue shares and amount
received on application will be refunded to the applicants.

Reason (R) company must receive 90% or above subscription

As per the Companies Act, 2013, to issue shares to the public, a

of the shares offered for subscription.

 5.30 VINESH Target Ultimate Accos

Choose the Correct

countanoy
Option
from
(a) Assertion and Reason both arethe following:
correct and Reason is the correct explanation of the assertion

(b) Assertion and Reason both are correct but Reason is not correct explanation of assertion
(c) Both Assertion and
Reason are not correct
(d) Only Assertion is correct
Question. 159

Assertion (A):
ncorporation Expenses Account or Preliminary Expenses Account is to be opened when shares are js.en shares are
issued to
promoteR
Reason (R):
rendered to the company.
pany may issue shares to its promoters for their services
Choose the
Correct Option from the following: of the
assertion
O n and Reason both are correct and Reason is the correct explanation
or assertion
0) ASsertion and Reason both are correct but Reason is not correct explanation
(c) Both Assertion and Reason are not correct
(d) Only Assertion is correct

Question. 160

Assertion (A):
wnen a company purchase a running business of other company, and payment is settled by issue of shares, in ge
suh
a case, it purchase consideration is more than the net assets, then difference is debited tothe Goodwill Acco
Reason (R):
Goodwill is recorded in the books when some money or money's worth is paid for it.
Choose the Correct Option
from the following:
(a) Assertion and Reason both are correct and Reason is the correct explanation of the assertion
() Assertion and Reason both are correct but Reason is not correct explanation of assertion
(c) Both Assertion and Reason are not correct
(d) Only Assertion is correct

Question. 161
Assertion (A) :
When a running business of other company is purchased, and payment is setled by issue of shares, in such a case.
if purchase consideration is less than the net assets, then difference is credited to the Capital Reserve.

Reason (R):
Capital Reserve is a capital loss for the company.

Choose the Correct Option from the following:

(a) Assertion and Reason both are correct and Reason is the correct explanation of the assertion
b) Assertion and Reason both are correct but Reason is not correct explanation of assertion
(c) Both Assertion and Reason are not correct
(d) Only Assertion is correct