Accountancy > Accounting For Companies > Accounting For Share Capital

(a) Read the following hypothetical text and answer the questions:

P Limited was registered with an authorised capital of ₹ 50,00,000 divided into 5,00,000 equity shares of ₹ 10 each. The company offered 2,50,000 shares to the public for subscription. The amount was payable as follows:
On application: ₹ 3 per share
On allotment: ₹ 4 per share
On first and final call: ₹ 3 per share
Applications were received for 3,50,000 shares. Applications for 50,000 shares were rejected and pro-rata allotment was made to the remaining applicants. Excess application money was adjusted towards sums due on allotment.
Varun, who was allotted 5,000 shares failed to pay the first and final call money. His shares were forfeited. All the forfeited shares were reissued at ₹ 8 per share fully paid up.

Answer the following questions based on the above:
(i) The number of shares applied by Varun was:
(A) 5,000 (B) 6,000 (C) 7,000 (D) 4,000

(ii) The amount of 'Calls in Arrears' on Varun's shares was:
(A) ₹ 18,000 (B) ₹ 15,000 (C) ₹ 21,000 (D) ₹ 20,000

(iii) The amount of share forfeiture on Varun's shares was:
(A) ₹ 15,000 (B) ₹ 50,000 (C) ₹ 35,000 (D) ₹ 25,000

(iv) The amount transferred to 'Capital Reserve Account' was:
(A) ₹ 25,000 (B) ₹ 15,000 (C) ₹ 35,000 (D) ₹ 50,000

(v) The minimum price at which the company must have reissued the forfeited shares was:
(A) ₹ 10 (B) ₹ 8 (C) ₹ 7 (D) ₹ 3

(vi) The maximum discount which the company could have allowed on reissue of forfeited shares was:
(A) ₹ 3 (B) ₹ 7 (C) ₹ 10 (D) ₹ 8