1) The Balance Sheet of Amar Ltd.

as at 31st March 2013 is as follows:

Liabilities

Assets

Rs.

Rs.

Share Capital:

Land and Building

6,00,000

Issued and fully paid 3,000 9%

redeemable

Plant and machinery

1,50,000

Preference shares of Rs.100 each

3,00,000 Furniture

45,000 equity shares of Rs. 10 each

4,50,000 Investments

Reserves and Surplus:

Stock

General Reserve

1,50,000 Debtors

Share Premium

60,000 Bank

Profit & Loss A/c

27,000
1,68,000
1,50,000
45,000
1,20,000

1,20,000

Current Liabilities:
Sundry creditors

1,80,000
12,60,000

12,60,000

The Company decided to redeem its preference shares at a premium of 5% on 31 stMarch, 2013.
A fresh issue of 6,000 equity shares of Rs.10 each was made at Rs.12 per share payable in full on
31-3-2013. These shares were fully subscribed and all monies were duly collected. All the investments
were sold realizing Rs. 1,62,000. The directors wish that only a minimum reduction should be made in the

revenue reserves. You are required to give the Journal Entries, including those relating to cash, to record
the above transactions and draw up the Balance Sheet as it would appear after redemption of preference
shares.

Q2) A Ltd. with an authorized capital of Rs. 20,00,000 offered to public 1,00,000 Equity Shares of Rs. 10
each payable as Rs. 2 on application & Rs. 2 on allotment. The balance in three equal calls of Rs. 2 each.

The Company received application for 80,000 shares only. All applications were accepted.

One shareholder holding 800 shares did not pay 1 st call. After completing legal formalities, BOD forfeited
these shares.

Consequently, 2nd call was made on 19,200 shares only, which was duly received in full.

Then the Board of Directors reissued 75% of the forfeited shares having Face Value of Rs. 8 at Rs. 7 per
share. Final call was made after reissue of total money due was received before last date fixed and
payment of call. Journalise.

Q3) Z Ltd. Co. Ltd. Took over assets of Rs.60,00,000 & Liabilities of Rs. 33,50,000 of X Co Ltd for the
purchase consideration of Rs. 26,25,000. Z Co Ltd paid the purchase consideration by issuing debentures
of Rs. 100 each at a 5% premium. Give Journal entries in the books of Z co
ltd.

Q4) Unique Ltd. Company presents you with the following

Balance Sheet as on 31st March 2013

Liabilities
Share Capital:

Rs.

Assets
Goodwill

Rs.
30,000

Equity Share of Rs. 100 each fully

paid

2,00,000

Land & Building

7% Preferences Shares of Rs.100 each

1,50,000

Plant & Machinery

Profit Prior to Incorporation

5,000

Patents
Stock

75,000

1,50,000
15,000

6% Debentures

1,50,000

Sundry Creditors

1,00,000 Sundry Debtors

75,000

Cash

2,500

Preliminary Expenses
Profit & Loss A/c
6,05,000

1,10,000

12,500
1,35,000
6,05,000

The following scheme of reconstruction was duly approved:

1. 7% Preference Shares be converted into 9% Preference Shares, the amount being reduced by 30%.
2. Equity shares be reduced to fully paid shares of Rs.50 each.
3. Land and Building be appreciated by 20%.
4. Debentures be reduced by 20%.
5. All intangible assets and fictitious amounts including Patents be written off. Utilise profit prior to
incorporation, if necessary.
Q5) Discuss in detail - Important characteristics of a joint stock company. Also, distinguish between
Private Ltd & Public Ltd Company.