2015/2016

TUTORIAL SOLUTION
COMPANY A/C

This are solution for tutorial questions on company

account that will guide you in dealing with such question.
Consult your lecture if there is any mistake in this solution.

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

APPLICATION & ALLOTMENT

DR
SHARE CAPITAL(8,000300)

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

CASH (8000-750) 100

CALL IN ARREARS

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

LIABILITIES & EQUITY

SHARE CAPITAL

5,625,000

SHARE FORFEITURE

200,000

TOTAL LIABILITIES & EQUITY

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

APPLICATION & ALLOTMENT

DR
CASH(20,00020)
SHARE CAPITAL (5050,000)
SHARE PREMIUM(2050,000)

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

SHARE FORFEITURE REISSUE

DR
SHARE CAPITAL(3,600100)
SHARE PREMIUM

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

LIABILITIES & EQUITY

SHARE CAPITAL

5,000,000

SHARE PREMIUM

944,000

TOTAL LIABILITIES & EQUITY

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

excess share: 12,600-8,400= 4,200 shares

2nd find cash from prorate shares and total cash

8,400 50= 420,000

Total cash: 1,900,000+336,000=2,236,000

4,200 20= (84,000)

336,000
NOTE 2
Call in Arrears
Call in Arrears on shares issued fully
2,00050= 100,000
Cash on prorate shares
Call in Arrears on prorate shares we should find excess shares 1st
10,000shares = 15,000shares
1,600share =? Share

1,60015,000
10,000

= 2,400shares

excess share: 2,400- 1,600= 800 shares

2nd find cash from prorate shares and total cash

1,600 50= 80,000

Total call in Arrears: 100,000+64,000=164,000

800 20= (16,000)

64,000
NOTE 3
To forfeit share capital you have to recognize the forfeited shares on all places where shares were included
in the share capital that is why we add application, allotment (exclude premium), 1st call & 2nd call money.
Share forfeited: 20+30+20+30=100
1003,600=360,000
NOTE 4
To calculate transfer of gain the 1st step you should calculate how much money did the forfeited shares
has paid until the time of forfeiture.
For 2,000 20 =40,000 : Therefore the 2,000shares only paid application money.
For 1,600 20= 32,000 : also 1,600shares paid only application money but remember this shares were
allotted on prorate basis therefore they had excess gain within we have to find out what is that excess.
10,000-15,000
32,000-? (48,000)
Total gain to be transferred: 48,000+40,000=88,000

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

APPLICATION & ALLOTMENT

DR
CASH(20,00025)
SHARE CAPITAL
SHARE PREMIUM

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

SHARE FORFEITURE REISSUE

DR
SHARE CAPITAL(600100)
SHARE PREMIUM

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

LIABILITIES & EQUITY

SHARE CAPITAL

9,980,000

SHARE PREMIUM

630,950

SHARE FORFEITURE

6,250

TOTAL LIABILITIES & EQUITY

10,617,200

WORKINGS QN 3
NOTE 1

40,000 50,000

39,20050,000= 49,000

39,200 - ?

40,000

39,200 48= 1,881,600

9,800 25 = (245,000)

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

800 48= 38,400

15,000-? (18,750)

200 25 = (5,000)
33,400

QUESTION 4
SHARE CAPITAL A/C
DR

CR

SHARE FORFEITED

28,000

APPL & ALL

1st CALL
2nd CALL
SHARE RE-ISSUE

BAL c/d

980,000
1,008,000

500,000
200,000
288,000
20,000
1,008,000

APPLICATION & ALLOTMENT

DR
CASH(600020)
SHARE CAPITAL (5010,000)
SHARE PREMIUM(2010,000)

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

SHARE FORFEITURE REISSUE

DR
SHARE CAPITAL(200100)
SHARE PREMIUM

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

LIABILITIES & EQUITY

SHARE CAPITAL

980,000

SHARE PREMIUM

192,800

SHARE FORFEITURE

4,800

TOTAL LIABILITIES & EQUITY

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

APPLICATION & ALLOTMENT

DR
CASH
SHARE CAPITAL

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

SHARE FORFEITURE REISSUE

DR
SHARE CAPITAL
SHARE PREMIUM

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

LIABILITIES & EQUITY

SHARE CAPITAL

9,955,000

SHARE PREMIUM

13,500

SHARE DISCOUNT

(391,000)

SHARE FORFEITURE

13,500

TOTAL LIABILITIES & EQUITY

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

APPL & ALL

1st CALL
2nd CALL
SHARE RE-ISSUE

BAL c/d

19,985,000
20,012,000

12,000,000
6,000,000
1,997,000
15,000
20,012,000

APPLICATION & ALLOTMENT

DR
SHARE CAPITAL
SHARE PREMIUM

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

SHARE FORFEITURE REISSUE

DR
SHARE CAPITAL
SHARE PREMIUM

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

LIABILITIES & EQUITY

SHARE CAPITAL

19,985,000

SHARE PREMIUM

3,995,500

SHARE FORFEITURE

3,000

TOTAL LIABILITIES & EQUITY

23,983,500

17