CA (FOUNDATION)
ACCOUNTING
CHAPTER : BONUS ISSUE &
RIGHT ISSUE
CHAPTER-WISE TEST - 15 MARKS- 30
QUESTION PAPER DURATION- 50 MINUTES
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Q1. Following is the extract of the Balance Sheet of YY Ltd. as at 31st March, 2021:
Rs.
Authorised Capital
15,000 12% Preference shares of Rs.10 each 1,50,000
1,50,000 Equity shares of Rs.10 each 15,00,000
16,50,000
Issued and Subscribed Capital:
12,000 12% Preference Shares of Rs.10 each fully paid 1,20,000
1,35,000 Equity shares of Rs. 10 each, Rs. 8 paid up 10,80,000
Reserves and Surplus:
Capital Redemption Reserve 30,000
General Reserve 1,80,000
Capital Reserve 1,12,500
Securities Premium 37,500
Profit and Loss Account 2,70,000
Secured Loans:
12% Partly Convertible Debentures @ Rs.100 each 7,50,000
On 1st April, 2021 the Company has made final call @ 2 each on 1,35,000 equity shares. The call money was received by
20th April, 2021. Thereafter the company decided to capitalise its reserves by way of bonus at the rate of one share for
every four shares held. Securities premium of Rs.37,500 includes a premium of Rs.7,500 for shares issued to vendors
pursuant to a scheme of amalgamation. Capital reserves include Rs.60,0000, being profit on sales of plant and machinery.
20% of 12% Debentures are convertible into equity shares of Rs.10 each fully paid on 1st June 2021.
Required: Show necessary entries in the books of the company and prepare the extract of the Balance Sheet immediately
after bonus issue but before conversion of debentures. Are the convertible debenture holders entitled to bonus shares?
(10 Marks)
Q2. A Company is planning to raise funds by making rights issue of equity shares to finance its expansion. The existing
equity share capital of the company is Rs.50,00,000. The market value of its share is Rs.42. The company offers to its
shareholders the right to buy 2 shares at Rs.11 each for every 5 shares held. You are required to calculate:
(i) Theoretical market price after rights issue;
(ii) The value of rights; and
(iii) Percentage increase in share capital. (5 Marks)
Q3. MG Limited was registered on 1st January 2021 with an authorised capital of Rs.3,00,000 divided into 30000 equity
shares of Rs.10 each. During the next 12 months to 31st November 2021 following events occurred which related to the
share capital of the company.
On 1st January 2021 the company offered for subscription of 10,000 equity shares at a price of rupees 19 each,
to be paid as follows:
At the date of issue including premium Rs.10
On allotment Rs.4
On first and final call Rs.5
On 30th June 2021 the company made right issue on 1 for 2 basis at Rs.22.50 per share, payable in full on 10th July
2021.
Only 80% of the issue was subscribed for by the shareholders with a payment being made on the due date.
On 30th November 2021 Company decided to make a bonus issue of shares at par by utilising the entire balance of
securities premium account.
Prepare the equity share capital account and the securities premium account of the company for the year ended 31st
December 2021.
A share holder who had subscribed initially for 140 shares had subsequently taken up 80% of the right issue and then
received the bonus shares to which he was entitled.
Calculate the ultimate number of shares owned by him and the total price paid by him for those shares. (10 Marks)
Q4. NT Limited has an issued capital of 20000 equity shares of Rs.10 each fully called up.
The following decisions are taken by the company:
To forfeit 100 shares on which Rs.5 per share has been paid up and to be issue at Rs.15 per share as fully paid up. To issue
right shares in the ratio of 1 fully paid up shares for every 4 existing shares held, at Rs. 15 per share. Assuming that the
company has sufficient to general reserve, the above through journal entries. (5 Marks)
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