TOPPER’S CLASSES
CA- FOUNDATION (ACCOUNTS)
Topic: Companies Accounts Date: 16.06.2025
Time: 2 Hours Total Marks: 50
Question 1
A company had issued 20,000, 8% partly convertible debentures of ₹ 100 each on April 1, 2023. The
debentures are due for redemption on June 1, 2024. The terms of issue of debentures provided that
30% of the debentures will be converted into equity shares (Nominal Value ₹ 10) at a price of 20 per
share and remaining will be redeemable at a premium of 5%.
(i) Calculate the number of equity shares to be allotted to the debenture holders at the time of
conversion.
(ii) Give the necessary journal entries related to the conversion and redemption of debentures
assuming that the company has created the Debenture Redemption Reserve and also invested
required amount for redemption of debentures at the time of issue. Debenture Redemption
Reserve Investment are sold at par value. (5 Marks)
Question 2
Arpit Ltd., with an authorized capital of *₹ 20,00,000 divided into Equity shares of ₹ 10 each, on
1stJune, 2023, invited applications for issuing 3,00,000 Equity shares at a premium of ₹ 5 per share.
The amount was payable as follows:
On Application ₹ 2 per share
On Allotment (1st July, 2023) ₹ 7(including premium) per share
On First call (1st Nov,2023) ₹ 3 per share
On Final call (1st Jan,2024) ₹ 3 per share
All the shares were applied for and allotted. Mr. Naresh who held 20,000 shares paid the whole of
the amount due on calls along with allotment money. The final call was fully paid except a
shareholder having 5,000 shares who paid his due amount on 1st March, 2024 i.e. after 2 months
along with interest on calls in arrears @ 10% р.а. Company also paid interest @ 12%
p.a. on calls in advance to Mr. Naresh on 1st Jan., 2024.
Give journal entries with narrations to record all these transactions in the books of Arpit Ltd.
PS*: Please read authorized capital ₹ 20,00,000 as authorized capital 20,00,000
(15 Marks)
Question 3
P Limited issued 6,00,000 equity shares of ₹ 10 each at a premium of ₹ 2 per share, payable as ₹3
on application, ₹ 5 on allotment (including premium) and the balance in two calls of equal amount.
Applications were received for 8,00,000 shares and pro-rata allotment was made to all the applicants.
The excess application money was adjusted towards allotment. Harish to whom 1600 shares were
allotted failed to pay both calls and his shares were subsequently forfeited after second call. You are
required to pass journal entries in the books of P Limited and prepare bank account. (15 Marks)
1
Question 4
The following is the abstract of Balance Sheet Happy Ltd. as on 31st March,2024:
₹
Issued and paid-up capital
90,000 Equity shares of ₹ 10 each fully paid-up 9,00,000
Less: Calls–in–arrear (10,000 Equity shares of ₹ 2 each) 20,000 8,80,000
40,000 Equity shares of ₹ 10 each, ₹ 4 cash paid up 1,60,000
Reserves and Surplus:
Capital Reserve (realized in cash) 60,000
Capital Redemption Reserve 1,60,000
Securities Premium 1,00,000
General Reserve 1,20,000
Profit and Loss Account 7,00,000
On 1stApril, 2024. The company makes final call @ 6 each on 40000 equity shares. The call
money is duly received by 30th April,2024.
On 1st May,2024 the Board of Directors of the company decided:
(i) To forfeit the share on which final call of ₹ 2 each is due:
(ii) To re- issue the forfeited share @₹ 11 each as fully paid up:
(iii) To issue fully paid bonus shares in the ratio of one fully paid bonus share for every two fully
paid shares held; and
(iv) To use minimum balance of Profit and Loss Account.
Pass necessary journal entries in the books of the company on the basis of the above decisions.
(10 Marks)
Question 5
The Balance Sheet of XYZ as at 31st December, 2021 inter alia includes the following:
₹
50,000, 8% Preference Shares of ₹ 100 each, ₹ 70 paid up 35,00,000
1,00,000 Equity Shares of ₹ 100 each fully paid up 1,00,00,000
Securities Premium 5,00,000
Capital Redemption Reserve 20,00,000
General Reserve 50,00,000
Under the terms of their issue, the preference shares are redeemable on 31st March, 2022 at 5%
premium. In order to finance the redemption, the company makes a rights issue of 50,000 equity
shares of ₹ 100 each at ₹110 per share, ₹ 20 being payable on application, ₹ 35 (including premium)
on allotment and the balance on 1st January, 2023.
The issue was fully subscribed and allotment made on 1st March, 2022. The money due on allotment
were received by 31st March, 2022.
The preference shares were redeemed after fulfilling the necessary conditions of Section 55 of the
Companies Act, 2013.
You are asked to pass the necessary Journal Entries (Ignore date column). (5 Marks)
