Following is the extract of the Balance Sheet of Prasann Ltd. (an unlisted company) as on 31st March, 2018: PARTICULARS ₹ Authorised Capital : 12,000 10% Preference shares of ₹100 each 12,00,000 2,00,000 Equity shares of
CS Executive · Company Accounts & Auditing Practices · PYQS · June 2019
Following is the extract of the Balance Sheet of Prasann Ltd. (an unlisted company) as on 31st March, 2018: PARTICULARS ₹ Authorised Capital : 12,000 10% Preference shares of ₹100 each 12,00,000 2,00,000 Equity shares of ₹10 each 20,00,000 32,00,000 Issued, subscribed and paid up Capital: 12,000 10% Preference shares of ₹100 each fully paid up 12,00,000 1,20,000 Equity shares of ₹10 each ₹8 paid up 9,60,000 Reserves and Surplus : Securities Premium (Collected otherwise than in Cash) 50,000 Capital Redemption Reserve 75,000 General Reserve 2,25,000 Profit & Loss (Surplus) 3,50,000 On 1st April, 2018, the company made final call @ ₹2 per share on 1,20,000 equity shares. The call money was received by 20th April, 2018. Thereafter, the company decided to capitalize its reserves by way of bonus issue at the rate of one share for every three shares held. It was decided that there should be the minimum reduction in the balance of profit and loss (Surplus). Show necessary journal entries in the books of the company and prepare the extract of the Balance Sheet as on 30th April, 2018 after bonus issue.
Answer & Explanation:
Journal Entries in the Books of Prasam Ltd. Date Particulars L.F. Amount ₹ (Dr.) Amount ₹ (Cr.) 01.04.2018 Equity Share final call A/c Dr. 2,40,000 To Equity Share Capital A/c 2,40,000 (Being final call of ₹2 per share on 120000 shares due as per bond's resolution) 20.04.2018 Bank A/c Dr. 2,40,000 To Equity Share final call A/c 2,40,000 (Equity Share final call money received) 20.04.2018 Securities Premium A/c Dr. 50,000 Capital Redemption Reserve A/c Dr. 75,000 General Reserve A/c Dr. 2,25,000 Profit and Loss A/c Dr. 50,000 To Bonus to Share Holder A/c 4,00,000 (Being Provided for bonus issue of one equity shares for every three shares held) 20.04.2018 Bonus to Shareholders A/c Dr. 4,00,000 To Equity Share Capital A/c 4,00,000 (Being Bonus Shares Issued) Extract of Balance Sheet of Prasann Ltd. as at 30th April, 2018 (After Bonus Issue) Particulars Amount (₹) Authorised Capital : 12,000 10% Preference Shares @ ₹100 each 12,00,000 2,00,000 Equity Shares of ₹10 each 20,00,000 32,00,000 Issued, Subscribed and Paid up Capital 12000 10% Preference Shares @ ₹100 each fully paid up 12,00,000 160000 Equity Shares of ₹10 each fully paid up 16,00,000 (out of above, 40000 equity shares of ₹10 each fully paid up were issued by way of bonus issue) 28,00,000 Reserve and Surplus Profit and Loss (Surplus) 3,00,000
Topics: Bonus Issue
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