Practice Questions - Issue, forfeiture, reissue and valuation of rights

1.       The Bharat Trading Co. Ltd with a registered capital of Rs.100000 issued 5000 equity shares of Rs.10 each payable Rs.2 on application, Rs.2 on allotment, Rs.3 on first call and Rs.3 on final call. Pass journal entries assuming the shares issued were fully subscribed and the money has been received. 2.      P Ltd issued a prospectus inviting applications for 100000 equity shares of Rs.10 each, payable as Rs.2 with application, Rs.3 on allotment and the balance...

Read More

Journal Entries - Issue of Shares

Journal Entries for Issue of Shares 1 1.       On receipt of application money                 Bank A/c                                              Dr ( for the full amount received...

Read More

Equivalent Units

The Concept of equivalent units is used in process costing. Process costing is used when the manufacturing of product consists of several  repetitive processes and the products are homogeneous. The output of preceding process will be the input of succeeding process. The inputs like raw material, labor will be added into the processes at different time intervals as per the requirement Equivalent unit is the expression of partly completed unit (work in progress) in to a notional quantity of completed...

Read More

UNDERWRITING OF SHARES AND DEBENTURES

Underwriting is an agreement where by the underwriters ensure the company that in case the shares and debentures offered to the public, are not subscribed by the public to the extent, the balance of shares and debentures will be taken up by the underwriters. The firms or persons who are engaged in underwriting are called underwriters. The commission payable to underwriters for underwriting is known as underwriting commission. Advantages of Underwriting 1. The company is sure of getting the value of shares issued 2. It...

Read More