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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Question no 11 Chapter 1 - Class 12 Part 2 Unimax
Bharat Limited purchases certain patents from Sharp and short under an agreement dated the June 30, 2022 at a cost of ₹ 40,000 which was paid ₹ 1,000 in cash to the vendors and the balance in fully paid equity shares of ₹ 10 each.
Including the shares allotted as fully paid to the vendors, the company issued capital to the extent of ₹ 75,000 consisting of ₹ 50,000 in equity shares of ₹ 10 each ( ₹ 3 on application, ₹ 3 on allotment and ₹ 4 at the end end of three months) and ₹ 25,000 in 10% preference shares of ₹ 10 each ( ₹ 4 on application, ₹ 3 on allotment and ₹ 3 at the end of three months).
Under the agreement with sharp and short, the patents passed to the company on July 9, 2022 on which all the shares were allotted to the public also. All the shares issued to the public were fully subscribed and all the money called duly received.
All cash paid direct to company’s bankers.
Record journal entries.
| Date | Particulars |
L.F. | Debit | Credit | |
|---|---|---|---|---|---|
| July 9 | Patents A/c | Dr. | 40,000 | ||
| To M/s sharp and Short A/c | 40,000 | ||||
| (Being Patents purchased) | |||||
| July 9 | M/s sharp and Short A/c | Dr. | 40,000 | ||
| To Equity share capital A/c | 39,000 | ||||
| To Cash A/c | 1,000 | ||||
| (Being 3900 equity shares of ₹ 10 each issued to Vendor) | |||||
| July 9 | Equity share Application A/c | Dr. | 3,300 | ||
| To Equity share capital A/c | 3,300 | ||||
| (Being application money due on 1100 equity shares @ ₹ 3 and balance transfer to share capital A/c) | |||||
| July 9 | Preference share application A/c | Dr. | 10,000 | ||
| To 10% Preference share capital A/c | 10,000 | ||||
| (Being preference share application A/c transferred to 10% preference share capital A/c) | |||||
| July 9 | Equity share Allotment A/c | Dr. | 3,300 | ||
| To Equity Share capital A/c | 3,300 | ||||
| (Being allotment money due on 11000 equity shares @ ₹ 3 per share) | |||||
| July 9 | Preference shares allotment A/c | Dr. | 7,500 | ||
| To 10% Preference share capital A/c | 7,500 | ||||
| (Being allotment money due on 2500 preference shares @ ₹ 3 each) | |||||
| Oct.9 | Equity share first and final A/c | Dr. | 4,400 | ||
| To Equity share capital A/c | 4,400 | ||||
| (Being first call money due on 1100 equity shares @ ₹ 4 each) | |||||
| Oct.9 | Preference share 1st and final call A/c | Dr. | 7,500 | ||
| To Equity shares capital A/c | 7,500 | ||||
| (Being 1st and Final call money due on 2500preference shares @ ₹ 3 pre share) | |||||
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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