Lec-23 - (800,000 200,000 Share premium(320,000 400,000...

Info iconThis preview shows pages 1–17. Sign up to view the full content.

View Full Document Right Arrow Icon
Advanced Financial Accounting FIN-611 Mian Ahmad Farhan Lecture-23 Limited Companies
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Right Issue
Background image of page 2
Journal Entry Bank A/c xxx Share capital A/c xxx
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Working Amount received = 200,000 x 1.5 = 300,000 Face value = 2,00,000 x 1 = 200,000 Share premium = 200,000 x 0.5 = 100,000
Background image of page 4
Journal Entry Bank A/c 300,000 Share capital A/c 200,000 Share premium A/c 100,000
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Question DT limited has 800,000 Rs. 1 ordinary shares in issue. They were originally issued at a premium of 40 paisa each. The current market price of these shares is Rs. 3.50 DT has announced 1 for 4 rights issue at Rs. 3 per share. Required 1. Record journal entry 2. Prepare balance sheet
Background image of page 6
Working Right issue = 800,000 / 4 x 1 = 200,000 shares Amount received = 200,000 x 3 = 600,000 Face value = 2,00,000 x 1 = 200,000 Share premium = 200,000 x 2 = 400,000
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Journal Entry Bank A/c 600,000 Share capital A/c 200,000 Share premium A/c 400,000
Background image of page 8
Owner’s Equity Owner’s Equity Amount Share capital
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 10
Background image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 12
Background image of page 13

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 14
Background image of page 15

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 16
Background image of page 17
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: (800,000 + 200,000) Share premium (320,000 + 400,000) 1,000,000 720,000 Bonus Issue Journal Entry Reserve A/c xxx Share capital A/c xxx Question The owner’s equity section of “Bonus Limited” is as follow: Owner’s Equity Amount Issued capital 50,000 @ 10 500,000 Share premium 380,000 Retained profit 570,000 1,450,000 Question Bonus share is issued, 2 for every 5 shares held. (50,000 / 5 x 2) = 20,000 x 10 = Rs. 200,000 Share premium account will be utilized for bonus shares. Required Show the effect on owner’s equity account before and after adjustment of bonus share. Solution Particulars Before bonus issue Bonus issue After bonus issue Share capital 500,000 200,000 700,000 Share premium 380,000 (200,000) 180,000 Retained profit 570,000----570,000 Total 1,450,000 1,450,000 Journal Entry Share premium A/c 200,000 Share capital A/c 200,000 Dividend Initial Public offer...
View Full Document

This note was uploaded on 05/15/2010 for the course ACCOUNTING B97702031 taught by Professor Lyz during the Spring '09 term at Punjab Engineering College.

Page1 / 17

Lec-23 - (800,000 200,000 Share premium(320,000 400,000...

This preview shows document pages 1 - 17. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online