PRACTICAL QUESTIONS

Question $1$

The books of B Ltd$.$ showed the following balance on $31$st December, $20$X$3$:

$30,000$ Equity Shares of $10$ each fully paid; $18,00012\%$ Redeemable Preference

Shares of $10$ each fully paid; $4,00010\%$ Redeemable Preference Shares of $10$

each, $8$ paid up$.($all shares issued on $1$st April, $20$X$2).$

Undistributed Reserve and Surplus stood as: Profit and Loss Account $80,000$;

General Reserve $1,20,000$; Securities Premium Account $15,000$ and Capital

Reserve $21,000.$

For redemption, $3,000$ equity shares of $10$ each are issued at $10\%$ premium. At

the same time, Preference shares are redeemed on $1$st January, $20$X$4$ at a

premium of $2$ per share. The whereabouts of the holders of $100$ shares of $10$

each fully paid are not known.

A bonus issue of equity share was made at par, two shares being issued for every

five held on that date out of the Capital Redemption Reserve Account. However,

equity shares, issued for redemption are not eligible for bonus.

Show the necessary Journal Entries to record the transactions.

Question $2$

The following is the summarised Balance Sheet of Bumbum Limited as at $31$

March. $20$x$1$:

Sources of funds

Authorized capital