Q # 7 Mehmood Ltd. was registered with the authorized capital of Rs.2, 000,000 divided into 200,000 shares of Rs.10 each. The Company offered to the public 170,000 shares of subscription at par. The applications for 150,000 shares were received. The underwriters under the agreement subscribed for the remaining 20,000 shares. The Company paid 2% underwriting commission. The Company also completed the following transactions.

i) Issued 4,200 shares at par to the promoters in consideration of their services for the promotion of The Company.

ii) Purchased equipment for Rs.80, 000 and issued 7,600 shares of Rs.10 each. iii) Purchased office building for Rs.130, 000 and issued 12,000 shares of Rs.10 each as purchase consideration.