Q.1 Make Necessary journal Entries and show Balance Sheet
Authorized Capital :
30,000 Ordinary Shares of Rs 100 each
30,00,000
Issued subscribed capital & paid up capital:
20,000 shares of Rs 100 each
20,00,000
Reserve Fund
12,00,000
P & Loss Account
700,000
Board of Director recommended :
1.
To issue bonus shares in the ratio of two bonus shares for every five ordinary shares Held.
2.
To issue right shares in the ratio of three right shares for every four ordinary shares .The right
shares will not be entitled for above bonus shares. For the purpose of issue of bonus shares, the
funds were to be provided out of profit & loss Account and reserve fund in equal proportion.