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.