Underwriting of Shares Questions and Answers

Underwriting of Shares Question No. 1 (Partial Underwriting) A Company issued 100,000 shares of $100 each. These shares were underwritten as follows: X—-30,000 shares and Y—– 50,000 shares. The public applied for 70,000 shares. Determine the liability of X, Y and the Company. Answer Marked applications are not given in the problem. Therefore, applications be … Read more

Issue and redemption of debentures practical problems and solutions

Issue of Debentures Journal Entries Practical Problem No. 1 A company issued 1,000 10% debentures of $100 each at par, payable $40 on application, and the balance on allotment. The public applied for 800 debentures. These applications were accepted. All money was received. Give Journal entries. Solution Issue of Debentures for Consideration other than Cash … Read more

Redemption of Preference Shares Practical Problem and Solutions

Redemption of Preference Shares at Premium Practical Problem No.1 A Limited Company issued on 1st July 2000, 10,000 redeemable preference shares of $10 each. Such shares wee redeemable at a premium of 10%. Two-fifths of this issue was redeemed out of profits on 10th January 2004. On 20th January 2004, the Company issued 20,000 equity … Read more

Issue of shares at premium and discount – practical problems with answers

Issue of shares at Premium – Practical Problem with answer Asian Ltd. issued 5,000 Preference Share of $10 each at a premium of $4 per share, payable $1 per share on application; $6 per share on allotment including premium; 3 per share on first call and $4 per share on final call. The shares were … Read more

Corporation

What is a Corporation? – Definition A corporation is a separate body, authorized by law, owned by one or more persons and having its own rights, privileges, and obligations distinct from those of its owner(s). In effect, under the Constitution, a corporation is a separate legal entity with a continuous life that has rights and … Read more