Corporate Finance: Shares, Debentures, and Partnership Accounting

1. Final call of ₹3 per share was yet to be made. Calculate the maximum discount at which these shares can be reissued. X Ltd. invited applications for 500, 12% debentures of ₹100 each at a 5% discount. These debentures were redeemable after five years at par. Applications for 600 debentures were received. Pro-rata allotment was made to all applications. Pass necessary journal entries for the debenture issue, assuming the whole amount was payable with application. P and Q, partners sharing profits and losses equally, had fixed capitals of ₹2,00,000 and ₹3,00,000, respectively. The partnership deed provided 12% p.a. interest on capital. For the year ended March 31, 2016, profits were distributed without providing interest on capital. Pass the adjustment entry. A and B, partners sharing profits and losses 5:3, admitted C. The new ratio became 3:2:3. A surrendered 1/5^th of his share to C. Calculate B’s sacrifice. Distinguish between ‘Fixed Capital Account’ and ‘Fluctuating Capital Account’ based on credit balance.

Ganesh Ltd. Financial Activities

Ganesh Ltd., with an authorized capital of ₹10,00,00,000 (₹10 equity shares), had a subscribed and fully paid-up capital of ₹6,00,00,000. To foster local employment and develop Arunachal Pradesh's tribal areas, the company planned a hydropower plant and skill development centers in Itanagar, Pasighat, and Tawang. To finance this, the company issued 1,00,000 equity shares (₹10 each) and 1,00,000 9% debentures (₹100 each), redeemable at par after five years. The issue was fully subscribed. A shareholder with 2,000 shares failed to pay the ₹2 final call.

Show the share capital in the Balance Sheet as per Schedule III of the Companies Act, 2013, and identify two values the company propagates.

Disha Ltd. Machinery Purchase

Disha Ltd. purchased machinery from Nisha Ltd., paying as follows:

• 10,000 equity shares (₹10 each) at a 10% premium
• 200, 9% debentures (₹100 each) at a 10% discount
• Bill of exchange for ₹50,000 payable after one month

Pass necessary journal entries in Disha Ltd.'s books for the purchase and payment.

Partnership Retirement and Goodwill

Kavi, Ravi, Kumar, and Guru, sharing profits 3:2:2:1, retired on February 1, 2017. The new profit-sharing ratio for Kavi, Ravi, and Kumar became 3:1:1. Upon Guru's retirement, the firm's goodwill was valued at ₹3,60,000.