Tag Archives | Shares

Types of Shares: Preference and Equity | Accounting

The shares which can be issued by a company, are of two types:- 1. Preference Shares 2. Equity Shares. Type # 1. Preference Shares: The Preference Shares are those which have some preferential rights over the other types of shares. A share to be preference share, must have two preferential rights: [Sec. 85(1)] (a) They […]

Accounting Entries for Issue of Shares at Premium | India | Company

In this article we will discuss about the accounting entries for the issue of shares at premium, explained with the help of an illustration.  A company likely to be very successful and enjoying a good reputation, asks intending shareholders to pay, on each share, a sum higher than the face value. In other words, when […]

Accounting Entries for Calls-In-Arrears and Calls-In Advance | Shares

In this article we will discuss about the accounting entries for call-in-arrears and calls-in-advance, explained with the help of an illustration. Calls-In-Arrears: If any amount, called in respect of a share, is not paid before or on the date fixed for payment thereof, such amount which is not paid, is called “CALLS-IN-ARREARS”. Amount may be […]

Provisions for Prohibition of Buy-Back of Shares | India | Accounting

In this article we will discuss about the provisions for prohibition of buy-back of shares. According to Section 77B of the Companies Act, no company shall, directly or indirectly, purchase its own shares or other specified securities: (а) Through any subsidiary company including its own subsidiary companies; or (b) Through any investment company or group […]

Accounting Entries for Capital Redemption Reserve | India | Company

In this article we will discuss about the accounting entries for capital redemption reserve, explained with the help of suitable illustrations. Accounting Entries for Capital Redemption Reserve: Minimum Fresh Issue of Shares: Sometimes, the use of mathematical equation becomes necessary to find out the number of new shares to be issued. At the time of […]

Important Conditions for Buy-Back of Shares | India | Accounting

The conditions precedent to buy-back, as laid down in Section 77A (2) of the Companies Act are:- (a) The company’s article should authorise the buy-back. In case the articles are silent on this point, the same has to be amended to include a provision to that effect; (b) No company shall purchase its own shares […]

Accounting Entries for Buy-Back of Shares | India | Company

In this article we will discuss about the accounting entries for buy-back of shares. Buy-back of shares is just the opposite of issue of shares. Just as shares may be issued at par, at a premium or a discount, even buy-back may be at par, at a premium or at a discount. The basis of […]

Redemption of Preference Shares | India | Accounting

Here is a compilation of top four accounting problems on redemption of preference shares with its relevant solutions. Problem 1 (Redemption out of profit at premium): The following are the balance appearing in the books of Puri Cycles Ltd. as on 31st Dec. Share Capital Equity share capital 18, 00,000 Preference shares (fully paid) 9, […]

Accounting Procedure for Issue of Shares at Discount

In this article we will discuss about the accounting procedure for the issue of shares at discount, explained with the help of necessary journal entries and illustration.  Generally a Company is not allowed to issue shares at a discount, i.e. at a price less than the face value of the shares. However, if a Company […]

Under-Subscription and Over-Subscription of Shares | Company

In this article we will discuss about the accounting procedure for under-subscription and over-subscription of shares, explained with the help of suitable illustrations. Under-Subscription: Sometimes, the applications for shares received are less than the number of shares issued. For instance, a Company issued 10,000 shares to the public and the Company received applications for 8000 […]

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