A and B entered into a joint venture of underwriting the subscription of the entire share capital of the Copper Mines Ltd. Consisting of 1,00,000 equity shares of 10 each and to pay all expenses upto Allotment. The profits were to be shared by them in proportions of 3/5ths and 2/5ths. The consideration In return for this agreement was the allotment of 12,000 other shares of '10 each to be issued to them As fully paid. A provided funds for registration fees '12,000, advertising expenses of 11,000, for Expenses on printing and distributing the prospectus amounting to 7,500 and other printing and Stationery expenses of '2,000. B contributed towards payment of office rent 3,000, legal charges 13,750, salary to clerical staff 9,000 and other petty disbursements of 1,750. The prospectus was Issued and applications fell short by 15,000 shares. A took over these on joint account and paid for The same in full. The venturers received the 12,000 fully paid shares as underwriting commission. They Sold their entire holding at 12.50 less 50 paise brokerage per share. The net proceeds were received By A for 15,000 shares and B for 12,000 shares. Required: Write out the necessary accounts in the books of A showing the final adjustments.
A and B entered into a joint venture of underwriting the subscription of the entire share capital of the Copper Mines Ltd. Consisting of 1,00,000 equity shares of 10 each and to pay all expenses upto Allotment. The profits were to be shared by them in proportions of 3/5ths and 2/5ths. The consideration In return for this agreement was the allotment of 12,000 other shares of '10 each to be issued to them As fully paid. A provided funds for registration fees '12,000, advertising expenses of 11,000, for Expenses on printing and distributing the prospectus amounting to 7,500 and other printing and Stationery expenses of '2,000. B contributed towards payment of office rent 3,000, legal charges 13,750, salary to clerical staff 9,000 and other petty disbursements of 1,750. The prospectus was Issued and applications fell short by 15,000 shares. A took over these on joint account and paid for The same in full. The venturers received the 12,000 fully paid shares as underwriting commission. They Sold their entire holding at 12.50 less 50 paise brokerage per share. The net proceeds were received By A for 15,000 shares and B for 12,000 shares. Required: Write out the necessary accounts in the books of A showing the final adjustments.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A and B entered into a joint venture of underwriting the subscription of the entire share capital of the
Copper Mines Ltd. Consisting of 1,00,000 equity shares of 10 each and to pay all expenses upto
Allotment. The profits were to be shared by them in proportions of 3/5ths and 2/5ths. The consideration
In return for this agreement was the allotment of 12,000 other shares of '10 each to be issued to them
As fully paid. A provided funds for registration fees `12,000, advertising expenses of 11,000, for
Expenses on printing and distributing the prospectus amounting to 7,500 and other printing and
Stationery expenses of '2,000. B contributed towards payment of office rent' 3,000, legal charges
13,750, salary to clerical staff 9,000 and other petty disbursements of 1,750. The prospectus was
Issued and applications fell short by 15,000 shares. A took over these on joint account and paid for
The same in full. The venturers received the 12,000 fully paid shares as underwriting commission. They
Sold their entire holding at 12.50 less 50 paise brokerage per share. The net proceeds were received
By A for 15,000 shares and B for 12,000 shares.
Required:
Write out the necessary accounts in the books of A showing the final adjustments.
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