ABC Company Ltd. was registered with an authorized capital of Rs 10,000,000 divided into 100,000 ordinary shares of Rs. 100 each. Following is the balance sheet of ABC Company Ltd. for the year ended December 31st, 2018: ABC COMPANY LTD BALANCE SHEET (RS) For the Year Ended December 31st, 2018 ASSETS (RS.) DEBT + EQUITY (RS.) Current Assets Current Debt Cash 350,000 Accounts Payable 125,000 Accounts Receivable 245,000 Interest Payable 42,000 Inventory 47,000 Office Rent Payable 145,000 Office Supplies 5,000 Total Current Debt 312,000 Total Current Assets 647,000 Long Term Debt Fixed Assets 10% Bonds Payable 550,000 Office Equipment 700,000 Total Debt 862,000 Accumulated Depreciation (office equip.) (150,000) Book Value 550,000 Equity Office Furniture 550,000 Ordinary Shares Capital 500,000 Accumulated Dep. (office fur.) (100,000) Ordinary Shares Premium 50,000 Book Value 450,000 Retain Earnings 235,000 Total Fixed Assets 1,000,000 Total Equity 785,000 TOTAL ASSETS 1,647,000 TOTAL DEBT + EQUITY 1,647,000 Part - 1 General Journal – General Ledger and Trial Balance Following transactions were completed during the year 2019: Business offered 6,500 applications to general public for subscription at Rs. 110 for each shares through newspaper. The company’s banker reported that 8,000 shares money were received with application. The directors of the company finalized allotment of 6,500 shares and directed their banker to refund the excess application money. The company also paid cash in advance Rs. 105,000 to an advertising company. Purchased office supplies at cash Rs. 15,000. Purchased inventory on credit for Rs. 825,000 and also paid transportation charges Rs. 30,000. Purchased office equipment at cash from supplier for Rs. 500,000 Paid salaries to staff Rs. 75,000. Sold inventory for Rs. 1,500,000 including 15% cash sales. Business allowed 3% cash discount. Paid cash to supplier Rs. 360,000 Paid utility bills and office rent Rs 32,000 and Rs. 41,000 respectively. Defective inventory returned to supplier worth Rs. 22,000. 1% commission was paid to agency at all credit sales. Collected cash from customers Rs. 675,000 Auditor’s fees paid Rs. 30,000 Paid interest and rent by Rs. 42,000 and 145,000 respectively. REQUIRED Record the above transactions in General Journal (1 to 14), balance-off all the accounts (General Ledger - Hint: First post opening balances of all accounts shown in balance sheet for the period ended December 31st, 2018), and then extract a Trial Balance as at December 31st, 2019. What are characteristics of public limited companies and describe in detail the steps of incorporation of a public limited company.
ABC Company Ltd. was registered with an authorized capital of Rs 10,000,000 divided into 100,000 ordinary shares of Rs. 100 each. Following is the
ABC COMPANY LTD |
|||||
BALANCE SHEET (RS) |
|||||
For the Year Ended December 31st, 2018 |
|||||
ASSETS (RS.) |
DEBT + EQUITY (RS.) |
||||
Current Assets |
Current Debt |
||||
Cash |
350,000 |
|
Accounts Payable |
125,000 |
|
|
245,000 |
|
Interest Payable |
42,000 |
|
Inventory |
47,000 |
|
Office Rent Payable |
145,000 |
|
Office Supplies |
5,000 |
|
Total Current Debt |
312,000 |
|
Total Current Assets |
|
647,000 |
|
|
|
|
|
|
Long Term Debt |
|
|
Fixed Assets |
|
|
10% Bonds Payable |
550,000 |
|
Office Equipment |
700,000 |
|
Total Debt |
|
862,000 |
|
(150,000) |
|
|
|
|
Book Value |
550,000 |
|
Equity |
|
|
Office Furniture |
550,000 |
|
Ordinary Shares Capital |
500,000 |
|
Accumulated Dep. (office fur.) |
(100,000) |
|
Ordinary Shares Premium |
50,000 |
|
Book Value |
450,000 |
|
|
235,000 |
|
Total Fixed Assets |
|
1,000,000 |
Total Equity |
|
785,000 |
|
|
|
|
|
|
TOTAL ASSETS |
|
1,647,000 |
TOTAL DEBT + EQUITY |
|
1,647,000 |
Part - 1 |
General Journal – General Ledger and |
|
Following transactions were completed during the year 2019:
- Business offered 6,500 applications to general public for subscription at Rs. 110 for each shares through newspaper. The company’s banker reported that 8,000 shares money were received with application. The directors of the company finalized allotment of 6,500 shares and directed their banker to refund the excess application money.
- The company also paid cash in advance Rs. 105,000 to an advertising company.
- Purchased office supplies at cash Rs. 15,000.
- Purchased inventory on credit for Rs. 825,000 and also paid transportation charges Rs. 30,000.
- Purchased office equipment at cash from supplier for Rs. 500,000
- Paid salaries to staff Rs. 75,000.
- Sold inventory for Rs. 1,500,000 including 15% cash sales. Business allowed 3% cash discount.
- Paid cash to supplier Rs. 360,000
- Paid utility bills and office rent Rs 32,000 and Rs. 41,000 respectively.
- Defective inventory returned to supplier worth Rs. 22,000.
- 1% commission was paid to agency at all credit sales.
- Collected cash from customers Rs. 675,000
- Auditor’s fees paid Rs. 30,000
- Paid interest and rent by Rs. 42,000 and 145,000 respectively.
REQUIRED
- Record the above transactions in General Journal (1 to 14), balance-off all the accounts (General Ledger - Hint: First post opening balances of all accounts shown in balance sheet for the period ended December 31st, 2018), and then extract a Trial Balance as at December 31st, 2019.
- What are characteristics of public limited companies and describe in detail the steps of incorporation of a public limited company.
Step by step
Solved in 2 steps