The balance sheet of A, B and C stood as under when they sold off their concern to newly started joint stock company:
|
Liabilities |
Assets |
||
|
Capital A/c Z |
Land& Buildings |
2,80,000 |
|
|
A 4,50,000 |
Machinery |
1,40,000 |
|
|
B 3,00,000 |
Stock |
2,60,000 |
|
|
C 1,50.000 |
900,000 |
Bills Receivable |
1,20,000 |
|
Creditors |
80,000 |
Debtors |
1,80,000 |
|
9,80,000 |
9,80,000 |
The joint stock company was started with a capital of Rs.20,00,000 divided into 10,000 shares of Rs.200 each. It also issues debentures for Rs.10,00,000 at a discount of 5%. The entire concern of A, B and C was taken up by the company on agreeing to pay them Rs.9,60,000 by the issue of 2,400 shares fully paid and Rs.4,80,000 in cash.
All the debentures and the remaining shares are issued to the public which are all taken up and paid for with the exception of 1,000 shares held by X on which he has not paid the final call of Rs.80 per share which were forfeited and reissued as fully paid at a discount of Rs.40 per share. The company paid Rs.10,000 for preliminary expenses. Pass the necessary journal entries in the books of the company and prepare its balance sheet.