Page 318 - VIRANSH COACHING CLASSES

8 Company Accounts : Issue of Shares

Content

( Accounting of Shares)

8.1 Share and Share Capital
8.1.1 Meaning and Definition
8.1.2 Types of Shares
8.1.3 Treatment of share capital in Company Balance Sheet (Horizontal Form)

8.2 Accounting for Share Capital
8.2.1 Public Issue of Shares
8.2.2 Basic Accounting Entries for Issue of Shares
8.2.3 Issue of Shares at Par, Premium and Discount

8.2.4 Oversubcription and Undersubscription of shares
8.2.5 Calls in Arrears and Calls in Advance
8.2.6 Issue of Shares for Consideration other than cash

8.3 Forfeiture of Shares
8.3.1 Accounting treatment for forfeiture of shares
8.3.2 Re-issue of Forfeited Shares.

Competency Statements

o The Students will be able to :

 Learn the types of Share and Share Capital.
 Understand the Concept of Public Subscription and Private Placement.
 Know Concept of under and over valuation of Shares and accounting of Shares issued at
par, at premium and at discount.

 Know the different accounting treatment for under and over Subscription of Shares as well
as call in arrears and call in advance.

Company Accounts
(Issue of Shares)
Introduction -
Capital is the life blood of any business organisation. A sole trader introduces capital out of his own
pocket. Similarly the partners also bring capital from their own pockets. But is case of company form
of business organisation, the capital is raised through the issue of shares.
Industrial Revolution brought significant changes in the size of business-structure. Joint Stock
Company as a modern form of business organisation emerged to meet the requirements of large
sized business to remove the main defects or limitation of the partnership form of organisation. i.e.

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