0444 Assignment No 1 solution 2022-Aiou Autumn-Advance Accounting-Q 3

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0444 Assignment No 1 solution 2022-Aiou Autumn-Advance Accounting-Q 3 Question No 3 Record the Journal entries for the following transactions in the books of Decent Company Ltd :      a)  Issued 3,000 share of 10% preference shares of Rs. 100 each at par in cash.  b)  Issued 10,000 ordinary shares of Rs. 100 each at Rs. 110 each in cash. c)  Issued 2,000 10% preference shares of Rs.100 each at Rs. 95 each in           cash. d)  Acquired Equipment costing Rs. 210,000 against 2,000 10% preference shares of Rs. 100 each e)  Issued 2,000 common shares of Rs. 100 each to promoters in recognition of their services.

Transcript

00:00Today we are going to cover the question number 3 of assignment number 1 of advanced accounting

00:14which has subject code 0344 and its level is BA and BCom for AIOU university semester

00:21system and its assignment is related to semester autumn 2022 and its final submission date

00:29is 14th april 2023 so let's start reading question number 3 then we will go to the requirement

00:36and finally we will see the solution of this question record the general interest for the

00:42following transaction in the books of descent company limited few transactions are given

00:49below related to the descent company limited and they are asked to be please record these

00:56transactions in the book of descent company means general interest you are going to be

01:00general in the book of general journal so first entry first transaction is issue 3000

01:08share of 10% preference share 10% preference share means the share and give 10% interest

01:17rate on each share of rupees 100 each at foreign cash so price of each preference

01:25share is rupees 100 which is par value then in second transaction issued 10,000 ordinary

01:32shares of rupees 100 each at rupees 110 it means you see that and the floating price

01:39is greater than the par value by 10 rupees it means and the share has been issued on

01:45premium issued 2000 share 10% preference share again of rupees 100 each at rupees 25 each

01:55in cash so again look at this and the descent company has issued again same preference shares

02:03of 10% but in less amount as compared to the transaction on 2000 but at this time rather

02:09than par value it will be float on 5% discount acquired equipment costing will be 210,000

02:19against 2010% preference share of rupees 100 each issued 2000 common shares ordinary shares

02:28and common shares are same or similar worth or interchangeable worth of rupees 100 each

02:34promote in recognition of their services so let's move to the solution first transaction

02:40is that as I have noticed here again in cash the word is in cash so you can replace bank

02:48account with the word cash account so cash account we are going to be mention it here

02:56as rupees 300,000 because it has been issued on par value of 100 rupees which gives

03:04210% interest rate to its holder so this is the our transaction and the second transaction is

03:14that if we transfer from share preference share application account to the preference share

03:25account in other words you can only use a cash account to preference to preference share capital

03:33account or preference share account so I am going to use this temporary account preference

03:38share application account so from this account to I am going to transfer share application to

03:46preference share capital account 300,000 so you see here the head is on credit side and in the

03:55second transaction as guarantee it is on the double side though it will be cancelled each

04:00other and finally it will become cash account to the preference share capital account so this

04:06is the reason you please write it down by yourself and then again second transaction

04:12is about Adni share Adni share I think Adni share so share application account to rupees

04:25100 1100,000 or 1.1 million or to share capital account if this is 1 million because the par

04:35value is 100 and the above value is 100,000 it will be go to the share premium account or paid

04:41in capital account the other name that we have used for share premium account is paid in capital

04:48account so funds have been transferred to share capital account and share premium account now in

04:55third transaction again we are issue the preference share to at 5% discount in transaction A we are

05:10going to float the preference share at par value but it is now less than its par value in any 5%

05:18score means 100 minus 5 is equal to 95 so this is a transaction you will replace this bank account

05:25with the world cash account so again I am going to pass another entry preference share application

05:32account to discount preference share account are paid in capital account this time it is going to

05:37be capital because it is floating on less amount as compared to the par value with the 10,000 so

05:46to preference share capital account is equal to rupees 200 and then we are dealing with the

05:53transaction D which is related to the requirement of the equipment again the preference share so

05:59equipment account is equal to 210,000 and to share preference account is equal to 200 look at this

06:05the figure 210,000 the figure shows that we have given preference share at above its par value

06:15because this value is and the value of the equipment is greater than the amount of the

06:23share preference share at par value which is 200,000 and here is 210,000 so the above of 200,000 is

06:31going to the premium preference account so in last transaction promoters services account to share

06:38capital account so we are giving them ordinary shares so granted to 1000 ordinary shares of

06:45rupees 100 each to promoters are their services and the solution of this question number three

06:52has been finished here in the last I am going to request you please if you find any mistake

06:59regarding calculation please mention in the comment section or if you want to discuss any

07:04point please drop your query in the comment section or if you want to add something

07:11regarding the solution to improve it your comments are welcome thanks for watching assalamu alaikum

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