VU Mgt-401 GDB
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Solution 1:
The value of the right is determined to be Rs. 1 per share.
The journal entries for the issuance of right shares are:
- Issuance of right shares to existing shareholders: Dr. Share Capital (Authorized) Rs. 1,000,000 Cr. Share Capital (Issued) Rs. 1,000,000
- Record the payment for the right shares: Dr. Share Application Money Rs. 1,100,000 Cr. Share Capital (Issued) Rs. 1,100,000
The effect of this right issue on the company's equity is an increase in the Share Capital (Issued) by Rs. 1,000,000. This increase in share capital contributes to the overall increase in the company's equity.
Solution 2:
(a) The value of the right is Rs. 1 per share.
(b) The journal entries for the issuance of right shares are:
- Issuance of right shares to existing shareholders: Dr. Share Capital (Authorized) Rs. 1,000,000 Cr. Share Capital (Issued) Rs. 1,000,000
- Record the payment for the right shares: Dr. Share Application Money Rs. 1,100,000 Cr. Share Capital (Issued) Rs. 1,100,000
(c) The effect of this right issue on the company's equity is an increase in the Share Capital (Issued) account by Rs. 1,000,000.The value of the right is determined to be Rs. 1 per share.
The journal entries for the issuance of right shares are:
- Issuance of right shares to existing shareholders: Dr. Share Capital (Authorized) Rs. 1,000,000 Cr. Share Capital (Issued) Rs. 1,000,000
- Record the payment for the right shares: Dr. Share Application Money Rs. 1,100,000 Cr. Share Capital (Issued) Rs. 1,100,000
The effect of this right issue on the company's equity is an increase in the Share Capital (Issued) by Rs. 1,000,000. This increase in share capital contributes to the overall increase in the company's equity.
Solution 3:
(a) The value of the right is determined to be Rs. 1 per share. (b) The journal entries for the issuance of right shares are as follows:
- Issuance of right shares to existing shareholders: Dr. Share Capital (Authorized) Rs. 1,000,000 Cr. Share Capital (Issued) Rs. 1,000,000
- Record the payment for the right shares: Dr. Share Application Money Rs. 1,100,000 Cr. Share Capital (Issued) Rs. 1,100,000
(c) The effect of the right issue on the company's equity is an increase in the Share Capital (Issued) account by Rs. 1,000,000. This increase in share capital contributes to the overall equity of the company.
MGT 401 Assessment
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Which type of business entity is primarily focused on
earning profits?
a) Non-profit organizations
b) Sole proprietorship
c)
Partnership
d) Trusts
Answer: b) Sole proprietorship
What is the main difference between sole proprietorship and partnership?
What is the main difference between sole proprietorship and partnership?
a) Number of owners
b) Liability of owners
c) Profit
distribution
d) Size of the business
Answer: a) Number of owners
Which type of business entity is governed by the Partnership Act 1932?
Which type of business entity is governed by the Partnership Act 1932?
a) Sole proprietorship
b) Partnership
c) Companies
d) Trusts
Answer: b) Partnership
Which type of business entity is considered a separate legal entity?
a) Sole proprietorship
b) Partnership
c) Companies
d)
NGO's
Answer: c) Companies
What is the main purpose of non-profit-oriented entities?
What is the main purpose of non-profit-oriented entities?
a) Earning profits for owners
b) Providing benefit to the
general public
c) Maximizing shareholder wealth
d) Carrying out social
causes
Answer: b) Providing benefit to the general public
Which type of business entity is established to carry out a social cause?
Which type of business entity is established to carry out a social cause?
a) Trusts
b) Societies
c) Companies
d) Partnership
Answer: a) Trusts
According to the separate entity concept, how is the business treated for accounting purposes?
a) Dependent on its owners
b)
Independent of its owners
c) Separate from its owners
d) None of the above
Answer: b) Independent of its owners
What is the concept of limited liability in a limited company?
What is the concept of limited liability in a limited company?
a) Owners are fully liable for business debts
b) Owners are not
liable for business debts
c) Owners are partially liable for business
debts
d) Owners are liable for unlimited business debts
Answer: b) Owners
are not liable for business debts
Which type of company restricts the right of shareholders to transfer their shares?
Which type of company restricts the right of shareholders to transfer their shares?
a) Public limited companies
b)
Private limited companies
c) Single member companies
d) Public listed
companies
Answer: b) Private limited companies
What is the key difference between publicly listed and publicly unlisted companies?
What is the key difference between publicly listed and publicly unlisted companies?
a) Profit distribution
b) Number of
shareholders
c) Share price
d) Stock exchange trading
Answer: d) Stock
exchange trading
What is the minimum number of shareholders required in a public limited company?
What is the minimum number of shareholders required in a public limited company?
a) One
b) Two
c) Three
d) Five
Answer: c) Three
Which type of company's shares are traded on stock exchanges?
Which type of company's shares are traded on stock exchanges?
a) Private limited companies
b) Public limited companies
c)
Sole proprietorship
d) Trusts
Answer: b) Public limited companies
What permission is required for non-profit-oriented companies?
What permission is required for non-profit-oriented companies?
a) Trading permission
b) SECP permission
c) Partnership
agreement
d) Limited liability
Answer: b) SECP permission
Which type of business entity is owned by a single individual?
Which type of business entity is owned by a single individual?
a) Partnership
b) Companies
c) Sole proprietorship
d)
Societies
Answer: c) Sole proprietorship
What happens to the personal properties of partners in case of bankruptcy of a partnership firm?
What happens to the personal properties of partners in case of bankruptcy of a partnership firm?
a) Personal properties are not
utilized
b) Personal properties are utilized for payment of liabilities
c)
Personal properties are sold to repay debts
d) Personal properties are
distributed among partners
Answer: b) Personal properties are utilized for
payment of liabilities
What is the primary aim of profit-oriented or commercial entities?
What is the primary aim of profit-oriented or commercial entities?
a) Providing benefit to the general public
b) Earning
profits for owners
c) Carrying out social causes
d) Maximizing shareholder
wealth
Answer: b) Earning profits for owners
Which type of business entity is not formed for profit?
Which type of business entity is not formed for profit?
a) Sole proprietorship
b) Partnership
c) Limited companies
d) NGO's
Answer:
d) NGO's
What type of companies have their liability limited to the amount of share capital they have contributed?
What type of companies have their liability limited to the amount of share capital they have contributed?
a) Public limited
companies
b) Private limited companies
c) Non-profit organizations
d)
Trusts
Answer: b) Private limited companies
What is the maximum number of shareholders allowed in a private limited company?
What is the maximum number of shareholders allowed in a private limited company?
a) 25
b) 50
c) 100
d) Unlimited
Answer: b) 50
Which type of companies have no restriction on the transfer of shares?
Which type of companies have no restriction on the transfer of shares?
a) Private limited companies
b) Public limited companies
c) Single member companies
d) Trusts
Answer: b) Public limited companies
What is the main purpose of trusts?
What is the main purpose of trusts?
a) Earning profits
for owners
b) Providing benefit to the general public
c) Carrying out
social causes
d) Maximizing shareholder wealth
Answer: c) Carrying out
social causes
What is the liability of shareholders in a limited company?
a) Unlimited liability
b) Joint liability
c) Limited liability
d)
No liability
Answer: c) Limited liability
What is the governing act for partnership firms?
What is the governing act for partnership firms?
a)
Companies Ordinance 1984
b) Partnership Act 1932
c) Trusts Act
d)
Societies Act
Answer: b) Partnership Act 1932
What is the main difference between sole proprietorship and partnership?
a) Number of owners
b) Liability of owners
c) Profit
distribution
d) Size of the business
Answer: a) Number of owners
What is the main purpose of non-profit-oriented entities?
What is the main purpose of non-profit-oriented entities?
a) Earning profits for owners
b) Providing benefit to the
general public
c) Maximizing shareholder wealth
d) Carrying out social
causes
Answer: b) Providing benefit to the general public
What is the concept of limited liability in a limited company?
What is the concept of limited liability in a limited company?
a) Owners are fully liable for business debts
b) Owners are not
liable for business debts
c) Owners are partially liable for business
debts
d) Owners are liable for unlimited business debts
Answer: b) Owners
are not liable for business debts
What is the main purpose of trusts?
What is the main purpose of trusts?
a) Earning profits
for owners
b) Providing benefit to the general public
c) Carrying out
social causes
d) Maximizing shareholder wealth
Answer: c) Carrying out
social causes
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