On 1st April 2024, Kesar held 75,000 equity shares of Beta Ltd., recorded at a book value of 15 per share (with a nominal value of 10 each). The…

CA Intermediate · Advanced Accounting · RTP · September 2025
On 1st April 2024, Kesar held 75,000 equity shares of Beta Ltd., recorded at a book value of 15 per share (with a nominal value of 10 each). The following transactions took place during the year: On 20th June 2024, Kesar purchased 15,000 additional shares of Beta Ltd. at 16 per share.On 1st August 2024, Beta Ltd. declared a bonus issue of one share for every six shares held.On 31st October 2024, the company announced a rights issue, offering three shares for every seven held at a price of 15 per share. Shareholders were allowed to fully or partially renounce their rights. Kesar sold one-third of his rights entitlement to Megha at 2 per share and subscribed to the remaining rights on 5th November 2024. You are required to prepare the Investment Account in the books of Kesar for the year ending 31st March 2025.

Suggested Answer and Working Notes:

In the books of Kesar Investment Account (Equity shares in Beta Ltd.) Date Particulars No. of shares Amount (₹) Date Particulars No. of shares Amount (₹) 1.4.24 To Balance b/d 75,000 11,25,000 31.3.25 By Balance c/d (Bal. fig.) 1,35,000 18,15,000 20.6.24 To Bank A/c 15,000 2,40,000 1.8.24 To Bonus issue (W.N.1) 15,000 5.11.24 To Bank A/c (right shares) (W.N.4) 30,000 4,50,000 1,35,000 18,15,000 1,35,000 18,15,000 Working Notes: (1) Bonus shares = (75,000 + 15,000) / 6 = 15,000 shares (2) Right shares = (75,000 + 15,000 + 15,000) / 7 × 3 = 45,000 shares (3) Sale of rights = 45,000 shares × 1/3 × ₹ 2 = 30,000 to be credited to statement of profit and loss (4) Rights subscribed = 45,000 shares × 2/3 × ₹ 15 = 4,50,000

Topics: AS 13

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