Issue of Shares | Company Accounts Class 12 | Part 1

00:32:52
https://www.youtube.com/watch?v=aLIwtjh-Uwo

Summary

TLDRIn this video, the chapter on company accounts begins, focusing particularly on the issue of shares. The instructor explains the importance of this topic for students and promises that with proper following of the video sessions, their understanding of shares will improve. The video outlines different types of share capital: authorized, issued, and subscribed. It discusses how a company raises money by inviting public investment and how this investment translates into ownership via shares. The stages of capital subscription – application, allotment, and calls – are detailed along with the corresponding journal entries. The video emphasizes the risks involved in investing in shares and introduces essential accounting concepts that will be crucial for solving related problems in future classes.

Takeaways

  • 📚 Understanding of company accounts begins with shares.
  • 💰 Shares allow public investment in businesses.
  • 📊 Types of share capital: authorized, issued, subscribed.
  • 📈 Capital subscription involves application, allotment, calls.
  • 📝 Journal entries are crucial for accounting practices.
  • 🔍 Risks of share investment: potential loss if the company fails.
  • 👩‍💼 Shareholders become part owners based on their investment.
  • 📅 Duration for the chapter is planned to be about 20 classes.
  • 🧮 Entry examples include application money and calls overview.
  • 🚀 The next class will dive into practical questions on this topic.

Timeline

  • 00:00:00 - 00:05:00

    The video begins with an introduction to the topic of company accounts, specifically focusing on the issue of shares. The speaker emphasizes the importance of this chapter for students and assures them that following the video series will help them master the topic, aiming for full marks in their assessments.

  • 00:05:00 - 00:10:00

    The speaker outlines the structure of the course, mentioning that the partnership chapter was worth 36 marks and the company chapter will be worth 24 marks, totaling 60 marks. The plan is to cover the company chapter in about 20 classes over 40 days, followed by revisions before exams.

  • 00:10:00 - 00:15:00

    The concept of shares is introduced, explaining that shares represent ownership in a company. The speaker illustrates this with an example of an individual investing in a company and how their investment translates to ownership percentage and profit sharing.

  • 00:15:00 - 00:20:00

    The speaker explains the definition of share capital and its three types: authorized, issued, and subscribed share capital. The authorized share capital is the maximum amount a company can raise, while issued share capital refers to the amount actually offered to the public, and subscribed share capital is the amount that the public has shown interest in purchasing.

  • 00:20:00 - 00:25:00

    The video discusses capital subscription, detailing the three scenarios: full subscription, under subscription, and over subscription. The speaker uses relatable examples to clarify these concepts, ensuring students understand the implications of each scenario on share issuance.

  • 00:25:00 - 00:32:52

    Finally, the speaker covers the journal entries related to share capital transactions, explaining how companies record the receipt of application money, allotment money, and calls. The importance of understanding these entries is emphasized as foundational knowledge for the chapter, with a promise to delve into practical questions in the next class.

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Mind Map

Video Q&A

  • What is the focus of the video?

    The video focuses on the issue of shares in company accounts.

  • How many types of share capital are discussed?

    Three types of share capital: authorized, issued, and subscribed.

  • What is the meaning of 'share'?

    A share is a part of the capital of a company divided into smaller units.

  • What is application money?

    Application money is the initial amount shareholders pay when applying for shares.

  • What are the stages of capital subscription?

    The stages are application, allotment, and calls.

  • What is the purpose of issuing shares?

    The purpose is to raise money from the public to fund business operations.

  • What does 'paid up capital' mean?

    Paid up capital is the amount of money that shareholders have actually paid to the company.

  • What are the three cases of capital subscription?

    The three cases are full subscription, under subscription, and over subscription.

  • What is authorized share capital?

    Authorized share capital is the maximum amount of share capital that a company is allowed to issue.

  • What does 'called up' mean?

    Called up refers to the amount of money that the company has requested from shareholders.

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  • 00:00:00
    What's up everyone, welcome back to the channel.
  • 00:00:03
    Guys, today we are going to start the chapter about which kids are very much
  • 00:00:09
    concerned.
  • 00:00:10
    Kids are very much afraid of this particular book.
  • 00:00:14
    And this book also came in many students' half-earlies who did the whole
  • 00:00:17
    chapter from my last year's playlist.
  • 00:00:20
    But they said that sir, if you do it this time, then we will do it again in a
  • 00:00:22
    very good way and understand it.
  • 00:00:25
    So today we are going to start, kids, company accounts.
  • 00:00:29
    And today we will start issue of shares in company accounts.
  • 00:00:32
    This is such a chapter that kids are very much afraid of.
  • 00:00:35
    Those who have come, this becomes their favorite.
  • 00:00:38
    But I promise you that if you follow this playlist in a good way, if you follow
  • 00:00:43
    this video sessions one to one, one to one, as and when it will work, then your
  • 00:00:48
    issue of shares will be strongest.
  • 00:00:50
    And you will not have any problem.
  • 00:00:52
    Your 24 out of 24 numbers of this book are fixed.
  • 00:00:54
    So come quickly with a copy pen.
  • 00:00:56
    Today we will discuss basics and move things forward.
  • 00:00:59
    Let's begin.
  • 00:01:14
    Son, first of all, we see that our partnership was all the chapters were of a
  • 00:01:23
    total of 36 marks.
  • 00:01:26
    Okay, your partnership was of 36 marks.
  • 00:01:28
    After that, your company, which we are going to read now, this is going to be
  • 00:01:34
    of 24 marks.
  • 00:01:36
    So add 36 and 24, your whole 60 numbers are done by these two books.
  • 00:01:43
    Sir, this company is going to be in how many videos or how many days?
  • 00:01:48
    Look, the partnership took us about 60 days.
  • 00:01:51
    We have a series of 100 days.
  • 00:01:53
    It took 60 days.
  • 00:01:55
    This whole book will take about 20 classes.
  • 00:01:57
    It will take 20 days.
  • 00:01:58
    And the next whole book will also take 20 days.
  • 00:02:01
    So in the next 40 days, we will complete both these books.
  • 00:02:05
    And in a good way, our complete preparation of 80 numbers will be done.
  • 00:02:09
    Then we will do revisions.
  • 00:02:10
    Multiple series will come for you.
  • 00:02:11
    It works.
  • 00:02:12
    Okay, a lot will come for you before the board.
  • 00:02:15
    Now our target is to complete this.
  • 00:02:17
    Okay, we have two chapters in it.
  • 00:02:20
    Issue of shares and issue of debentures.
  • 00:02:28
    So we have to understand them very carefully and make our basics strong.
  • 00:02:34
    Today this is going to be our target.
  • 00:02:37
    Okay, so let's start today's issue of shares.
  • 00:02:41
    If you want to write this, then write it quickly.
  • 00:02:43
    Although you must have written this.
  • 00:02:44
    Let's start.
  • 00:02:46
    We will quickly put the heading.
  • 00:02:49
    Issue of shares.
  • 00:02:53
    Sir, what is the meaning of issue of shares?
  • 00:02:57
    What is the accounting treatment?
  • 00:02:58
    I will cover everything in a good way.
  • 00:03:01
    See kids, first of all, let's go on a very simple thing.
  • 00:03:05
    There is a company.
  • 00:03:07
    To do business with a company, Whatever business it is, it is making goods, it
  • 00:03:12
    is making services, whatever.
  • 00:03:13
    Money is needed to do business.
  • 00:03:16
    Right, now how long will an individual invest that money?
  • 00:03:20
    One owner or one founder of the company Or say in a way that people are running
  • 00:03:26
    the company.
  • 00:03:27
    Owners in the company themselves.
  • 00:03:29
    Owners, how long will they invest money alone?
  • 00:03:32
    They need more money.
  • 00:03:34
    So you have a lot of options that the company goes to the banks.
  • 00:03:39
    Brother, give us money.
  • 00:03:40
    The company goes to a lot of international banks.
  • 00:03:44
    To a lot of international institutions.
  • 00:03:47
    So the company goes to a lot of institutions.
  • 00:03:50
    That give us money.
  • 00:03:52
    Ultimately, the company goes to the public.
  • 00:03:55
    To the public.
  • 00:03:57
    That you can also invest money in our company.
  • 00:04:02
    You can also give us money.
  • 00:04:04
    And we will give you a return in return.
  • 00:04:06
    Brother, the public has money.
  • 00:04:09
    Now what has the public done to the money?
  • 00:04:11
    Either it is kept at home or it is kept in the bank.
  • 00:04:14
    Now if it is kept at home, then you are not able to earn anything from that
  • 00:04:16
    money.
  • 00:04:17
    It is as much as it is.
  • 00:04:18
    In fact, with time, due to inflation, it is getting less.
  • 00:04:21
    If it is kept in the bank, then the bank will give you 3-3.5% on saving
  • 00:04:25
    deposits.
  • 00:04:26
    5-6% will give you on fixed deposits.
  • 00:04:28
    That bank is giving you a return.
  • 00:04:30
    So the company tells the public that you keep your money at home.
  • 00:04:38
    You keep your money in the bank.
  • 00:04:41
    You invest your money in your own business.
  • 00:04:46
    Brother, your money is at home, in the bank.
  • 00:04:48
    You do your own business.
  • 00:04:50
    So there is also a risk in this business.
  • 00:04:54
    Your money can also drown in this business.
  • 00:04:56
    If you do your own business, then there is also a risk in it.
  • 00:04:59
    Your money can also go there.
  • 00:05:01
    So why don't you invest this money in your own business.
  • 00:05:06
    If you have extra money, then give us some money.
  • 00:05:09
    We are also doing business.
  • 00:05:11
    Here you will have to put your own effort.
  • 00:05:14
    You will have to go to the shop every day.
  • 00:05:16
    You will have to do everything every day.
  • 00:05:17
    You don't have to do anything here.
  • 00:05:19
    You just give us money.
  • 00:05:21
    You will be our owner.
  • 00:05:23
    The amount of money you will invest in the company, The way you invest money in
  • 00:05:26
    your business, you are the owner there too.
  • 00:05:28
    Similarly, if you invest money here, then you will be the owner of this company
  • 00:05:31
    too.
  • 00:05:33
    Sir, does this mean that I will be the owner of the whole company?
  • 00:05:35
    No son, you will be the owner of the amount of money you invest.
  • 00:05:39
    Like Chintu thought, Chintu thought that I am in this company.
  • 00:05:45
    This company is of 1 crore.
  • 00:05:46
    So I invest 10 lakh rupees in this company.
  • 00:05:50
    So when Chintu invested 10 lakh rupees in this company, So how much is 10 lakh
  • 00:05:55
    for 1 crore?
  • 00:05:57
    10% So Chintu became the owner of 10%.
  • 00:06:00
    Chintu became the owner of 10%.
  • 00:06:03
    And what will Chintu get in return of this 10 lakh?
  • 00:06:07
    Company's share.
  • 00:06:08
    1 10th share.
  • 00:06:09
    Because the total is of 1 crore.
  • 00:06:11
    Chintu has invested 10 lakh.
  • 00:06:13
    Right?
  • 00:06:14
    So with perfection, children you should know That Chintu will get share.
  • 00:06:21
    Share means share.
  • 00:06:22
    Now the company will earn as much profit every year.
  • 00:06:27
    Chintu will also get 1 10th of that.
  • 00:06:30
    Chintu will also get share from that.
  • 00:06:32
    So Chintu is sitting in his house.
  • 00:06:34
    Chintu doesn't have to do anything.
  • 00:06:36
    Chintu had checked that this company is a very good company.
  • 00:06:39
    The company is doing a very good job.
  • 00:06:41
    This company has a lot of name in the country.
  • 00:06:43
    And this company needs money to grow.
  • 00:06:47
    So the money goes to the public to buy the company.
  • 00:06:50
    Now it tells the public that you please invest money here.
  • 00:06:55
    If you give us your money, then we will do more business from it.
  • 00:06:58
    More profit will come from it.
  • 00:07:00
    So that profit will also be shared with you.
  • 00:07:02
    Because the one who invests money becomes the owner.
  • 00:07:05
    The one who invested money is the owner.
  • 00:07:07
    Did you understand the child?
  • 00:07:08
    So we call this share.
  • 00:07:11
    So first of all, what is share, son?
  • 00:07:13
    What is share?
  • 00:07:15
    The capital of the company divided into smaller parts.
  • 00:07:23
    Sir, if the company goes down, then our money will also go down.
  • 00:07:26
    10 lakh rupees will also go down.
  • 00:07:28
    Yes, son.
  • 00:07:28
    Look, this is a fact.
  • 00:07:29
    There is a risk.
  • 00:07:30
    There is a risk.
  • 00:07:31
    So whenever you buy shares of any company, If that company goes down, Then your
  • 00:07:37
    money will also go down.
  • 00:07:38
    Like you invest money in your business.
  • 00:07:39
    If the business is over, then your money is also over.
  • 00:07:42
    The same scenario is here.
  • 00:07:43
    Here it is that you are investing money in a bigger business.
  • 00:07:47
    Okay, children?
  • 00:07:48
    The capital of the company divided into smaller parts is known as shares.
  • 00:07:54
    What is share, children?
  • 00:07:56
    That capital which is divided into small parts, we call it share.
  • 00:08:00
    Sir, what is share capital?
  • 00:08:03
    Simply, the money invested by the shareholder by the owner, It is called share
  • 00:08:06
    capital.
  • 00:08:08
    Now you children here, If you want to write anything from this, then write.
  • 00:08:10
    You have to write here, share capital.
  • 00:08:17
    What is share capital, children?
  • 00:08:18
    The money, the capital, who invested it?
  • 00:08:23
    Capital invested by owner.
  • 00:08:26
    Who is the owner?
  • 00:08:27
    Who is buying the share?
  • 00:08:28
    That means shareholder.
  • 00:08:30
    So the money that the shareholder has invested in the company, It is called
  • 00:08:34
    share capital.
  • 00:08:36
    This share capital, children, is of three types.
  • 00:08:39
    How many types is this share capital?
  • 00:08:41
    Of three types.
  • 00:08:42
    The first is authorized share capital.
  • 00:08:50
    The second is issued share capital.
  • 00:08:57
    The third is subscribed share capital.
  • 00:09:05
    Sir, what is the meaning of these three?
  • 00:09:07
    See children, when every company forms itself, Who does it?
  • 00:09:12
    The promoter forms.
  • 00:09:13
    The one who makes the company is called the promoter.
  • 00:09:15
    So whenever the company is formed, So one document is very important, Which you
  • 00:09:21
    have to make for any company.
  • 00:09:25
    What do we call that document?
  • 00:09:27
    The Memorandum of Association.
  • 00:09:31
    What do we call it?
  • 00:09:32
    The Memorandum of Association.
  • 00:09:34
    So sir, what is the Memorandum of Association?
  • 00:09:37
    It is such a document, In which a lot of things are written about the company.
  • 00:09:42
    Like how much will be the company's liability?
  • 00:09:45
    Where will be the company's registered office?
  • 00:09:48
    What will be the company's name?
  • 00:09:51
    How much capital will be invested in the company?
  • 00:09:55
    Right?
  • 00:09:56
    So how much capital will be invested?
  • 00:09:58
    It is written in the Memorandum, What is it?
  • 00:10:00
    How much money is the company going to do business in its lifetime?
  • 00:10:06
    Or how much money will be required for the company to do business?
  • 00:10:09
    Which the company will raise in public.
  • 00:10:12
    So that amount, Which while making the company, You write in your Memorandum.
  • 00:10:18
    Let's suppose I made a company, And wrote in my Memorandum that I will raise 10
  • 00:10:23
    crores in public.
  • 00:10:26
    So the 10 crores that I wrote in the Memorandum, This is called Authorized
  • 00:10:31
    Share Capital.
  • 00:10:32
    So Authorized Share Capital is that capital, Which is written in the Memorandum
  • 00:10:37
    of Association.
  • 00:10:38
    It is written in the most important document of the company.
  • 00:10:41
    That the company in its lifetime, Will raise this much amount maximum from the
  • 00:10:46
    public.
  • 00:10:47
    Sir, after 10 crores, If you need more money, Can't you do it?
  • 00:10:52
    Son, I can do that too.
  • 00:10:53
    You can alter the Memorandum later.
  • 00:10:55
    You can change it.
  • 00:10:56
    I teach all this in CA.
  • 00:10:57
    When I teach law in CA, So there, I teach this whole company's law.
  • 00:11:03
    I teach the company's act.
  • 00:11:04
    So there I will teach you in detail.
  • 00:11:06
    But now just understand that, The capital clause in the Memorandum, The amount
  • 00:11:12
    written in the capital clause, Company during the lifetime, Will raise so much
  • 00:11:15
    money, We call it Authorized Share Capital.
  • 00:11:19
    So let's suppose, In this company's Authorized Memorandum, It is written 10
  • 00:11:22
    crores.
  • 00:11:27
    10 crores.
  • 00:11:29
    10 crores.
  • 00:11:30
    10 crores is written.
  • 00:11:31
    And shares are written.
  • 00:11:33
    Divided into, Divided into, Shares of rupees 10.
  • 00:11:41
    1 share is of 10 rupees.
  • 00:11:43
    So what does it mean?
  • 00:11:44
    It means that, 1 crore shares will be there.
  • 00:11:47
    1 of 10 rupees.
  • 00:11:48
    So if 1 of 10 rupees is there, Then anyone can buy.
  • 00:11:51
    Right?
  • 00:11:51
    Anyone means, Anyone from the public.
  • 00:11:53
    As much as you want.
  • 00:11:54
    1 share is of 10 rupees.
  • 00:11:56
    In the whole of India, This thing will be told, That brother, Company is
  • 00:11:59
    coming.
  • 00:12:00
    Company needs money.
  • 00:12:01
    1 crore shares will come.
  • 00:12:03
    So this is the maximum.
  • 00:12:04
    Authorized.
  • 00:12:04
    Okay?
  • 00:12:05
    Now this is the maximum.
  • 00:12:07
    So the company, In one go, Will not raise all this money.
  • 00:12:10
    The company will do it slowly.
  • 00:12:11
    Children.
  • 00:12:11
    So the company, From this, From this, As much as issued in the public, As
  • 00:12:21
    much as issued in the public, That is called, Issued share capital.
  • 00:12:25
    So what is authorized?
  • 00:12:27
    As much as the company is authorized.
  • 00:12:28
    As much as the company has the right, As much as the company has the right,
  • 00:12:31
    That during the lifetime, How much money it will raise, That is called
  • 00:12:33
    authorized.
  • 00:12:35
    What is issued?
  • 00:12:36
    As much as the public, Actually offered to the children.
  • 00:12:39
    As much as the public, Actually gave, That take this, So many shares, You can
  • 00:12:42
    invest.
  • 00:12:43
    That is called issued.
  • 00:12:44
    Let's suppose, I tell you, Look, 1 crore shares were there.
  • 00:12:47
    Total money is 10 crores.
  • 00:12:49
    Keep in mind, What is this?
  • 00:12:51
    This is share capital.
  • 00:12:53
    This is share capital.
  • 00:12:55
    This is the number of shares.
  • 00:12:57
    This is the number of shares.
  • 00:12:59
    This is the amount of share.
  • 00:13:02
    How much is one share?
  • 00:13:03
    So if you have to make 10 crores, If you have to make 10 crores, One of 10
  • 00:13:08
    rupees, So 1 crore shares have been made.
  • 00:13:11
    Let's suppose, The company has issued 50 lakh shares in the public.
  • 00:13:15
    Issue 50 lakh shares.
  • 00:13:18
    Okay, Now I am the company.
  • 00:13:19
    I got it published in the newspaper.
  • 00:13:21
    I told the public, That it is like this, I want to sell 50 lakh shares of my
  • 00:13:25
    company.
  • 00:13:26
    One of 10 rupees.
  • 00:13:27
    So as much as you want to buy, As much as your account book is, Which you like.
  • 00:13:31
    If you want to buy 2, Send 20 rupees.
  • 00:13:33
    If you want to buy 5, Send 50 rupees.
  • 00:13:36
    One of 10 rupees.
  • 00:13:37
    Simple thing.
  • 00:13:38
    So whoever has to buy as many shares, You apply for shares.
  • 00:13:43
    Sir, Why do you have to apply?
  • 00:13:44
    I have to apply because, Because there are only 50 lakhs.
  • 00:13:47
    If more people have applied, If there is an application for 70 lakhs, Then I
  • 00:13:50
    can only give 50.
  • 00:13:52
    Right?
  • 00:13:52
    It can come for less, It can come for more, It can be sold for 50 lakhs.
  • 00:13:56
    So I have offered this to the public in a way, That I have 50 lakh shares.
  • 00:14:01
    Tell me as much as you want.
  • 00:14:03
    Simple thing.
  • 00:14:04
    Right?
  • 00:14:04
    Now as much as the public wants to buy from this, That is, As much as the
  • 00:14:11
    public subscribed, That the public said, Okay, We are coming.
  • 00:14:16
    This is called subscribed share capital.
  • 00:14:18
    And in simple language, Let's suppose kids, I have, In my offline coaching,
  • 00:14:25
    There are 100 seats in a batch.
  • 00:14:28
    There are 100 seats in a batch.
  • 00:14:31
    And I said that I will teach 2 batches.
  • 00:14:34
    So I can teach maximum 200 students.
  • 00:14:37
    Right?
  • 00:14:38
    How many students can I teach maximum?
  • 00:14:39
    200.
  • 00:14:40
    So I know my capacity.
  • 00:14:42
    So my maximum capacity is called authorized.
  • 00:14:46
    Now I have opened only one batch.
  • 00:14:48
    I opened the first batch.
  • 00:14:50
    I said not two, Now I will open the first batch of 100 students.
  • 00:14:54
    This has been issued.
  • 00:14:55
    That I am offering so many seats now.
  • 00:14:58
    Now how many students should come?
  • 00:15:00
    Who knows 50 should come?
  • 00:15:01
    Who knows 40 should come?
  • 00:15:02
    Who knows 100 should be full?
  • 00:15:03
    Who knows more than 100 people should come?
  • 00:15:05
    But I can only teach 100.
  • 00:15:07
    I have only 100 seats.
  • 00:15:09
    Right?
  • 00:15:09
    So what will we say to him?
  • 00:15:10
    As much as the public is actually subscribing, It is called Subscribed Share
  • 00:15:14
    Capital.
  • 00:15:15
    Understood?
  • 00:15:16
    So the maximum shares the company offers, Can do in its lifetime, Authorized.
  • 00:15:21
    As much as it has done now, Issued.
  • 00:15:24
    As much as the public was interested, The public was interested, What will we
  • 00:15:28
    say to him?
  • 00:15:29
    Subscribed.
  • 00:15:31
    What is it sir?
  • 00:15:32
    Very good.
  • 00:15:33
    Write kids.
  • 00:15:34
    Have you written?
  • 00:15:35
    Okay.
  • 00:15:36
    Okay.
  • 00:15:37
    Now put the heading kids.
  • 00:15:40
    Capital Subscription.
  • 00:15:45
    The public who is sending money in Subscribed Capital, Or the public who is
  • 00:15:50
    interested in buying your shares, There can also be three cases of that kids.
  • 00:15:55
    One is Full Subscription.
  • 00:16:00
    One is Under Subscription.
  • 00:16:04
    And one is Over Subscription.
  • 00:16:10
    Sir, what does this mean?
  • 00:16:13
    Come on man.
  • 00:16:15
    In Capital Subscription, Full Subscription means, As much as you offer, You
  • 00:16:23
    have also been subscribed.
  • 00:16:25
    That is, you have offered 50 lakh shares, How many shares did we offer?
  • 00:16:32
    50 lakh shares.
  • 00:16:33
    We offered 50 lakh shares.
  • 00:16:36
    And our 50 lakh shares have also been subscribed.
  • 00:16:39
    This is called Full Subscription.
  • 00:16:41
    Under Subscription means, The public did not show interest.
  • 00:16:45
    That is, the shares you offered are more.
  • 00:16:48
    And the subscribed ones are less.
  • 00:16:51
    Like I offered 100 seats, The kids did not come to study.
  • 00:16:53
    He told me that we do not study.
  • 00:16:55
    We will study somewhere else.
  • 00:16:56
    I said okay.
  • 00:16:57
    No matter.
  • 00:16:58
    As you like it.
  • 00:16:59
    Isn't it brother?
  • 00:16:59
    So this is how the company says that Brother, we have offered 50 lakh shares.
  • 00:17:04
    Only 48 lakh sold.
  • 00:17:06
    Not sold much.
  • 00:17:07
    This is called Under Subscription.
  • 00:17:09
    What is over?
  • 00:17:10
    The line is stuck brother.
  • 00:17:11
    The offer was made.
  • 00:17:15
    Subscription is coming for more than that.
  • 00:17:18
    Subscription is coming for more than that.
  • 00:17:19
    That I have 50 lakh shares.
  • 00:17:21
    The public is asking for 70 lakh.
  • 00:17:23
    I have 100 seats.
  • 00:17:24
    If the child is of 150, Brother, I am sitting anywhere.
  • 00:17:26
    I said get a chair from home.
  • 00:17:27
    I don't have a chair brother.
  • 00:17:29
    I don't have this place.
  • 00:17:31
    Over Subscription.
  • 00:17:32
    So one is full subscription.
  • 00:17:34
    One is under subscription.
  • 00:17:36
    One is over subscription.
  • 00:17:38
    Understand this too.
  • 00:17:40
    It is a simple concept.
  • 00:17:41
    Okay.
  • 00:17:42
    Our kids understood this too.
  • 00:17:44
    What is the matter?
  • 00:17:44
    I am not in a hurry.
  • 00:17:46
    I will teach the shares very calmly.
  • 00:17:48
    I will teach one by one from the root.
  • 00:17:50
    So I will not let any problem come in it.
  • 00:17:52
    Just very carefully.
  • 00:17:54
    Do not skip the class kids.
  • 00:17:55
    All the classes have to be done in order.
  • 00:17:57
    And see what fun your basics will be.
  • 00:17:59
    This is fine.
  • 00:18:00
    Come on.
  • 00:18:01
    Now we will understand a little thing kids.
  • 00:18:04
    In real life normally Like there are 50 lakh shares.
  • 00:18:09
    There are 50 lakh shares.
  • 00:18:12
    One is of 10 rupees.
  • 00:18:14
    One is of 10 rupees.
  • 00:18:15
    So now what happens in real life or practical life That the company takes 10
  • 00:18:19
    out of 10 in one go.
  • 00:18:21
    Will take 10 out of 10 from you in one go.
  • 00:18:22
    Will say that brother give 10 rupees out of 10 in one go.
  • 00:18:25
    End of the matter.
  • 00:18:26
    Who will be in tension again and again.
  • 00:18:28
    But we are taught this.
  • 00:18:30
    We are shown this.
  • 00:18:32
    Or we are being taught this in accounts.
  • 00:18:34
    That brother the company can also take it by breaking it.
  • 00:18:37
    And this used to happen.
  • 00:18:38
    It does not happen now.
  • 00:18:38
    It used to happen before.
  • 00:18:40
    So the company can also take this 10 rupees slowly.
  • 00:18:43
    Like the company said Let's go in January.
  • 00:18:46
    Give one rupee.
  • 00:18:47
    Give 2 rupees in Feb.
  • 00:18:49
    Give 3 rupees in March.
  • 00:18:50
    Give 4 rupees in April.
  • 00:18:52
    We do not put a burden of 10 rupees on you at once.
  • 00:18:55
    Now suppose someone bought 10 lakh shares out of 50 lakhs.
  • 00:18:59
    So 10 lakhs into 10.
  • 00:19:00
    He has to give 1 crore rupees.
  • 00:19:02
    Now how did he give 1 crore in one go?
  • 00:19:04
    So the company said You have to buy 10 lakh shares out of this.
  • 00:19:07
    So first you give 1 rupee on 10 lakhs in January.
  • 00:19:10
    Give 10 lakhs.
  • 00:19:11
    Then give 2 rupees on 10 lakhs.
  • 00:19:13
    Give 20 lakhs.
  • 00:19:14
    Then give 3 rupees on 10 lakhs.
  • 00:19:15
    Give 30 lakhs.
  • 00:19:17
    Then give 4 rupees on 10 lakhs.
  • 00:19:18
    Give 40 lakhs.
  • 00:19:19
    Then it will be completed.
  • 00:19:20
    See, he did 1 crore slowly.
  • 00:19:22
    There was no burden on him.
  • 00:19:23
    So what does the company do?
  • 00:19:25
    The company says On all 50 lakh shares In all the 50 lakh shares We will take
  • 00:19:31
    the money by breaking it.
  • 00:19:33
    We will take the money slowly.
  • 00:19:34
    So first 1 rupee, then 2 rupees, then 3 rupees, then 4 rupees.
  • 00:19:37
    So when the company takes money like this So the first amount the company will
  • 00:19:42
    ask What is it called?
  • 00:19:44
    Application money.
  • 00:19:47
    What is it called?
  • 00:19:49
    Application money.
  • 00:19:50
    What is the second called?
  • 00:19:53
    Allotment money.
  • 00:19:55
    What happens after that?
  • 00:19:57
    After that there are calls.
  • 00:19:59
    What are they called?
  • 00:20:00
    Calls.
  • 00:20:01
    Hi, hello, calling.
  • 00:20:02
    These are calls.
  • 00:20:03
    This is called first call.
  • 00:20:06
    This is called second and final call.
  • 00:20:09
    Why is this called final?
  • 00:20:11
    Because it is the last one.
  • 00:20:12
    10 rupees have been completed.
  • 00:20:13
    These are called calls.
  • 00:20:14
    Now calls are the wish of the company.
  • 00:20:15
    The company has made 1, the company has made 2.
  • 00:20:17
    The company over depends.
  • 00:20:18
    It could have been that the company says There is 10 rupees.
  • 00:20:20
    First give 3.
  • 00:20:22
    Then give 2.
  • 00:20:23
    Then give 5.
  • 00:20:24
    So this will be called application.
  • 00:20:26
    This will be called allotment.
  • 00:20:27
    This will be called first and final call.
  • 00:20:29
    You just have to put the final with the last.
  • 00:20:31
    This has to be kept in mind.
  • 00:20:33
    Okay son.
  • 00:20:34
    So whenever the company asks for money on shares In your question So it may be
  • 00:20:41
    that In the question it will be written like this Break it and bring it.
  • 00:20:43
    So first of all say application.
  • 00:20:45
    Then say allotment.
  • 00:20:46
    Then say first call.
  • 00:20:48
    Then say second and final call.
  • 00:20:49
    Call will depend on how much it will be.
  • 00:20:50
    It will not be more than this in any question.
  • 00:20:52
    Okay children.
  • 00:20:53
    Now sir, if you take 10 for 10 at the same time.
  • 00:20:57
    If you take it at the same time.
  • 00:21:00
    So say that children.
  • 00:21:01
    Application and allotment.
  • 00:21:04
    Application and allotment happened together.
  • 00:21:06
    That the public has also applied.
  • 00:21:08
    And we have also given them shares.
  • 00:21:09
    To give shares, it is called allotment.
  • 00:21:11
    What do children say?
  • 00:21:12
    Okay.
  • 00:21:13
    So if it happens at the same time.
  • 00:21:14
    Then you have to say application and allotment.
  • 00:21:16
    If it is different, then first application.
  • 00:21:18
    Then allotment.
  • 00:21:19
    Then calls.
  • 00:21:19
    Okay.
  • 00:21:20
    Take a screenshot of this too.
  • 00:21:22
    Now children.
  • 00:21:23
    We move towards its journal entries.
  • 00:21:26
    Sir, this application allotment.
  • 00:21:28
    First call.
  • 00:21:29
    Second call.
  • 00:21:29
    What will be their journal entry?
  • 00:21:31
    It is very simple.
  • 00:21:32
    Children.
  • 00:21:32
    Very very very simple.
  • 00:21:35
    Do not keep confusion without talking.
  • 00:21:37
    It is very simple.
  • 00:21:38
    Look, tell me one thing.
  • 00:21:39
    This is a company.
  • 00:21:43
    Public is investing money in this company.
  • 00:21:46
    The public who is investing money.
  • 00:21:48
    It is considering that it is our business.
  • 00:21:50
    Because you are investing in your business.
  • 00:21:52
    You are also investing money in the company.
  • 00:21:53
    So you have become an owner.
  • 00:21:55
    You have become the owner.
  • 00:21:57
    What did you call the owner in technical terms?
  • 00:22:00
    Shareholder.
  • 00:22:01
    Brother, this is a shareholder.
  • 00:22:03
    Because it has a share.
  • 00:22:04
    It is not the full owner of the company.
  • 00:22:05
    The owner becomes full.
  • 00:22:06
    It is just the owner of this much share.
  • 00:22:09
    He was called a shareholder.
  • 00:22:10
    So when you invest money in your business.
  • 00:22:15
    First journal entry in class 11.
  • 00:22:16
    First journal entry.
  • 00:22:18
    When I do my own business.
  • 00:22:19
    I do business.
  • 00:22:20
    I invest money.
  • 00:22:21
    What entry did we read, children?
  • 00:22:23
    Sir, the entry was read.
  • 00:22:24
    Bank account debit or cash account debit.
  • 00:22:27
    To capital account.
  • 00:22:30
    Was it read or not?
  • 00:22:31
    Tell me.
  • 00:22:32
    Was this the first entry you read in class 11?
  • 00:22:33
    Cash to capital or bank to capital.
  • 00:22:36
    The first entry was to start the business.
  • 00:22:38
    To invest money in the business.
  • 00:22:40
    Bank to capital or cash to capital.
  • 00:22:42
    You are still doing this, man.
  • 00:22:44
    You are still the owner.
  • 00:22:46
    Are you investing money in any business?
  • 00:22:48
    So the entry will still be this.
  • 00:22:50
    Bank to capital.
  • 00:22:51
    This will be the entry, children.
  • 00:22:53
    But this time the money the company is taking.
  • 00:22:56
    As I told you.
  • 00:22:57
    It is taking a break.
  • 00:22:58
    Like the first money the company asked for the application.
  • 00:23:04
    Then asked for allotment.
  • 00:23:08
    Then asked for the first call.
  • 00:23:12
    And then asked for the second and final call.
  • 00:23:17
    So children, how will this be a journal entry?
  • 00:23:20
    See, this is what has to happen.
  • 00:23:21
    Let's suppose the company has to take 10 rupees.
  • 00:23:23
    Bank to capital 10 rupees.
  • 00:23:25
    But there is 1 on the application.
  • 00:23:26
    Then there is 2.
  • 00:23:27
    Then there is 3.
  • 00:23:28
    Then there is 4.
  • 00:23:29
    So how will the company take money?
  • 00:23:31
    See, the company will first take out an article in the newspaper.
  • 00:23:33
    That brother, we want to sell shares.
  • 00:23:35
    Those who are also interested.
  • 00:23:37
    Send that application money.
  • 00:23:39
    The light has gone.
  • 00:23:39
    The lights will be a little less, children.
  • 00:23:41
    But manage a little.
  • 00:23:43
    No problem.
  • 00:23:44
    So if the company is saying this first.
  • 00:23:47
    That brother, whoever is interested in buying our company's shares.
  • 00:23:51
    Send that 1 rupee.
  • 00:23:52
    So see what will happen first?
  • 00:23:54
    Application is coming.
  • 00:23:55
    So we will enter bank account debit.
  • 00:23:57
    To share application account.
  • 00:24:02
    Bank account debit.
  • 00:24:04
    To share application account.
  • 00:24:06
    What does bank account debit mean to share application, children?
  • 00:24:09
    Bank debit is happening because money is coming in the bank.
  • 00:24:12
    And share application has been credited.
  • 00:24:14
    Share application is representing the giver.
  • 00:24:16
    How many people have sent money?
  • 00:24:18
    Now we cannot write everyone's name.
  • 00:24:19
    That this is of A, this is of B, this is of C, this is of D, this is of E, this
  • 00:24:22
    is of F, this is of G, this is of H.
  • 00:24:23
    Don't know how many people will send?
  • 00:24:24
    Like a lot of people had offered for 50 lakh shares.
  • 00:24:28
    Now 60 lakhs, 70 lakhs, 80 lakhs, don't know how many people will send.
  • 00:24:31
    So everyone's name cannot be written in different entries.
  • 00:24:33
    So we have given only one representation.
  • 00:24:35
    Bank debit to share application.
  • 00:24:38
    Where will this money go, sir?
  • 00:24:41
    Tell me why this money has come?
  • 00:24:43
    Has come for capital.
  • 00:24:44
    So the entry will be share application account debit.
  • 00:24:47
    To share capital.
  • 00:24:50
    Share application account debit to share capital.
  • 00:24:53
    Now kids if you look carefully.
  • 00:24:56
    So here the application was credited.
  • 00:24:57
    Here the application was debited.
  • 00:24:59
    So this debit will be deducted from the credit.
  • 00:25:01
    What is the ultimate entry coming?
  • 00:25:03
    Bank debit to share capital is coming or not?
  • 00:25:06
    See if this entry has come or not.
  • 00:25:08
    But 1 out of 10 has just happened.
  • 00:25:11
    Bank debit to share capital is happening or not?
  • 00:25:13
    Because the application will be deducted from the application.
  • 00:25:16
    But sir, can I do only one entry?
  • 00:25:18
    Bank to capital.
  • 00:25:19
    No kids.
  • 00:25:20
    You have to do two entries.
  • 00:25:21
    Because this money is only for the application.
  • 00:25:23
    If you will do only one entry.
  • 00:25:25
    Then here also bank to capital.
  • 00:25:29
    How will you know which application?
  • 00:25:31
    Which allotment?
  • 00:25:32
    Which first call?
  • 00:25:33
    Which second and final call?
  • 00:25:34
    So you should know.
  • 00:25:36
    If you should know then the entries should be different.
  • 00:25:38
    That's why the entries will be only two.
  • 00:25:40
    Okay kids.
  • 00:25:41
    So first of all.
  • 00:25:42
    Bank account debit to share application.
  • 00:25:44
    Share application debit to share capital.
  • 00:25:46
    Now we got to know that.
  • 00:25:48
    Let's suppose the application came for 50 lakh shares.
  • 00:25:51
    Came for 50 lakh shares.
  • 00:25:53
    Now when to give allotment?
  • 00:25:55
    The shareholder will not dream.
  • 00:25:58
    That the company will go in his dream.
  • 00:26:00
    Hey shareholder.
  • 00:26:01
    Send money tomorrow.
  • 00:26:02
    Send money tomorrow.
  • 00:26:04
    Will not dream.
  • 00:26:05
    You will have to ask money from him.
  • 00:26:08
    So what entry do we do for that?
  • 00:26:10
    Let's do due first.
  • 00:26:12
    What is the entry to do due?
  • 00:26:13
    Share allotment account debit.
  • 00:26:18
    Share allotment account debit to share capital.
  • 00:26:22
    See whenever you have to take money from someone.
  • 00:26:24
    Someone is your debtor.
  • 00:26:25
    So you debit him.
  • 00:26:27
    You said share allotment debit to share capital.
  • 00:26:30
    This money will go in capital.
  • 00:26:31
    When you will get.
  • 00:26:33
    So what will you do entry?
  • 00:26:35
    Bank account debit to share allotment.
  • 00:26:39
    Bank account debit to share allotment account.
  • 00:26:44
    Now see from this allotment debit.
  • 00:26:46
    This allotment credit is deducted.
  • 00:26:49
    From allotment debit.
  • 00:26:51
    Allotment credit is deducted.
  • 00:26:53
    So see bank to capital.
  • 00:26:54
    Again the ultimate entry is happening.
  • 00:26:56
    Bank debit to share capital.
  • 00:26:58
    Is it happening or not?
  • 00:26:59
    How much will this entry be this time?
  • 00:27:00
    2 rupees.
  • 00:27:01
    So you got 2 out of 10.
  • 00:27:03
    So see you got 1 rupee.
  • 00:27:04
    Then you got 2 rupees.
  • 00:27:05
    That is, 3 out of 10 have been got.
  • 00:27:07
    Now we need first call next month.
  • 00:27:09
    So we will call the shareholder again.
  • 00:27:11
    Shareholder shareholder.
  • 00:27:12
    Give money.
  • 00:27:13
    Give money.
  • 00:27:13
    So ask for first call.
  • 00:27:14
    Same like this.
  • 00:27:15
    What will be the entry?
  • 00:27:16
    Share first call debit.
  • 00:27:19
    To share capital.
  • 00:27:22
    And when the shareholder will give money.
  • 00:27:25
    So bank account debit.
  • 00:27:28
    To share first call.
  • 00:27:29
    When you will get.
  • 00:27:30
    So bank debit to share first call.
  • 00:27:32
    It is a simple thing.
  • 00:27:33
    First call debit means.
  • 00:27:35
    We are deducing money from it.
  • 00:27:36
    Give so much money.
  • 00:27:37
    You will get.
  • 00:27:37
    So bank to share first call.
  • 00:27:39
    Then see first call debit also happened.
  • 00:27:40
    First call credit also happened.
  • 00:27:42
    So from first call.
  • 00:27:44
    First call will be deducted.
  • 00:27:45
    Entry again bank to capital.
  • 00:27:47
    This time from how much?
  • 00:27:49
    From 3 rupees.
  • 00:27:50
    Because it was of 3 rupees.
  • 00:27:52
    Perfect.
  • 00:27:54
    Then second and final call last.
  • 00:27:57
    What do we have to do in second and final call?
  • 00:27:59
    Again we will ask for call.
  • 00:28:00
    And money will be got.
  • 00:28:02
    Then call the shareholder.
  • 00:28:04
    Share second and final call debit.
  • 00:28:08
    To share capital.
  • 00:28:12
    And when money will be got.
  • 00:28:15
    So bank account debit.
  • 00:28:18
    To share second and final call.
  • 00:28:23
    Bank account debit to share second and final call.
  • 00:28:26
    This son will get 4 rupees.
  • 00:28:29
    So see if the company will receive 10 rupees by breaking.
  • 00:28:32
    But done.
  • 00:28:34
    Right.
  • 00:28:34
    Done or not done.
  • 00:28:35
    Just remember one thing children.
  • 00:28:38
    Which is very important.
  • 00:28:40
    Which you should know.
  • 00:28:41
    What is that tell?
  • 00:28:42
    That allotment first call and second call.
  • 00:28:46
    What is that?
  • 00:28:48
    Allotment first call and second call.
  • 00:28:51
    These will be due first.
  • 00:28:55
    Due means first you will ask for money.
  • 00:28:58
    Then will receive.
  • 00:29:01
    Then will receive.
  • 00:29:03
    See first did due.
  • 00:29:04
    Allotment to capital.
  • 00:29:05
    Bank to allotment.
  • 00:29:06
    First call to capital.
  • 00:29:07
    Bank to first call.
  • 00:29:08
    Second call to capital.
  • 00:29:10
    Bank to second and final call.
  • 00:29:11
    So bank entry is later.
  • 00:29:13
    Because first you call and ask for money.
  • 00:29:16
    Then you do this entry.
  • 00:29:17
    Right.
  • 00:29:18
    In these three.
  • 00:29:19
    But application is received first.
  • 00:29:24
    Application will be received first.
  • 00:29:30
    Then will be transferred in capital.
  • 00:29:33
    Then will be transferred in capital.
  • 00:29:37
    Right.
  • 00:29:37
    Sir why this happened?
  • 00:29:38
    It was received first.
  • 00:29:39
    Then transferred.
  • 00:29:40
    Children now you don't know.
  • 00:29:42
    Who is interested in becoming your shareholder.
  • 00:29:44
    In application you give an open notice to the public.
  • 00:29:47
    That brother we are bringing shares.
  • 00:29:49
    Those who are interested.
  • 00:29:50
    Apply us.
  • 00:29:52
    Tell us that you want to buy our shares.
  • 00:29:54
    How will we know?
  • 00:29:55
    Send one rupee.
  • 00:29:56
    Multiply by the number of shares you want.
  • 00:29:58
    If all our shares have been sold.
  • 00:30:00
    Then we will return the money to you.
  • 00:30:02
    If not sold.
  • 00:30:03
    Then we will give you shares.
  • 00:30:05
    It is a simple thing.
  • 00:30:06
    So here children first money is received.
  • 00:30:08
    Bank to share application.
  • 00:30:10
    And after that we get clarified here.
  • 00:30:13
    That is fine.
  • 00:30:13
    These 50 people are our shareholders.
  • 00:30:16
    Now we will call them and ask for allotment.
  • 00:30:17
    Then you will get money.
  • 00:30:19
    Will ask for the first call.
  • 00:30:20
    Then you will get money.
  • 00:30:20
    Will ask for the second call.
  • 00:30:21
    Then you will get money.
  • 00:30:22
    So such children we have.
  • 00:30:25
    These are the basic 8 entries.
  • 00:30:27
    Which are the roots of this chapter.
  • 00:30:29
    Which are the roots of this chapter.
  • 00:30:31
    You should get these 8 entries very well.
  • 00:30:35
    And I will do these 8 entries in the whole chapter.
  • 00:30:38
    There will be some plus, minus, up and down adjustments in them.
  • 00:30:41
    The rest will be these 8 entries.
  • 00:30:43
    In the whole chapter.
  • 00:30:44
    In the whole chapter.
  • 00:30:46
    So in today's class, children, I have covered you a little theory portion.
  • 00:30:50
    Told about shares.
  • 00:30:51
    Told about share capital.
  • 00:30:53
    Told about kinds of share capital.
  • 00:30:55
    Right.
  • 00:30:56
    After that we also did entries.
  • 00:30:58
    Now we have to see one more small thing.
  • 00:31:01
    That is called up money.
  • 00:31:04
    And paid up money.
  • 00:31:07
    So what is called up and paid up, children?
  • 00:31:09
    Called up is how much money the company has asked for now.
  • 00:31:12
    It is called called up.
  • 00:31:13
    Like 1, 2, 3, 4 out of 10.
  • 00:31:16
    The company said that we will take such money.
  • 00:31:19
    This is what has been asked so far.
  • 00:31:20
    This is uncalled.
  • 00:31:22
    This is uncalled.
  • 00:31:22
    This is not asked at all.
  • 00:31:24
    So how much is called up?
  • 00:31:25
    6 rupees.
  • 00:31:26
    This will be called up.
  • 00:31:28
    So how much money the company has asked for.
  • 00:31:31
    We call it called up.
  • 00:31:33
    Okay.
  • 00:31:34
    And sir, what does paid up mean?
  • 00:31:36
    Paid up means how much money has been received.
  • 00:31:41
    How much money the children have received.
  • 00:31:44
    We call it paid up capital.
  • 00:31:46
    For how much money the public has paid.
  • 00:31:48
    We call it paid up capital.
  • 00:31:50
    Okay, son.
  • 00:31:52
    Is it clear?
  • 00:31:53
    Is it right or not?
  • 00:31:54
    Perfect.
  • 00:31:55
    So we have understood called up.
  • 00:31:58
    We have understood paid up.
  • 00:31:59
    We will need them in the coming classes.
  • 00:32:01
    Along with that, you have also understood the basic general entries.
  • 00:32:04
    How do they happen?
  • 00:32:06
    This is also clear to you.
  • 00:32:07
    Before this, we saw that the company took money by breaking it.
  • 00:32:10
    Before that, there are also full subscription, under subscription, over
  • 00:32:13
    subscription.
  • 00:32:15
    Before that, we read about kinds of share capital.
  • 00:32:17
    So you should know all these things.
  • 00:32:19
    Keep clarity in mind.
  • 00:32:21
    From the next class.
  • 00:32:23
    That is, in the next class, we will start its questions in a better way.
  • 00:32:27
    And we will break it.
  • 00:32:28
    Now it is time to break it.
  • 00:32:29
    We have come in October.
  • 00:32:31
    We have to do a lot of hard work in this month.
  • 00:32:32
    We have to finish B.Sc and Economics.
  • 00:32:34
    And we have to finish this book in the accounts.
  • 00:32:36
    Okay.
  • 00:32:37
    So thank you so much everyone for joining in.
  • 00:32:39
    That's all for today.
  • 00:32:40
    See you tomorrow in the next class.
  • 00:32:42
    With some more new things.
  • 00:32:43
    Till then keep growing, keep glowing and keep smiling.
  • 00:32:51
    Thank you.
Tags
  • Company Accounts
  • Shares
  • Accounting
  • Share Capital
  • Investment
  • Capital Subscription
  • Financial Literacy
  • Education
  • Business
  • Risk Management