Ali and Ahmed carrying business separately ascontractors jointly take up the work of constructing a Research Complex of Yousaf Tanneries Ltd, at an agreed price of Rs.250000 payable in cash Rs.200000 and in fully paid shares of a company forbalance Rs.50000. A joint bank account is opened in which Ali andAhmed paid Rs.62500 and Rs.75000 respectively. The following expenses were incurred in completing the construction and thecontract price was duly received.
i) Wages paid Rs.75,000.
ii) Materials purchased forRs.50000.
iii) Material supplied by Ali fromhis stock Rs.22500.
iv) Consulting Engineers fees paid by AhmedRs.5000.
The accounts wereclosed. Ali taking up all the shares of the company at an agreedvalue of Rs.40,000 and Ahmed taking the remaining stock ofmaterials at Rs.7,500. Profit or loss is shared by Ali and Ahmed equally.
Required:
· Issued on par 250, 8% preference shares of Rs.100 each.
· Issued 500 ordinary shares of Rs.100 each at Rs.120 all amountreceived in cash.
· Purchased building costing Rs.165000 and issued 1000 8% preferenceshares of Rs.100 each for full consideration.
· Issued 5000 ordinary shares of Rs.10 each to promoters asremuneration for their services.