Accounting for quantity of bonus shares received

A/c entries 10951 views 6 replies

Siddharth Zaveri

Mahavir Hydraulics Pvt Ltd

48 Points Joined March 2010

Dear Members,

How do I account for the quantity of bonus shares received by me?

I understand that no entry has to be passed on receipt of bonus shares. But say if I hold 500 shares of a certain company who has awarded bonus shares at 1:1, how do I account for the quantity of the 500 bonus shares received?

The only thing I can think of is go to each entry retrospectively and double the quantity retaining the investment cost but that is too cumbersome and volumnous. Is there any other way?

Thank you.

Replies (6)

Ajit Hegde

CA - Final

1367 Points Joined September 2009

No entry has to be passed in books.

While preparing the financials, show as addition-bonus issue.

Nitesh jain

Preet Vihar

22 Points Joined August 2010

Bonus share issued by the company to the shareholder will not be accounted for in the books of investor ( No journal entry will be post). Since it is a free of cost, only we have to show increased quantity of share due to which it reduced per unit cost of investment.

Hiren Vira

Business

63 Points Joined June 2009

Dear Sir,

I want to know how can I increase the quantity of shares without accounting for it by account entry on receipt of the bonus shares. Please guide me. Thanks.

Hiren Vira.

Ajit Hegde

CA - Final

1367 Points Joined September 2009

For example, if you are using tally, there is no mention of no of shares anywhere.

You have to, while preparing the financials, show as addition during the year. Value will be zero. Accordingly basic and diluted eps calculations would change because of increase in no of equity shares

Velu

CA Practice

66 Points Joined March 2007

In opening screen go to Transactions - Inventory Vouchers - Now you will get Transfer of Material screen. Do not make any entry in Source (consumption). Go to Destination (Production) . Here you can enter name of the company, bonus shares (Qty). Do not enter any value. Then accept the entry. Now your stock qty would have increased by the bonus shares received.