A company issued 10,000 shares and received applications for 8,000 shares. This situation is called under-subscription of shares.

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PRACTICAL PROBLEMS

(Under Subscription)

Usha Co. Ltd. issued Rs 12,000 Equity shares of Rs 100 each payable as under-

Rs 30 on application	Rs 20 on allotment
Rs 35 on first call	Rs 15 on second call

Public applied for Rs 10,000 shares and all the applicants were accepted by the company. Allotment of the shares were made. All the money on allotment, first call and second call were received.

Show the journal of the Company.

Q. Star Ltd. is registered with capital of ₹ 50,00,000 divided into 50,000 equity shares of ₹ 100 each, The Company issued 25,000 equity shares for subscription. Subscription was received for 23,750 shares and all the due amount was duly received, except the first and final call of ₹ 20 per share on 600 shares. Show the 'Share Capital' in the Balance Sheet of the company.

Q. ABC Company Ltd.offered for subscription 20,000 shares of ₹ 10 each payable ₹ 3 on application and ₹ 5 on allotment for each share. Applications were received fro 30,000 shares . Letters of regret were issued to applicants for 5,000 shares and their application money was refunded . Application money for other 5,000 shares was applied towards the payment for allotment money . The balance of allotment money was also received in due time .
You are to prepare the journal , Cash Book , Ledger Accounts and the Balance Sheet of the company.

Q. Arti Ltd. offered for subscription 20,000 shares of ₹ 10 each payable ₹ 3 on application, ₹ 5 on allotment and balance on first and final call. Applications were received for 30,000 shares. Letters of regret were issued to applicants for 5,000 shares and their application money was refunded. Application money for other 5,000 shares was applied towards the payment for allotment money. The balance of allotment money was also received in due time. Company didn't make first and final call.
You are to prepare the Journal, Cash Book, Ledger Accounts and show 'Share Capital' in the Balance Sheet of the company.

PRACTICAL PROBLEMS

(Forfeiture of shares issued at par)

Vijay Ltd. issued Rs 40,000 Equity shares of Rs 10 each payable as follows.

On Application	:	Rs 2	On Allotment	:	Rs 3
On First Call	:	Rs 3	On Second Call	:	Rs 2

The company received applications for Rs 50,000 equity shares. Allotment for shares was made on pro rata basis. Share allotment and calls were made and as also received except Raja holding Rs 1,000 shares failed to pay both the calls. His shares were forfeited after second call.

Record the above transactions in books of Vijay Ltd.

Note: Excess money received on share application 10,000 × Rs 2 = 20,000 will be diverted to share allotment A/c.

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