Question

A Ltd. invited applications for issuing 1,00,000 shares of ₹ 10 each at a premium of ₹ 1 per share. The amount was payable as follows:

On Application	–	3 per share;
On Allotment	–	3 per share (including premium);
On First Call	–	3 per share;
On Second and Final Call	–	Balance amount.

Applications for 1,60,000 shares were received. Allotment was made on the following basis:

(i)	To applicants for 90,000 shares	–	40,000 shares;
(ii)	To applicants for 50,000 shares	–	40,000 shares;
(iii)	To applicants for 20,000 shares	–	Full shares.

Excess money paid on application is to be adjusted against the amount due on allotment and calls.

Rishabh, a shareholder, who applied for 1,500 shares and belonged to category (ii), did not pay allotment, first and second and final call money.

Another shareholder, Sudha, who applied for 1,800 shares and belonged to category (i), did not pay the first and second and final call money.

All the shares of Rishabh and Sudha were forfeited and were subsequently reissued at ₹ 7 per share fully paid.

Pass the necessary Journal entries in the books of A Ltd. Open Calls-in-Arrears Account and Calls-in-Advance Account wherever required.

Answer 1

In the books of A Ltd. Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
	Bank A/c (1,60,000 × 3)	Dr.		4,80,000
	To Share Application A/c				4,80,000
	(Being application money received on 1,60,000 shares)
	Share Application A/c	Dr.		4,80,000
	To Share Capital A/c (1,00,000 × 3)				3,00,000
	To Call-in Advance A/c (4,80,000 – 3,00,000)				1,80,000
	(Being application money adjusted on 1,00,000 shares and Excess treated as an advance)
	Share Allotment A/c (1,00,000 × 3)	Dr.		3,00,000
	To Share Capital A/c (1,00,000 × 2)				2,00,000
	To Securities Premium Reserve A/c (1,00,000 × 1)				1,00,000
	(Being allotment money due)
	Bank A/c	Dr.		1,47,300
	Calls-in-Advance A/c (1,20,000 + 30,000)	Dr.		1,50,000
	Calls-in-Arrear A/c [(1,200 × 3) – 900]	Dr.		2,700
	To Share Allotment A/c				3,00,000
	(Being allotment money received after adjusting the excess application money and non-payment on 1,200 shares)
	Share First Call A/c (1,00,000×3)	Dr.		3,00,000
	To Share Capital A/c				3,00,000
	(Being first call money due)
	Bank A/c	Dr.		2,64,600
	Calls-in-Advance A/c (1,80,000 – 1,50,000)	Dr.		30,000
	Calls-in-Arrears A/c [3,600 + (2,400 – 600)]			5,400
	To Share First Call A/c				3,00,000
	(Being amount received on first call except on 2,000 shares)
	Share Second and Final Call A/c (1,00,000 × 2)	Dr.		2,00,000
	To Share Capital A/c				2,00,000
	(Being share second and final call money due)
	Bank A/c	Dr.		1,96,000
	Call-in-Arrears A/c (2,000 × 2)	Dr.		4,000
	To Share Second and Final Call A/c				2,00,000
	(Being amount received on second and final call except on 2,000 shares)
	Share Capital A/c (2,000 × 10)	Dr.		20,000
	Securities Premium Reserve A/c (1,200 × 1)	Dr.		1,200
	To Share Forfeiture A/c [(3,600 + 900) + (800 × 5 + 600)]				9,100
	To Calls-in-Arrears A/c (2,700 + 5,400 + 4,000)				12,100
	(Being 2,000 shares forfeited for non-payment of amount due)
	Bank A/c (2,000 × 7)	Dr.		14,000
	Share Forfeiture A/c	Dr.		6,000
	To Share Capital A/c				20,000
	(Being 2000 shares reissued at ₹ 7 per share fully paid-up)
	Share Forfeiture A/c	Dr.		3,100
	To Capital Reserve A/c (9,100 – 6,000)				3,100
	(Being capital gain on reissued shares transferred)

Working Notes:

Computation Table
Categories	Shares Applied	Shares Allotted	Money received on Application @ ₹ 3	Money Transferred to Share Capital @ ₹ 3	Allotment due @ ₹ 3(including premium of ₹ 1)	Excess on Application	Refund
I	90,000	40,000	2,70,000	1,20,000	1,20,000	1,50,000	Nil
II	50,000	40,000	1,50,000	1,20,000	1,20,000	30,000	Nil
III	20,000	20,000	60,000	60,000	60,000	–	Nil

Particulars	Shares Allotted	Shares Applied	Excess on Application (₹)	Money adjusted in calls (₹)
Rishabh- Category (ii)	(1,500×40,000/50,000) = 1,200	1,500	900	–
Sudha- Category (i)	(1,800×40,000/90,000) = 800	1,800	3,000	600