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.

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Solution

Issued Capital

20,000 shares at Rs 10 each

Applied

30,000 shares

Over-subscribed

10,000 shares

Applied

Allotted

Over-subscribed

25,000

20,000

5,000

5,000

NIL

5,000

30,000

20,000

10,000

Payable as:

Rs

3

on application

Rs

5

on allotment

8

Called-up

Cash Book

Dr.

Cr.

Date

Particulars

L.F.

Bank

Rs

Date

Particulars

L.F.

Bank

Rs

Share Application

Share Application

(30,000 shares × Rs 3)

90,000

(5,000 shares × Rs 3)

15,000

Share Allotment

85,000

Balance c/d

1,60,000

1,75,000

1,75,000

Journal

Date

Particulars

L.F.

Debit

Amount

Rs

Credit Amount

Rs

Share Application A/c

Dr.

75,000

To Share Capital A/c

60,000

To Share Allotment A/c

15,000

(Share application of 20,000 shares at Rs 3 each transferred to Share Capital Account and excess money Rs 15,000 transferred to allotment)

Share Allotment A/c

Dr.

1,00,000

To Share Capital A/c

1,00,000

(Share allotment due on 20,000 shares at Rs 5 each)

ABC Company Ltd.

Balance Sheet

Particulars

Note No.

Amount

(Rs)

I. Equity and Liabilities

1. Shareholders’ Funds

a. Share Capital

1

1,60,000

2. Non-Current Liabilities

3. Current Liabilities

Total

1,60,000

II. Assets

1. Non-Current Assets

2. Current Assets

a. Cash and Cash Equivalents

2

1,60,000

Total

1,60,000

NOTES TO ACCOUNTS

Note No.

Particulars

Amount (Rs)

1

Share Capital

Authorised Share Capital

…… shares of Rs 10 each

–

Issued Share Capital

20,000 shares of Rs 10 each

2,00,000

Subscribed, Called-up and Paid-up Share Capital

20,000 shares of Rs 10 each, on which Rs 8 called-up and paid-up

1,60,000

2

Cash and Cash Equivalents

Cash at Bank

1,60,000

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ABC Company Ltd.
Balance Sheet
Particulars	Note No.	Amount (Rs)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	1,60,000
2. Non-Current Liabilities
3. Current Liabilities
Total		1,60,000

II. Assets
1. Non-Current Assets
2. Current Assets
a. Cash and Cash Equivalents	2	1,60,000
Total		1,60,000

Issued Capital	20,000 shares at Rs 10 each
Applied	30,000 shares
Over-subscribed	10,000 shares

Applied	Allotted	Over-subscribed
25,000	20,000	5,000
5,000	NIL	5,000
30,000	20,000	10,000

Cash Book
Dr.								Cr.
Date	Particulars	L.F.	Bank Rs	Date	Particulars	L.F.	Bank Rs

	Share Application				Share Application
	(30,000 shares × Rs 3)		90,000		(5,000 shares × Rs 3)		15,000
	Share Allotment		85,000
					Balance c/d		1,60,000
			1,75,000				1,75,000

Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs

	Share Application A/c	Dr.		75,000
	To Share Capital A/c				60,000
	To Share Allotment A/c				15,000
	(Share application of 20,000 shares at Rs 3 each transferred to Share Capital Account and excess money Rs 15,000 transferred to allotment)

	Share Allotment A/c	Dr.		1,00,000
	To Share Capital A/c				1,00,000
	(Share allotment due on 20,000 shares at Rs 5 each)


Note No.	Particulars	Amount (Rs)
1	Share Capital
	Authorised Share Capital
	…… shares of Rs 10 each	–
	Issued Share Capital
	20,000 shares of Rs 10 each	2,00,000
	Subscribed, Called-up and Paid-up Share Capital
	20,000 shares of Rs 10 each, on which Rs 8 called-up and paid-up	1,60,000

2	Cash and Cash Equivalents
	Cash at Bank	1,60,000