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Question

Green Ltd. issued 8,000 Equity Shares of ₹ 10 each. ₹ 5 per share was called, payable ₹ 2 on application, ₹ 1 on allotment , ₹ 1 on first call and ₹ 1 on second call. All the money was duly received with the following exceptions:
A who holds 250 shares paid nothing after application.
B who holds 500 shares paid nothing after allotment.
C who holds 1,250 shares paid nothing after first call.
Prepare Journal and the Balance Sheet.

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Solution

Issued Capital 5,000 Shares of ₹10 each ₹ 5 called up

Books of Green Ltd.

Journal

Date

Particulars

L.F.

Debit Amount

(₹)

Credit Amount

(₹)

Bank A/c

Dr.

16,000

To Share Application A/c

16,000

(Share application money received for 8,000 shares at Rs2 each)

Share Application A/c

Dr.

16,000

To Share Capital A/c

16,000

(Application money transferred to Share Capital)

Share Allotment A/c

Dr.

8,000

To Share Capital A/c

8,000

(Allotment due on 8,000 shares at Re 1 each)

Bank A/c

Dr.

7,750

Call-in-Arrears A/c

Dr.

250

To Share Allotment A/c

8,000

(Allotment money received on 7,750 shares and 250 shares failed to pay it)

Share First Call A/c

Dr.

8,000

To Share Capital A/c

8,000

(First call due on 8,000 shares at Re 1 each)

Bank A/c

Dr.

7,250

Calls in Arrears A/c

Dr.

750

To Share First Call A/c

8,000

(Share first call money received on 7,250 shares and 750 shares failed to pay it)

Share Second Call A/c

Dr.

8,000

To Share Capital A/c

8,000

(Share second call due on 8,000 shares at Rs l each)

Bank A/c

Dr.

6,000

Call-in-Arrears A/c

Dr.

2,000

To Share Second Call A/c

8,000

(Share second call money received on 6,000 shares and 2000 shares failed to pay it)

As per the Schedule III of Companies Act, 2013, the Company's Balance Sheet is presented as follows.

Green Ltd.

Balance Sheet

Particulars

Note No.

Amount

(₹)

I. Equity and Liabilities

1. Shareholders’ Funds

a. Share Capital

1

37,000

2. Non-Current Liabilities

3. Current Liabilities

Total

37,000

II. Assets

1. Non-Current Assets

2. Current Assets

a. Cash and Cash Equivalents

2

37,000

Total

37,000

NOTES TO ACCOUNTS

Note No.

Particulars

Amount

(₹)

1

Share Capital

Authorised Share Capital

……. shares of Rs 10 each

-

Issued Share Capital

8,000 shares of Rs 10 each

80,000

Subscribed, Called-up and Paid-up Share Capital

8,000 shares of Rs 10 each, Rs 5 Called-up and Paid-up

40,000

Less: Calls-in-Arrears

(3,000)

37,000

2

Cash and Cash Equivalents

Cash at Bank

37,000


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