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.

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Solution

Books of Usha Co. Ltd.

Journal Entry

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

Bank A/c

Dr.

3,00,000

To Equity Share Application A/c

3,00,000

(Share application received on 10,000 shares of Rs 30 each)

Equity Share Application A/c

Dr.

3,00,000

To Equity Share Capital A/c

3,00,000

(Share application transferred to Share Capital)

Equity Share Allotment A/c

Dr.

2,00,000

To Equity Share Capital A/c

2,00,000

(Share allotment due on 10,000 shares of Rs 20 each)

Bank A/c

Dr.

2,00,000

To Equity Share Allotment A/c

2,00,000

(Share allotment received)

Equity Share First Call A/c

Dr.

3,50,000

To Equity Share Capital A/c

3,50,000

(Share first call due on 10,000 shares of Rs 35 each)

Bank A/c

Dr.

3,50,000

To Equity Share First Call A/c

3,50,000

(Share first call received)

Equity Share Final Call A/c

Dr.

1,50,000

To Equity Share Capital A/c

1,50,000

(Share final call due on 10,000 shares of Rs 15 each)

Bank A/c

Dr.

1,50,000

To Equity Share Final Call A/c

1,50,000

(Share final call received)

Note: Company will call money on 10,000 shares only because public subscribed for 10,000 shares.

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

Books of Usha Co. Ltd.
Journal Entry
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs

	Bank A/c	Dr.		3,00,000
	To Equity Share Application A/c				3,00,000
	(Share application received on 10,000 shares of Rs 30 each)

	Equity Share Application A/c	Dr.		3,00,000
	To Equity Share Capital A/c				3,00,000
	(Share application transferred to Share Capital)

	Equity Share Allotment A/c	Dr.		2,00,000
	To Equity Share Capital A/c				2,00,000
	(Share allotment due on 10,000 shares of Rs 20 each)

	Bank A/c	Dr.		2,00,000
	To Equity Share Allotment A/c				2,00,000
	(Share allotment received)

	Equity Share First Call A/c	Dr.		3,50,000
	To Equity Share Capital A/c				3,50,000
	(Share first call due on 10,000 shares of Rs 35 each)

	Bank A/c	Dr.		3,50,000
	To Equity Share First Call A/c				3,50,000
	(Share first call received)

	Equity Share Final Call A/c	Dr.		1,50,000
	To Equity Share Capital A/c				1,50,000
	(Share final call due on 10,000 shares of Rs 15 each)

	Bank A/c	Dr.		1,50,000
	To Equity Share Final Call A/c				1,50,000
	(Share final call received)