Question

Sumit Machine Ltd. issued 50,000 shares of ₹. 100 each at premium of 5%. The shares were payable ₹. 25 on application, ₹. 50 on allotment and ₹. 30 on first and final call. The issue was fully subscribed and money was duly received except the final call on 400 shares. The premium was adjusted on allotment.

Give journal entries and prepare balance sheet.

Answer 1

$\text{Journal Entries}\begin{array}{cccccc}\text{Date}& \text{Particulars}& & \text{L.F.}& \text{Dr (Rs)}& \text{Cr(Rs)}\\ \text{(i)}& \text{Bank A/c}(50,000\times 25)& \text{Dr}& & 12,50,000& \\ & \text{To Share Application A/c}& & & & 12,50,000\\ & \text{(Share application money received on}& & & & \\ & \text{application for 50,000 shares @ Rs 25 per share}& & & & \\ & \underset{–}{}& & & & \\ \text{(ii)}& \text{Share Application A/c}& \text{Dr.}& & 12,50,000& \\ & \text{To Share Capital A/c}(50,000\times 25)& & & & 12,50,000\\ & \text{(Share application money of 50,000 shares}& & & & \\ & \text{transferred to share capital account}& & & & \\ & \underset{–}{}& & & & \\ \text{(iii)}& \text{Bank A/c}(50,000\times 50)& \text{Dr}& & 25,00,000& \\ & \text{To Share Allotment A/c}& & & & 25,00,000\\ & \text{(Allotment money received for 50,000 shares}& & & & \\ & at\text{Rs 50 per share)}& & & & \\ & \underset{–}{}& & & & \\ \text{(iv)}& \text{Share Allotment A/c}(50,000\times 50)& \text{Dr.}& & 25,00,000& \\ & \text{To Share Capital A/c}(50,000,\times 45)& & & & 22,50,000\\ & \text{To Securities Premium A/c}(50,000,\times 5)& & & & 2,50,000\\ & \text{(Share Allotment money due on 50,000 shares at ₹45 each at a premium of ₹5)}& & & & \\ & \underset{–}{}& & & & \\ \text{(v)}& \text{Bank A/c}(50,000\times 30)& \text{Dr}& & 14,88,000& \\ & \text{Calls-in-Arrear A/c}& \text{Dr}& & 12,000& \\ & \text{To Share First and Final A/c}& & & & 15,00,000\\ & \text{(Share first and final call received except 400}& & & & \\ & \text{shares}& & & & \\ & \underset{–}{}& & & & \\ \text{(vi)}& \text{Share First and Final Call A/c}& \text{Dr}& & 15,00,000& \\ & \text{To Share Capital A/c}& & & & 15,00,000\\ & \text{(Share first and final call due on 50,000 shares}& & & & \\ & at\text{Rs 30 per share)}& & & & \\ & \underset{–}{}& & & & \end{array}$