Question

Sumit Machine Ltd. issued 50,000 shares of Rs. 100 each at premium of 5%. The shares were payable Rs. 25 on application, Rs. 50 on allotment and Rs. 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

Books of Sumit Machine Ltd.
Date	Particulars			L.F.	Debit Amount (₹)	Credit Amount (₹)
	Bank A/c		Dr.		12,50,000
		To Share Application A/c				12,50,000
	(Share Application money received on application for 50,000 shares @ ₹25 per share)
	Share Application A/c		Dr.		12,50,000
		To Share Capital A/c				12,50,000
	(Share Application money of 50,000 shares transferred to Share Capital Account)
	Share Allotment A/c		Dr.		25,00,000
		To Share Capital A/c				22,50,000
		To Securities Premium A/c				2,50,000
	(Share Allotment money due on 50,000 shares @ ₹45 each at a premium of ₹5)
	Bank A/c		Dr.		25,00,000
		To Share Allotment A/c				25,00,000
	(Allotment money received for 50,000 shares @ ₹50 per share)
	Share First and Final Call A/c		Dr.		15,00,000
		To Share Capital A/c				15,00,000
	(Share First and Final call due on 50,000 shares @ ₹30 per share)
	Bank A/c		Dr.		14,88,000
	Calls in Arrears A/c		Dr.		12,000
		To Share First and Final Call A/c				15,00,000
	(Share First and Final Call received except 400 shares)

Sumit Machine Ltd. Balance Sheet Particulars Note No. Amount (₹) I. Equity and Liabilities 1. Shareholders’ Funds a. Share Capital 1 49,88,000 b. Reserves and Surplus 2 2,50,000 2. Non-Current Liabilities 3. Current Liabilities Total 52,38,000 II. Assets Non-Current Assets Current Assets a. Cash and Cash Equivalents 3 52,38,000 Total 52,38,000 ​ NOTES TO ACCOUNTS Note No. Particulars Amount (₹) 1 Share Capital Authorised Share Capital …….. shares of ₹ 100 each - Issued Share Capital 50,000 shares of ₹ 100 each 50,00,000 Subscribed, Called-up and Paid-up Share Capital 50,000 shares of ₹ 100 each 50,00,000 Less: Calls-in-Arrears (12,000) 49,88,000 2 Reserves and Surplus Securities Premium Reserve 2,50,000 3 Cash and Cash Equivalents Cash at Bank 52,38,000