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Calls in Arrears

When defaulte...

Question

When defaulter shareholders pay their default amount of allotment money, then the journal entry is-

A

Calls in Arrears A/c Dr.

To Bank A/c

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B

Bank A/c Dr.

To Calls in Arrears A/c

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C

Bank A/c Dr.

To Share Allotment A/c

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D

Share Allotment A/c Dr.

To Bank A/c

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Solution

The correct option is B
Bank A/c Dr.

To Calls in Arrears A/c

When defaulter shareholders pay their default amount of allotment money, then the journal entry is-

Bank A/c Dr.

To Calls in Arrears A/c

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Q. When defaulter shareholders pay their default amount of allotment money, we debit account and credit account.

Q. Zoya Ltd. issued 10,000 shares of ₹10 each payable as ₹3 on application, ₹2 on allotment, ₹3 on first call, and ₹2 on the second and final call. K, a shareholder of 100 shares paid only application and allotment money. Y, a shareholder of 250 shares did not pay second and final call money. Calculate the total amount of calls-in-arrear:

Q. Priya Ltd. issued 20,000 shares of ₹10 each payable as ₹3 on application, ₹2 on allotment, ₹3 on first call, and ₹2 on the second and final call. L, a shareholder of 300 shares paid only application and allotment money. M, a shareholder of 550 shares did not pay second and final call money. Calculate the total amount of calls-in-arrear.

[0.88 marks]

A Ltd. invited applications for issuing 1,00,000 shares of ₹ 10 each at a premium of ₹ 1 per share. The amount was payable as follows:

On Application	–	3 per share;
On Allotment	–	3 per share (including premium);
On First Call	–	3 per share;
On Second and Final Call	–	Balance amount.

Applications for 1,60,000 shares were received. Allotment was made on the following basis:

(i)	To applicants for 90,000 shares	–	40,000 shares;
(ii)	To applicants for 50,000 shares	–	40,000 shares;
(iii)	To applicants for 20,000 shares	–	Full shares.

Excess money paid on application is to be adjusted against the amount due on allotment and calls.

Rishabh, a shareholder, who applied for 1,500 shares and belonged to category (ii), did not pay allotment, first and second and final call money.

Another shareholder, Sudha, who applied for 1,800 shares and belonged to category (i), did not pay the first and second and final call money.

All the shares of Rishabh and Sudha were forfeited and were subsequently reissued at ₹ 7 per share fully paid.

Pass the necessary Journal entries in the books of A Ltd. Open Calls-in-Arrears Account and Calls-in-Advance Account wherever required.

Q. In case of default in the payment of allotment money by the shareholder, the share allotment account is credited with amount.

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