Question

X company issued ₹ 10,00,000 shares for subscription of ₹ 100 each at a premium of ₹ 20 per share payable as:
₹ 10 per share on application,
₹ 40 per share and ₹ 10 premium on allotment, and
₹ 50 per share and ₹ 10 premium on final payment.
Over-payments on application were to be applied towards amount due on allotment and over-payments on application exceeding amount due on allotment was to be returned. Issue was oversubscribed to the extent of 13,000 shares . Applicants for 12,000 shares were allotted only 1,000 shares and applicants for 2,000 shares were sent letters of regret. All the money due on allotment and final call was duly received .
Pass necessary entries in the company 's books to record the above transactions. Also, prepare company's Balance Sheet on completion of the above transactions.

Answer 1

Amount payable as:

Application	Rs	10
Allotment	Rs	50	(40 + 10)
First and Final Call	Rs	60	(50 + 10)
		120	(100 + 20)

Books of X Company Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Bank A/c	Dr.		2,30,000
	To Share Application A/c				2,30,000
	(Share application money received for 23,000 shares at Rs 10 each)
	Share Application A/c	Dr.		2,30,000
	To Share Capital A/c				1,00,000
	To Share Allotment A/c				50,000
	To Bank A/c				80,000
	(Share application of 10,000 shares transferred to Share Capital, Rs 50,000 adjusted on allotment and remaining amount returned)
	Share Allotment A/c	Dr.		5,00,000
	To Share Capital A/c				4,00,000
	To Securities Premium A/c				1,00,000
	(Share allotment due on 10,000 shares at Rs 50 each including Rs 10 premium)
	Bank A/c	Dr.		4,50,000
	To Share Allotment A/c				4,50,000
	(Share allotment money received)
	Share First and Final Call A/c	Dr.		6,00,000
	To Share Capital A/c				5,00,000
	To Securities Premium A/c				1,00,000
	(First and final call due on 10,000 shares at Rs 60 each including Rs 10 premium)
	Bank A/c	Dr.		6,00,000
	To Share First and Final Call A/c				6,00,000
	(Share first and final call money received)

Posting in the Company's Balance Sheet

X Ltd.
Balance Sheet
Particulars	Note No.	Amount (Rs)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	10,00,000
b. Reserves and Surplus	2	2,00,000
2. Non-Current Liabilities
3. Current Liabilities
Total		12,00,000
II. Assets
1.Non-Current Assets
2.Current Assets
a. Cash and Cash Equivalents	3	12,00,000
Total		12,00,000

NOTES TO ACCOUNTS

Note No.	Particulars	Amount (Rs)
1	Share Capital
	Authorised Share Capital
	…… shares of Rs 100 each	-
	Issued Share Capital
	10,000 shares of Rs 100 each	10,00,000
	Subscribed, Called up and Paid up Share Capital
	10,000 shares of Rs 100 each	10,00,000
2	Reserves and Surplus
	Securities Premium	2,00,000
3	Cash and Cash Equivalents
	Cash at Bank	12,00,000

Working Notes:

Applied Shares	Issued Shares	Money received on Application @ Rs 10 each	Money transferred to Share Capital @ Rs 10 each	Excess	Allotment due @ Rs 50 each	Excess money adjusted on Allotment	Excess money after Allotment
12,000	1,000	1,20,000	10,000	1,10,000	50,000	50,000	60,000 (return)
2,000	NIL	20,000	–	20,000 (return)
9,000	9,000	90,000	90,000	–	4,50,000	–	–
23,000	10,000	2,30,000	1,00,000		5,00,000	50,000	60,000

Share Allotment due (10,000 share × Rs 50)	5,00,000
Less: Excess application money adjusted on allotment	50,000
Money received on Allotment	4,50,000