Question

X Ltd., invited applicaions for issuing 50,000 equity shares fo Rs 10 each. The amount was payable as follows : On Application : Rs 2 per share, On Allotment : Rs 3 per share, On First Call Rs 3 per share, On Second and Final Call : Balance amount. Applications for 70,000 shares were received. Applications for 10,000 shares were rejected and the application money was refunded. Shares were allotted to the remaining applicants on pro-rata basis and excess money received with applications was transferred towards sums due on allotment and calls, if any. Gopal,who applied for 600 shares, paid his entire share money with application. Ghosh, who had applied for 6,000 shares, failed to pay the allotment money and his shares were immediately forfeited. These forfeited shares were re-issued to Sultan for Rs 20,000; Rs 4 per share paid up. The first call money and the second and final call money was called and duly received. Pass necessary Journal entries for the above transactions in the books of X Ltd. Open Calls-in -Advance Account and Calls-in-Arrears Account wherever necessary.

OR

A Ltd. Invited applications for issuing 1,00,000 shares of Rs 10 each at a premium of Rs 1 per share. The amount was payable as follows : On Application : Rs 3 per share; On Allotment : Rs 3 per share (including premium); On First Call : Rs 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 shareolder, 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 re-issued at Rs 7 per share fully paid. Pass the necessary Journal entries in the books of A Ltd. Open Call-in Arrears account and Call-in -Advance Account wherever required.

Answer 1

$\text{JOURNAL}$
$\begin{array}{cccccc}\text{Date}& \text{Particulars}& & L.F.& \text{Debit}& \text{Credit}\\ & & & & \text{(Rs)}& \text{(Rs)}\\ & \text{Bank A/c}& Dr.& & 1,44,800& \\ & \text{To Equity Share Application A/c}& & & & 1,44,800\\ & \text{(Being application money received on 70,000 shares and}& & & & \\ & \underset{–}{\text{one shareholder paid whole amount)}}& & & & \\ & \text{Equity Share Application A/c}& Dr.& & 1,44,800& \\ & \text{To Equity Share Capital A/c}& & & & 1,00,000\\ & \text{To Equity Share Allotment A/c}& & & & 20,800\\ & \text{To Bank A/c}& & & & 21,000\\ & \text{To Calls in Advance A/c}& & & & 3,000\\ & \underset{–}{\text{(Being application money adjusted)}}& & & & \\ & \text{Equity Share Allotment A/c}& Dr.& & 1,00,000& \\ & \text{To Equity Share Capital}& & & & 1,00,000\\ & \underset{–}{\text{(Being allotment money due)}}& & & & \\ & \text{Bank A/c}& Dr.& & 71,200& \\ & \text{Calls in Arrears A/c}& Dr.& & 8,000& \\ & \text{To Equity Share Allotment A/c}& & & & 79,200\\ & \underset{–}{\text{(Being allotment money received)}}& & & & \\ & \text{Equity Share Capital A/c}& Dr.& & 20,000& \\ & \text{To Share Forfeiture A/c}& & & & 12,000\\ & \text{To Calls in Arrears A/c}& & & & 8,000\\ & \text{(Being 5,000 shares forfeited for non-payment of allot-}& & & & \\ & \underset{–}{\text{ment money)}}& & & & \\ & \text{Bank A/c}& Dr.& & 20,000& \\ & \text{To Equity Share Capital A/c}& & & & 20,000\\ & \underset{–}{\text{(Being forfeited shares were re-issued at Rs 4 per share)}}& & & & \\ & \text{Share Forfeiture A/c}& Dr.& & 12,000& \\ & \text{To Capital Reserve A/c}& & & & 12,000\\ & \underset{–}{\text{(Being forfeiture amount transfer to Capital Reserve)}}& & & & \\ & \text{Equity Share First Call A/c}& Dr& & 1,50,000& \\ & \text{To Equity Share Capital A/c}& & & & 1,50,000\\ & \underset{–}{\text{(Being call money due)}}& & & & \\ & \text{Bank A/c}& Dr.& & 1,48,500& \\ & \text{Calls in Advance A/c}& Dr.& & 1,500& \\ & \text{To Equity Share First Call A/c}& & & & 1,50,000\\ & \underset{–}{\text{(Being first call money received)}}& & & & \\ & \text{Equity Share Second Call A/c}& Dr.& & 1,50,000& \\ & \text{To Equity Share Capital A/c}& & & & 1,50,000\\ & \underset{–}{\text{(Being second call money due)}}& & & & \\ & \text{Bank A/c}& Dr.& & 1,48,500& \\ & \text{Calls in Advance A/c}& Dr.& & 1,500& \\ & \text{To Equity Share Second Call A/c}& & & & 1,50,000\\ & \text{(Being second call money received)}& & & & \end{array}$

OR

$\text{JOURNAL}$
$\begin{array}{cccccc}\text{Date}& \text{Particulars}& & L.F.& \text{Debit}& \text{Credit}\\ & & & & \text{(Rs)}& \text{(Rs)}\\ & \text{Bank A/c}& Dr.& & 4,80,000& \\ & \text{To Equity Share Capital A/c}& & & & 4,80,000\\ & \underset{–}{\text{(Being application money received on 1,60,000 shares)}}& & & & \\ & \text{Equity Share Application A/c}& Dr.& & 4,80,000& \\ & \text{To Equity Share Capital A/c}& & & & 3,00,000\\ & \text{To Equity Share Allotment A/c}& & & & 1,50,000\\ & \text{To Calls in Advance A/c}& & & & 30,000\\ & \underset{–}{\text{(Being application money adjusted)}}& & & & \\ & \text{Equity Share Allotment A/c}& Dr.& & 3,00,000& \\ & \text{To Equity Share Capital A/c}& & & & 2,00,000\\ & \text{To Securities Premium Reserve A/c}& & & & 1,00,000\\ & \underset{–}{\text{(Being allotment money due)}}& & & & \\ & \text{Bank A/c}& Dr.& & 1,47,300& \\ & \text{Calls in Arrears A/c}& Dr.& & 2,700& \\ & \text{To Equity Share Allotment A/c}& & & & 1,50,000\\ & \underset{–}{\text{(Being allotment money received except on 1,200 shares)}}& & & & \\ & \text{Equity Share First Call A/c}& Dr.& & 3,00,000& \\ & \text{To Equity Share Capital A/c}& & & & 3,00,000\\ & \underset{–}{\text{(Being Call money due)}}& & & & \\ & \text{Bank A/c}& Dr.& & 2,64,600& \\ & \text{Call in Arrears A/c}& Dr.& & 5,400& \\ & \text{Calls in Advance A/c}& Dr.& & 30,000& \\ & \text{To Equity Share First Call A/c}& & & & 3,00,000\\ & \underset{–}{\text{(Being call money received except on 2,000 shares)}}& & & & \\ & \text{Equity Shares Second and Final Call A/c}& Dr.& & 2,00,000& \\ & \text{To Equity Share Capital A/c}& & & & 2,00,000\\ & \underset{–}{\text{(Being second call money due on 1,00,000 shares)}}& & & & \\ & \text{Bank A/c}& Dr.& & 1,96,000& \\ & \text{Calls in Arrears A/c}& Dr.& & 4,000& \\ & \text{To Equity Share Second Call A/c}& & & & 2,00,000\\ & \text{(Being second call moeny received except on 2,000}& & & & \\ & \underset{–}{\text{shares)}}& & & & \\ & \text{Equity Share Capital A/c}& Dr.& & 20,000& \\ & \text{Securities Premium Reserve A/c}& Dr.& & 1,200& \\ & \text{To Share Forfeiture A/c}& & & & 9,100\\ & \text{To Call in Arrears A/c}& & & & 12,100\\ & \text{(Being 2,000 shares forfeited for non-payment of allotment money and call money)}& & & & \\ & \underset{–}{}& & & & \\ & \text{Bank A/c}& Dr.& & 14,000& \\ & \text{Share Forfeiture A/c}& Dr.& & 6,000& \\ & \text{To Equity Share Capital A/c}& & & & 20,000\\ & \underset{–}{\text{(Being forfeited shares were re-issued at Rs 7 per share)}}& & & & \\ & \text{Share Forfeiture A/c}& & 3,100& & \\ & \text{To Capital Reserve A/c}& & & & 3,100\\ & \text{(Being profit on re-issue transfer to Capital Reserve)}& & & & \end{array}$