12th | Ts grewal 2021-2022 | Question 11 to 15 | Ch: 1 Company Account: Accounting for share capital

Page No 9.112:

Question 11:

Seema Ltd. offered for subscription 10,000 shares of  ` 25 each, payable  ` 5 per share on application,  ` 10 per share on allotment (including  ` 5 per share as premium),  ` 5 per share as first call on the shares and the balance in two equal amounts at intervals of three months. All the shares were applied for and allotted. All the money was received except the second call and final call on 200 and 400 shares respectively. Pass the entries in the company's Journal, Cash Book  and the ledger. Also show the company's Balance Sheet on completion of the above transactions.

Answer:

Issued 10,000 shares of  ` 25 each at premium of  ` 5

Applied 10,000 shares

Payable as:

Application

 `

5

 

Allotment

 `

10

(5 + 5)

First Call

 `

5

 

Second Call

 `

5

 

Final Call

 `

5

 

 

 `

30

(25 + 5)

 

Books of Seema Limited
Cash Book

Dr.

Cr.

Date

Particulars

L.F.

Bank

 ( `)

Date

Particulars

L.F.

Bank

 ( `)

 

 

 

 

 

 

 

 

 

Share Application

 

50,000

 

 

 

 

 

Share Allotment

 

1,00,000

 

 

 

 

 

Share First Call

 

50,000

 

 

 

 

 

Share Second Call

 

49,000

 

 

 

 

 

Share Final Call

 

48,000

 

Balance c/d

 

2,97,000

 

 

 

2,97,000

 

 

 

2,97,000

 

 

 

 

 

 

 

 


 

Journal

Date

Particulars

L.F.

Debit

Amount

( `)

Credit

Amount

( `)

 

 

 

 

 

 

Share Application A/c

Dr.

 

50,000

 

 

To Share Capital A/c

 

 

50,000

 

(Application money of 10,000 shares of  ` 5 each transferred to Share Capital)

 

 

 

 

 

 

 

 

 

Share Allotment A/c

Dr.

 

1,00,000

 

 

To Share Capital A/c

 

 

50,000

 

To Securities Premium A/c

 

 

50,000

 

(Share allotment of 10,000 shares transferred to Share Capital at  ` 5 each

and Securities Premium at  ` 5 each)

 

 

 

 

 

 

 

 

 

Share First Call A/c

Dr.

 

50,000

 

 

To Share Capital A/c

 

 

50,000

 

(First call due on 10,000 shares

at  ` 5 each)

 

 

 

 

 

 

 

 

 

Share Second Call A/c

Dr.

 

50,000

 

 

To Share Capital A/c

 

 

50,000

 

(Second call due on 10,000 shares at 5 each)

 

 

 

 

 

 

 

 

 

Call-in-Arrears A/c

Dr.

 

1,000

 

 

To Share Second Call A/c

 

 

1,000

 

(Second call outstanding on 200 shares at  ` 5 each)

 

 

 

 

 

 

 

 

 

Share Final Call A/c

Dr.

 

50,000

 

 

To Shares Capital A/c

 

 

50,000

 

(Final call due on 50,000 shares of  ` to 5 per shares)

 

 

 

 

 

 

 

 

 

Calls-in-Arrears A/c

Dr.

 

2,000

 

 

To Shares Final Call A/c

 

 

2,000

 

(Final call outstanding on 400 shares at  ` 5 each)

 

 

 

 

 

 

 

 

 

Share Application Account

Dr.

 

Cr.

Date

Particulars

L.F.

Amount

 ( `)

Date

Particulars

L.F.

Amount

( `)

 

 

 

 

 

 

 

 

 

To Share Capital

 

50,000

 

By Bank

 

50,000

 

 

 

 

 

 

 

 

 

 

 

50,000

 

 

 

50,000

 

 

 

 

 

 

 

 

 

Share Allotment Account

Dr.

 

Cr.

Date

Particulars

L.F.

Amount

 ( `)

Date

Particulars

L.F.

Amount

( `)

 

 

 

 

 

 

 

 

 

To Share Capital

 

50,000

 

By Bank

 

1,00,000

 

Securities Premium

 

50,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,00,000

 

 

 

1,00,000

 

 

 

 

 

 

 

 

 

Share First Call Account

 

Dr.

 

Cr.

 

Date

Particulars

L.F.

Amount

( `)

Date

Particulars

L.F.

Amount

( `)

 

 

 

 

 

 

 

 

 

To Share Capital

 

50,000

 

By Bank

 

50,000

 

 

 

 

 

 

 

 

 

 

 

50,000

 

 

 

50,000

 

 

 

 

 

 

 

 

 

Share Second Call Account

Dr.

 

Cr.

Date

Particulars

L.F.

Amount

( `)

Date

Particulars

L.F.

Amount

( `)

 

 

 

 

 

 

 

 

 

To Share Capital

 

50,000

 

By Bank

 

49,000

 

 

 

 

 

Calls-in-Arrears

 

1,000

 

 

 

 

 

 

 

 

 

 

 

50,000

 

 

 

50,000

 

 

 

 

 

 

 

 

 

Share Final Call Account

 

Dr.

 

Cr.

 

Date

Particulars

L.F.

Amount

( `)

Date

Particulars

L.F.

Amount

( `)

 

 

 

 

 

 

 

 

 

 

 

To Share Capital

 

50,000

 

By Bank

 

48,000

 

 

 

 

 

 

Calls-in-Arrears

 

2,000

 

 

 

 

 

 

 

 

 

 

 

 

 

50,000

 

 

 

50,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Call-in-Arrears Account

Dr.

 

Cr.

Date

Particulars

L.F.

Amount

( `)

Date

Particulars

L.F.

Amount

( `)

 

 

 

 

 

 

 

 

 

To Share Second Call

 

1,000

 

By Balance c/d

 

3,000

 

To Share Final Call

 

2,000

 

 

 

 

 

 

 

 

 

 

 

 

3,000

 

 

 

3,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Share Capital Account

Dr.

 

Cr.

Date

Particulars

L.F.

Amount

( `)

Date

Particulars

L.F.

Amount

 ( `)

 

To Balance c/d

 

2,50,000

 

By Share Application

 

50,000

 

 

 

 

 

By Share Allotment

 

50,000

 

 

 

 

 

By Share First Call

 

50,000

 

 

 

 

 

By Share Second

 

50,000

 

 

 

 

 

By Share Final Call

 

50,000

 

 

 

 

 

2,50,000

 

 

 

2,50,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Securities Premium Account

Dr.

 

Cr.

Date

Particulars

L.F.

Amount

( `)

Date

Particulars

L.F.

Amount

 ( `)

 

 

 

 

 

 

 

 

 

To Balance c/d

 

50,000

 

By Share Allotment

 

50,000

 

 

 

 

 

 

 

 

 

 

 

50,000

 

 

 

50,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As per the Schedule III of Companies Act, 2013, the Company's Balance Sheet is presented as follows.

Balance Sheet

Particulars

Note No.

Amount 

( `)

I. Equity and Liabilities

 

 

1. Shareholders’ Funds

 

 

a. Share Capital

1

2,47,000

b. Reserves and Surplus

2

50,000

2. Non-Current Liabilities

 

 

3. Current Liabilities

 

 

Total

 

2,97,000

 

 

 

II. Assets

 

 

1. Non-Current Assets

 

 

2. Current Assets

 

 

a. Cash and Cash Equivalents

3

2,97,000

Total

 

2,97,000

 

 

 

 

NOTES TO ACCOUNTS

Note No.

Particulars

Amount 

( `)

1

Share Capital

 

 

Authorised Share Capital

 

 

……. shares of  ` 25 each

…

 

Issued Share Capital

 

 

 10,000 shares of  ` 25 each

2,50,000

 

Subscribed, Called-up and Paid-up Share Capital

 

 

10,000 shares of  ` 25 each

2,50,000

 

 

    Less: Calls-in-Arrears

(3,000)

2,47,000

 

 

 

2

Reserves and Surplus

 

 

Securities Premium

50,000

 

 

 

3

Cash and Cash Equivalents

 

 

Cash at Bank

2,97,000

 

 

 

 


Page No 9.112:

Question 12:


Bharat Ltd. was incorporated with a capital of  ` 2,00,000 divided into shares of  ` 10 each. 2,000 shares were offered for subscription and out of these, 1,800 shares were applied for and allotted.  ` 3 per share (including  ` 1 premium) was payable on application,  ` 4 per share (including  ` 1 premium) on allotment,  ` 2 per share on first call and  ` 3 per share on final call. All the money was received. Give necessary Journal entries and show share capital in the Balance Sheet.

Answer:

Authorised Capital 20,000 shares of  ` 10 each

Issued Capital 2,000 shares

Applied 1,800 shares

Payable as:

 

 

 

Application

 `

 

3

 

(2+1)

Allotment

 `

 

4

 

(3+1)

First Call

 `

 

2

 

Final Call

 `

 

3

 

 

 

12

(10+2)

 

Books of Bharat Limited

Journal 

Date

Particulars

L.F.

Debit

Amount

( `)

Credit

Amount

( `)

 

 

 

 

 

 

Bank A/c

Dr.

 

5,400

 

 

To Share Application A/c

 

 

5,400

 

(Application money received for 1,800 shares at  ` 3 per shares)

 

 

 

 

 

 

 

 

 

Share Application A/c

Dr.

 

5,400

 

 

To Share Capital A/c

 

 

3,600

 

To Securities Premium A/c

 

 

1,800

 

(Application money of 1,800 share transferred to Share Capital at  ` 2 per share and Securities Premium Re 1 per share)

 

 

 

 

 

 

 

 

 

Share Allotment A/c

Dr.

 

7,200

 

 

To Share Capital A/c

 

 

5,400

 

To Securities Premium A/c

 

 

1,800

 

(Share allotment due on 1,800 shares at  ` 4 per share including Re 1 securities premium)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

7,200

 

 

To Share Allotment A/c

 

 

7,200

 

(Share Allotment money received)

 

 

 

 

 

 

 

 

 

Share First Call A/c

Dr.

 

3,600

 

 

To Share Capital A/c

 

 

3,600

 

(Share first call due on 1,800 shares at  ` 2 per shares)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

3,600

 

 

To Share First Call A/c

 

 

3,600

 

(Share first call money received)

 

 

 

 

 

 

 

 

 

Share Final Call A/c

Dr.

 

5,400

 

 

To Share Capital A/c

 

 

5,400

 

(Share final call due on 1,800 shares at  ` 3 per share)

 

 

 

 

 

 

 

 

 

Bank A/c

 

5,400

 

 

To Share Final Call A/c

Dr.

 

 

5,400

 

(Share final call money received)

 

 

 

 

 

 

 

 



 

As per the Schedule III of Companies Act, 2013, the Company's Balance Sheet is presented as follows.

Bharat Limited

An extract of Balance Sheet

Particulars

Note No.

Amount

( `)

I. Equity and Liabilities

 

 

1. Shareholders’ Funds

 

 

a. Share Capital

1

18,000

 

 

 


NOTES TO ACCOUNTS

 

Note No.

Particulars

Amount

( `)

1

Share Capital

 

 

Authorised Share Capital

 

 

20,000 shares of  ` 10 each

2,00,000

 

Issued Share Capital

 

 

 2,000 shares of  ` 10 each

20,000

 

Subscribed, Called-up and Paid-up Share Capital

 

 

1,800 shares of  ` 10 each

18,000

 

 

 

 


Page No 9.113:

Question 13:


Authorized capital of Suhani Ltd . is  ` 45,00,000 divided into 30,000 shares of  ` 150 each . Out of these  company issued 15,000 shares of  ` 150 each at a premium of  ` 10 per share . the amount was payable as follows:
 ` 50 per share on application ,  ` 40 per share on allotment (including premium ),  ` 30 per share on firs t call and balance on final call . Public applied for 14,000 shares.  All the money was duly received .
Prepare an extract of Balance Sheet of Suhani Ltd . as per Schedule III , Part I of the companies Act, 2013 disclosing the above information . Also prepare 'Notes to Accounts ' for the same.

Answer:

Suhani Ltd.

Balance Sheet

Particulars

Note No.

Amount 

( `)

I. Equity and Liabilities

 

 

1. Shareholders’ Funds

 

 

a. Share Capital

1

21,00,000

b. Reserves and Surplus

2

1,40,000

2. Non-Current Liabilities

 

 

3. Current Liabilities

 

 

Total

 

22,40,000

 

 

 

II. Assets

 

 

1. Non-Current Assets

 

 

2. Current Assets

 

 

a. Cash and Cash Equivalents

3

22,40,000

Total

 

22,40,000

 

 

 

 

NOTES TO ACCOUNTS

 

Note No.

Particulars

Amount

( `)

1

Share Capital

 

 

Authorised Share Capital

 

 

30,000 shares of  ` 150 each

45,00,000

 

Issued Share Capital

 

 

 15,000 shares of  ` 150 each

22,50,000

 

Subscribed, Called-up and Paid-up Share Capital

 

 

 14,000 shares of  ` 150 each

21,00,000

 

 

 

2

Reserves and Surplus

 

 

Securities Premium

1,40,000

 

 

 

3

Cash and Cash Equivalents

 

 

Cash at Bank

22,40,000

 

 

 

 


Page No 9.113:

Question 14:


Faber Ltd. company invited applications for 75,000 equity shares of  ` 100 each. The application money received @  ` 30 per share was  ` 27,00,000. Name the kind of subscription. List the three alternatives for allotting these shares.

Answer:

Total Money Received on Application =  ` 27,00,000
Application money per share =  ` 30
Number of shares applied by the public=Total Appliaction money ReceivedApplication money per share=27,00,00030=90,000 shares

Share Applications invited by the company = 75,000
Since, Number of Shares applied for by the company exceeds the number of shares offered by the company by 15,000 shares (i.e. 90,000 – 75,000). Therefore, it is a case of oversubscription of shares.
The alternatives available with the company are as follows:
1. By rejecting the excess applications and allotting only 75,000 shares.
2. By making allotment to the 90,000 shares applicants on a proportionate or pro-rata basis.
3. By making allotment to some on pro-rata basis and rejecting some applicants. For e.g.: 85,000 share applicants are given 75,000 shares on pro-rata basis and the remaining 5,000 shares have been rejected.

 


Page No 9.113:

Question 15:


Sangam Ltd. invited applications for 20,000 Equity Shares of  ` 100 each issued at par. The amount was payable on application. The issue was oversubscribed by 5,000 shares and allotment was made on pro rata basis. Pass necessary Journal entries.

Answer:

In the books of Sangam Ltd.

Journal

Date

Particulars

 

L.F.

Debit Amount ( `)

Credit Amount ( `)

 

Bank A/c (25,000 × 100)

Dr.

 

25,00,000

 

 

  To Share Application and Allotment A/c (25,000 × 100)

 

 

 

25,00,000

 

(Being application money received on 25,000 equity shares)

 

 

 

 

 

 

 

 

 

 

 

Share Application and Allotment A/c

Dr.

 

25,00,000

 

 

  To Share Capital A/c (20,000 × 100)

 

 

 

20,00,000

 

  To Bank A/c (5,000 × 100)

 

 

 

5,00,000

 

(Being share application and allotment money adjusted for 10,000

 

 

 

 

 

shares and balance money refunded)

 

 

 

 

 

Note: Since the entire amount is receivable on application so the excess money on 2,000 shares has been refunded and allotment is made on a pro-rata basis to 12,000 shareholders.