Volume-2 | Chapter-1 | Question 11 to 15 | Issue of Share Capital | Ts grewal solution 2020-21 | Class-12th

Page No 8.112:

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 8.113:

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 8.113:

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 8.113:

Question 14:

Super star 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 8.113:

Question 15:

Sangam Ltd. invited applications for 10,000 Equity Shares of  ` 100 each issued at par. The amount was payable on application. The issue was oversubscribed by 2,000 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 (12,000 × 100)	Dr.		12,00,000
	To Share Application and Allotment A/c (12,000 × 100)				12,00,000
	(Being application money received on 12,000 equity shares)
	Share Application and Allotment A/c	Dr.		12,00,000
	To Share Capital A/c (10,000 × 100)				10,00,000
	To Bank A/c (2,000 × 100)				2,00,000
	(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.

 

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