Page No 8.113:
Question 16:
Citizen
Watches Ltd. invited applications for 50,000 shares of ` 10 each payable ` 3 on application , ` 4 on allotment and balance on first and
final call . Applications were received for 60,000 shares .
Applications were accepted for 50,000 shares and remaining applications were rejected . All calls were made and received except First and
Final call on 500 shares .
Pass the journal entries in the books of Citizen Watches Ltd
.
Answer:
Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount ( `) |
Credit Amount ( `) |
|
|
Bank A/c (60,000×3) |
Dr. |
|
1,80,000 |
|
|
To Share Application A/c |
|
|
|
1,80,000 |
|
(Received application money on
60,000 shares) |
|
|
|
|
|
|
|
|
|
|
|
Share Application A/c |
Dr. |
|
1,80,000 |
|
|
To Share Capital A/c
(50,000×3) |
|
|
|
1,50,000 |
|
To Bank A/c (10,000×3) |
|
|
|
30,000 |
|
(Transfer of application money to
Share Capital) |
|
|
|
|
|
|
|
|
|
|
|
Share Allotment A/c (50,000×4) |
Dr. |
|
2,00,000 |
|
|
To Share Capital A/c |
|
|
|
2,00,000 |
|
(Allotment due on 50,000 shares ) |
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
2,00,000 |
|
|
To Share Allotment A/c |
|
|
|
2,00,000 |
|
(Allotment received) |
|
|
|
|
|
|
|
|
|
|
|
Share First and Final Call A/c
(50,000×3) |
Dr. |
|
1,50,000 |
|
|
To Share Capital A/c |
|
|
|
1,50,000 |
|
(Call money due on 50,000 shares) |
|
|
|
|
|
|
|
|
|
|
|
Bank A/c (49,500×3) |
Dr. |
|
1,48,500 |
|
|
To Share First and Final
Call A/c |
|
|
|
1,48,500 |
|
(Received call money on 49,500
shares) |
|
|
|
|
|
|
|
|
|
Page No 8.113:
Question 17:
Eastern
Company Limited , having an authorised capital of `
10,00,000 divided into shares of ` 10 each ,
issued 50,000 shares at a premium of ` 3 per
share payable as follows:
On Application |
` 3 per share; |
On Allotment (including premium) |
` 5 per
share; |
On first call (due three months after allotment )and the balance as when required. |
` 3 per
share; |
Applications were received for 60,000 shares and the directors allotted the
shares as follows:
(i) Applicants for 40,000 shares received in full.
(ii) Applicants for 15,000 shares received an allotment of 8,000 shares.
(iii) Applicants for 5,000 shares received 2,000 shares on allotment
, excess money being returned.
All amounts due on allotment were received.
The first call was made and the money was received except on 100 shares.
Give journal and cash book entries to record these transactions of the company . Also prepare the Balance Sheet of the company.
Answer:
Books of Eastern Company Limited |
|||||
Date |
Particulars |
L.F. |
Debit Amount ( `) |
Credit Amount ( `) |
|
|
Share Application A/c |
Dr. |
|
1,80,000 |
|
|
To Share Capital A/c |
|
|
1,50,000 |
|
|
To Share Allotment A/c |
|
|
30,000 |
|
|
(Share Application money for 50,000 shares transferred To
Share Capital Account and the excess money transferred To Share Allotment
Account) |
|
|
|
|
|
|
|
|
|
|
|
Share Allotment A/c |
Dr. |
|
2,50,000 |
|
|
To Share Capital A/c |
|
|
1,00,000 |
|
|
To Share Premium A/c |
|
|
1,50,000 |
|
|
(Allotment money due on 50,000 shares @ ` 5 per
share including ` 3 security premium) |
|
|
|
|
|
|
|
|
|
|
|
Share First Call A/c |
Dr. |
|
1,50,000 |
|
|
To Share Capital A/c |
|
|
|
1,50,000 |
|
(First call due on 50,000 shares @ ` 3 per
share) |
|
|
|
|
Cash Book (Bank Column) |
|||||||
Dr. |
|
|
|
|
|
|
Cr. |
Date |
Particulars |
J.F. |
Amount ( `) |
Date |
Particulars |
J.F. |
Amount ( `) |
|
Share Application |
|
1,80,000 |
|
|
|
|
|
Share Allotment |
|
2,20,000 |
|
Balance c/d |
|
5,49,700 |
|
Share First Call |
|
1,49,700 |
|
|
|
|
|
|
|
5,49,700 |
|
|
|
5,49,700 |
|
|
|
|
|
|
|
|
Eastern Company Limited |
||
Balance Sheet |
||
Particulars |
Note No. |
Amount ( `) |
I. Equity and Liabilities |
|
|
1. Shareholders’ Funds |
|
|
a. Share Capital |
1 |
3,99,700 |
b. Reserves and Surplus |
2 |
1,50,000 |
2. Non–Current Liabilities |
|
|
3. Current Liabilities |
|
|
Total |
|
5,49,700 |
II. Assets |
|
|
1. Non–Current Assets |
|
|
2. Current Assets |
|
|
a. Cash and Cash Equivalents |
3 |
5,49,700 |
Total |
|
5,49,700 |
|
|
|
NOTES TO ACCOUNTS
Note No. |
Particulars |
Amount
( `) |
|
1 |
Share Capital |
|
|
|
Authorised Share
Capital |
|
|
|
1,00,000 shares of ` 10 each |
10,00,000 |
|
|
Issued Share Capital |
|
|
|
50,000 shares of ` 10 each |
5,00,000 |
|
|
Subscribed, Called up and Paid up Share Capital |
|
|
|
50,000 shares of ` 10 each, ` 8
called–up |
4,00,000 |
|
|
Less: Calls–in–Arrears |
(300) |
3,99,700 |
2 |
Reserves and Surplus |
|
|
|
Securities Premium |
1,50,000 |
|
|
|
|
|
3 |
Cash and Cash Equivalents |
|
|
|
Cash at Bank |
5,49,700 |
Page No 8.113:
Question 18:
Varun
Ltd. issued `
10,00,000 shares of ` 100
each at a premium of ` 20 for subscription
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:
Amount
payable as:
Application |
` |
10 |
|
Allotment |
` |
50 |
(40 + 10) |
First and Final Call |
` |
60 |
(50 + 10) |
|
|
120 |
(100 + 20) |
Books of Varun Limited Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount ( `) |
Credit Amount ( `) |
|
|
|
|
|
|
|
|
Bank
A/c |
Dr. |
|
2,30,000 |
|
|
To Share Application
A/c |
|
|
2,30,000 |
|
|
(Share
application money received for 23,000 shares at ` 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, `
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 ` 50 each including ` 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 ` 60 each including ` 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
Varun Limited |
||
Balance Sheet |
||
Particulars |
Note No. |
Amount (
`) |
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 (
`) |
1 |
Share Capital |
|
|
Authorised Share Capital |
|
|
…… shares of ` 100
each |
- |
|
Issued Share Capital |
|
|
10,000 shares of ` 100
each |
10,00,000 |
|
Subscribed, Called up
and Paid up Share Capital |
|
|
10,000 shares of ` 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 @ ` 10 each |
Money
transferred to Share Capital @ ` 10 each |
Excess |
Allotment
due @
` 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 ×
` 50) |
5,00,000 |
Less: Excess application money adjusted on allotment |
50,000 |
Money received on Allotment |
4,50,000 |
Page No 8.114:
Question 19:
Sugandh
Ltd. issued 60,000 shares of ` 10 each at a premium of ` 2 per share payable as ` 3 on application, `
5(including premium) on allotment and the balance on first and final call.
Applications were received for 92,000 shares. The Directors resolved to allot
as:
(i) |
Applicants of 40,000 shares |
30,000 shares, |
(ii) |
Applicants of 50,000 shares |
30,000 shares, |
(iii) |
Applicants of 2,000 shares |
Nil. |
Mohan, who had applied for 800 shares in Category
(i) and Sohan, who was
allotted 600 shares in Category
(ii) failed to pay the allotment money. Calculate amount received on allotment.
Answer:
Issued
Shares |
60,000 |
Less: Applied Shares |
92,000 |
Over-subscribed
Shares |
32,000 |
Payable
as:
` |
3 |
on
Application |
|
||||
` |
5 |
on
Allotment (Including ` 2
premium) |
|
||||
` |
4 |
on
First and Final Call |
|
||||
` |
12 |
(10
+ 2) |
|
||||
|
|
|
|
|
|
|
|
Applied |
Allotted |
Money Received on Application @ ` 3 |
Money adjusted on Appliction @ ` 3 |
Excess |
Allotment due @ ` 5 |
Excess money adjusted on Allotment @ ` 5 |
|
40,000 |
30,000 |
1,20,000 |
90,000 |
30,000 |
1,50,000 |
30,000 |
|
50,000 |
30,000 |
1,50,000 |
90,000 |
60,000 |
1,50,000 |
60,000 |
|
2,000 |
NIL |
6,000 |
– |
6,000 |
|
|
|
|
|
|
|
(Bank) |
|
|
|
92,000 |
60,000 |
2,76,000 |
1,80,000 |
|
3,00,000 |
90,000 |
|
|
Mohan
Number of shares allotted to Mohan=30,000/40,000×800= 600
shares
Money
Received on Application 800×3 |
= |
2,400 |
Application
money adjusted to Share Capital 600×3 |
= |
1,800 |
Execs
Money on Application |
= |
600 |
|
|
|
Allotment
due on 600 shares × ` 5 |
= |
3,000 |
Less: Adjustment of excess money on application |
= |
600 |
Calls-in-Arrears
by Mohan |
|
2,400 |
Sohan
Number of shares allotted to Sohan=50,000/30,000×600= 1000
shares
Money
received on Application 1,000×3 |
= |
3,000 |
Application
money adjusted to Share Capital 600×3 |
= |
1,800 |
Excess
money on application |
= |
1,200 |
|
|
|
Allotment
due on 600 Shares × ` 5 |
= |
3,000 |
Less: Adjustment of excess money on application |
= |
1,200 |
Calls-in-Arrears
by Sohan |
= |
1,800 |
|
|
|
Allotment
due on 60,000 shares × ` 5 |
= |
3,00,000 |
Less: Excess Application money adjusted on Allotment |
= |
90,000 |
|
|
2,10,000 |
Less: Calls-in-Arrears by Mohan |
= |
2,400 |
Less: Calls-in-Arrears by Sohan |
= |
1,800 |
Money received on allotment |
= |
2,05,800 |
Page No 8.114:
Question 20:
Sony
Media Ltd. issued 50,000 shares of ` 10 each payable ` 3 on application , ` 4 on allotment and balance on first and final call .
Applications were received for 1,00,000 shares and allotment was made as
follows :
(i) Applicants for 60,000 shares were allotted 30,000
shares,
(ii) Applicants for 40,000 shares were allotted 20,000 shares,
Anupam to whom 1,000 shares were allotted from
category
(i) failed to pay the allotment money.
Pass journal entries up to allotment .
Answer:
Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount
( `) |
Credit Amount
( `) |
|
|
Bank A/c (1,00,000 × 3) |
Dr. |
|
3,00,000 |
|
|
To Share Application A/c |
|
|
|
3,00,000 |
|
(Received application money on 1,00,000 shares) |
|
|
|
|
|
|
|
|
|
|
|
Share Application A/c |
Dr. |
|
3,00,000 |
|
|
To Share Capital A/c (50,000 × 3) |
|
|
|
1,50,000 |
|
To Share Allotment A/c |
|
|
|
1,50,000 |
|
(Transfer of application money to Share Capital) |
|
|
|
|
|
|
|
|
|
|
|
Share Allotment A/c (50,000 × 4) |
Dr. |
|
2,00,000 |
|
|
To Share Capital A/c |
|
|
|
2,00,000 |
|
Allotment due on 50,000 shares) |
|
|
|
|
|
|
|
|
|
|
|
Bank A/c (W.N. 1) |
Dr. |
|
49,000 |
|
|
To Share Allotment A/c |
|
|
|
49,000 |
|
(Allotment money received after adjustment of excess on
application and arrears) |
|
|
|
|
|
|
|
|
|
Working Notes:
1) Computation of amount received on allotment:
Allotment due (50,000 × 4) |
= |
`. 2,00,000 |
Less: Amount received on application in
excess (on 50,000 shares @ ` . 3 each) |
= |
`. 1,50,000 |
|
|
`. 50,000 |
Less: Amount due but not received on
shares of Anupam |
|
1,000 |
|
|
`. 49,000 |
2) Calculation
of Amount not Received on the shares of Anupam
Shares allotted to Anupam=1,000
Shares applied by Anupam=1,000×60,000/30,000=2,000
Amount due on allotment of Anupam's
Share (4 × 1,000) |
= |
4,000 |
Less: Excess received on application
(3 × 2,000 – 3 × 1,000) |
= |
3,000 |
|
|
1,000 |