Page No 8.111:

Question 1:

Gopal Ltd. was registered with an authorised capital of ₹ 50,00,000 divided into Equity Shares of  ₹  100 each . The company offered for public subscription all the shares . Public applied for 45,000 shares and allotment was made to all the applicants. All the calls were made and were duly received except the final call of  ₹  20 per share on 500 shares. Prepare the Balance Sheet of the company showing the different types of share capital.

Answer:

Gopal Ltd.
Balance Sheet
Particulars	Note No.	Amount ( ₹)
I.  Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	44,99,000
2. Non-Current Liabilities
3. Current Liabilities
Total		44,99,000
II.  Assets
1. Non-Current Assets
2. Current Assets
a. Cash and Cash Equivalents	2	44,99,000
Total		44,99,000

NOTES TO ACCOUNTS

Note No.	Particulars		Amount ( ₹)
1	Share Capital
	Authorised Share Capital
	5,00,000 equity shares of  ₹ 10 each		50,00,000
	Issued Share Capital
	5,00,000 equity shares of  ₹ 10 each		50,00,000
	Subscribed, Called-up and Paid-up Share Capital
	4,50,000 equity shares of  ₹ 10 each	45,00,000
	Less: Calls in Arrears (500 shares ×  ₹ 2)	(1,000)	44,99,000
2	Cash and Cash Equivalents
	Cash at Bank		44,99,000

Page No 8.111:

Question 2:

Madanlal Ltd has authorised share capital of  ₹  50,00,000 divided into 5,00,000 Equity Shares of  ₹  10 each . It has existing issued and paid up capital of  ₹  5,00,000. It further issued to public 1,50,000 Equity Shares at par for subscription payable as under:

On Application:	₹ 3
On Allotment:	₹ 4 and
On Call:	Balance Amount.

The issue was fully subscribed and allotment was made to all the applicants . Call was made during the year and was duly received. Show share capital of the company in the Balance Sheet of the Company.

Answer:

Balance Sheet of  Madanlal Ltd.
Particulars	Note No.	Amount  ( ₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	20,00,000
Total		20,00,000
II. Assets
2. Current Assets
a.      Cash and Cash Equivalents	2	20,00,000
Total		20,00,000

 

Notes to Accounts
Particulars			Amount ( ₹)
1. Share Capital
Authorised Share Capital
5,00,000 Equity Shares of  ₹ 10 each			50,00,000
Issued Share Capital
50,000 Equity Shares of  ₹ 10 each	5,00,000
1,50,000 Equity Shares of  ₹ 10 each	15,00,000		20,00,000
Subscribed and Paid-up Share Capital
50,000 Equity Shares of  ₹ 10 each	5,00,000
1,50,000 Equity Shares of  ₹ 10 each	15,00,000		20,00,000
2. Cash and Cash Equivalents
Bank			20,00,000

Page No 8.112:

Question 3:

Nishant co. Ltd. has authorised share capital of  ₹ 1,00,00,000  divided into 1,00,000 Equity Shares of  ₹  100 each . It has existing issued and paid up capital of  ₹  25,00,000. It further issued to public 25,000 Equity Shares at a premium of 20% for subscription payable as under:

On Application:	₹ 30
On Allotment:	₹ 60 and
On Call:	Balance Amount.

The issue was fully subscribed and allotment was made to all the applicants . The company did not make the call during the year. Show share capital of the company in the Balance Sheet of the Company.

Answer:

Balance Sheet of Nishant co. Ltd.
Particulars	Note No.	Amount  ( ₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	42,50,000
b. Reserves and Surplus	2	5,00,000
Total		47,50,000
II Assets
2. Current Assets
a.      Cash and Cash Equivalents	3	47,50,000
Total		47,50,000

Notes to Accounts
Particulars		Amount ( ₹)
1. Share Capital
Authorised Share Capital
1,00,000 Equity Shares of  ₹ 100 each		1,00,00,000
Issued Share Capital
25,000 Equity Shares of  ₹ 100 each	25,00,000
25,000 Equity Shares of  ₹ 100 each	25,00,000	50,00,000
Subscribed Share Capital
Fully Called-up & Paid-up Capital
25,000 Equity Shares of  ₹ 100 each		25,00,000
Partially Called-up & Paid-up Capital
25,000 Equity Shares of  ₹ 100 each, 70 called-up		17,50,000
2. Reserves and Surplus
Securities Premium Reserve (25,000 shares @  ₹ 20 per share)		5,00,000
3. Cash and Cash Equivalents
Bank		47,50,000

Page No 8.112:

Question 4:

Star Ltd. is registered with capital of  ₹ 50,00,000 divided into 50,000 equity shares of  ₹ 100 each, The Company issued 25,000 equity shares for subscription. Subscription was received for 23,750 shares and all the due amount was duly received, except the first and final call of  ₹ 20 per share on 600 shares. Show the ‘Share Capital’ in the Balance Sheet of the company.

Answer:

In the books of Star Ltd. An Extract of Balance Sheet As at ……….
Particulars	Note No.	Amount ( ₹)
I. Equity And Liabilities Shareholders’ Funds
Share Capital	1	23,63,000

Notes to Accounts:
Note No.	Particulars		Amount ( ₹)
1.	Share Capital
	Authorised Capital
	50,000 equity shares of  ₹100 each		50,00,000
	Issued Capital
	25,000 shares of  ₹100 each		25,00,000
	Subscribed Capital
	23,750 shares of  ₹100 each	23,75,000
	Less: Calls-in-Arrears (600 × 20)	12,000	23,63,000
			23,63,000

Page No 8.112:

Question 5:

Moneyplus company issued 2,50,000 Equity Shares of  ₹ 10 each to public. All amounts have been received in lump sum. Pass necessary Journal entries in the books of the company.

Answer:

Authorised Capital 2,50,000 equity shares of  ₹ 10 each Issued and Subscribed Capital 2,50,000 shares

In the books of Moneyplus Journal
Date	Particulars		L.F.	Debit Amount ( ₹)	Credit Amount ( ₹)
	Bank A/c	Dr.		25,00,000
	To Equity Share Application A/c				25,00,000
	(Share application money received for 2,50,000 equity shares of  ₹ 10 each)
	Equity Share Application A/c	Dr.		25,00,000
	To Equity Share Capital A/c				25,00,000
	(Share application of 2,50,000 equity shares of  ₹ 10 each transferred to Equity Share Capital Account )

Page No 8.112: Question 6: The authorised capital of  ₹ 16,00,000 of Bharat Ltd. is divide into 1,60,000 Equity Shares of  ₹ 10 each. Out of these shares, 80,000 Equity Shares were issued at par to public for subscription. The full nominal value is payable on application. All the shares were subscribed by the public and total amount was paid for. Pass necessary journal entries in the books of the company. Answer: Authorised Capital 1,60,000 equity shares of  ₹ 10 each Issued and Subscribed Capital 80,000 equity shares

Books of Bharat Limited Journal
Date	Particulars		L.F.	Debit Amount ( ₹)	Credit Amount  ( ₹)
	Bank A/c	Dr.		8,00,000
	To Equity Share Application A/c				8,00,000
	(Share application money received for 80,000 Equity Shares of  ₹ 10 each)
	Equity Share Application A/c	Dr.		8,00,000
	To Equity Share Capital A/c				8,00,000
	(Share application of 80,000 shares of  ₹ 10 each transferred to Equity Share Capital Accounts)

Page No 8.112: Question 7: Ashish Ltd. invited applications for 10,000 shares of  ₹ 100 each payable as follows: ₹  20 on application,  ₹ 30 on allotment,  ₹ 20 on first call and the balance on final call. All the shares were applied and allotted. All the money was duly received. You are required to Journalise these transactions. Answer: Issued and Subscribed Capital 10,000 shares of  ₹ 100 each Payable as:

₹	20	on application
₹	30	on allotment
₹	20	on first call
₹	30	on final call
	100

Books of Ashish Limited Journal
Date	Particulars			L.F.	Debit Amount ( ₹)	Credit Amount ( ₹)
	Bank A/c	Dr.			2,00,000
	To Share Application A/c					2,00,000
	(Share application money received for 10,000 shares at  ₹ 20 per share)
	Share Application A/c	Dr.			2,00,000
	To Share Capital A/c					2,00,000
	(Share application of 10,000 shares of  ₹ 20 each transferred to Share Capital)
	Share Allotment A/c	Dr.			3,00,000
	To Share Capital A/c					3,00,000
	(Share allotment due on 10,000 shares at  ₹ 30 per share)
	Bank A/c	Dr.			3,00,000
	To Share Allotment A/c					3,00000
	(Share allotment money received for 10,000 Shares at  ₹ 30 per share)
	Share First Call A/c	Dr.			2,00,000
	To Share Capital A/c					2,00,000
	(Share first call due on 10,000 shares at  ₹ 20 per share)
	Bank A/c	Dr.			2,00,000
	To Share First call A/c					2,00,000
	(Share first call received on 10,000 shares at  ₹ 20 per share)
	Share Final Call A/c		Dr.		3,00,000
	To Share Capital A/c					3,00,000
	(Share Final call due on 10,000 shares at  ₹30 per shares)
	Bank A/c		Dr.		3,00,000
	To Share Final Call A/c					3,00,000
	(Share final call received on 10,000 shares at  ₹ 30 per share)

Page No 8.112: Question 8: Marigold Ltd . was registered with the authorized capital of  ₹ 3,00,000 divided into 3,000 shares of  ₹ 100 each, which were offered to the public . Amount payable as  ₹ 30  per share on application ,  ₹ 40 per share on allotment and  ₹ 30 per share on first and final call . These shares were fully subscribed and all money  was dully received . Prepare journal and Cash Book. Answer:

Journal
Date	Particulars		L.F.	Debit Amount ( ₹)	Credit Amount ( ₹)
	Share Application A/c	Dr.		90,000
	To Share Capital				90,000
	(Share application money transferred)
	Share Allotment A/c	Dr.		1,20,000
	To Share Capital A/c				1,20,000
	(Share allotment money transferred)
	Share First and Final Call A/c	Dr.		90,000
	To Share Capital A/c				90,000
	(Share first and final call money transferred)

Cash Book
Dr.				Cr.
Particulars		Amount ( ₹)	Particulars		Amount ( ₹)
Share Application A/c		90,000	Balance c/d		3,00,000
Share Allotment A/c		1,20,000
Share First and Final Call A/c		90,000
		3,00,000			3,00,000

Page No 8.112: Question 9: Modern Marbles Ltd. was registered with an authorised capital of  ₹10,00,000 divided into 7,500 Equity Shares of  ₹  100 each and, 2,500 Preference Shares of  ₹100 each. 1,000 Equity Shares and 500; 9% Preference Shares were offered to public on the following terms – Equity Shares payable  ₹10 on application,  ₹40 on allotment and the balance in two calls of  ₹  25 each. Preference Shares are payable  ₹ 25 on application,  ₹ 25 on allotment and  ₹50 on first and final call. All the shares were applied for and allotted . Amount due was duly received. Prepare Cash Book and pass necessary Journal entries to record the above issue of shares and show how the Share Capital will appear in the Balance Sheet. Answer: Authorised Capital: Equity Shares 7,500 of  ₹ 100 each. 9% Preference Shares 2,500 of  ₹ 100 each. Issued Capital: Equity Shares 1,000 of  ₹ 100 each. Payable as ₹ 10 on Application ₹ 40 on Allotment ₹ 25 on First Call ₹ 25 on Final Call Preference Shares 500 of  ₹ 100 each. Payable as ₹ 25 on application ₹ 25 on allotment ₹ 50 on first and final call

Books of Modern Marbles Limited Cash Book
Dr.							Cr.
Date	Particulars	L.F.	Bank ( ₹)	Date	Particulars	L.F.	Bank ( ₹)
	Equity Share Application		10,000
	Preference Share Application		12,500
	Equity Share Allotment		40,000
	Preference Share Allotment		12,500
	Equity Share First Call		25,000
	Preference Share First and Final Call		25,000
	Equity Share Final Call		25,000		Balance c/d		1,50,000
			1,50,000				1,50,000

Journal
	Particulars		L.F.	Debit Amount ( ₹)	Credit Amount  ( ₹)
	Equity Share Application A/c	Dr.		10,000
	To Equity Share Capital A/c				10,000
	(Equity share application of 1,000 shares of  ₹ 10 each transferred to Equity Share Capital Account)
	Preference Share Application A/c	Dr.		12,500
	To 9% Preference Share Capital A/c				12,500
	(Preference share applications of 500 shares  ₹ 25 each transferred to 9% Preference Share Capital Account)
	Equity Share Allotment A/c	Dr.		40,000
	To Equity Share Capital A/c				40,000
	(Equity share allotment due on 1,000 shares at  ₹ 40 each)
	Preference Share Allotment A/c	Dr.		12,500
	To 9% Preference Share Capital A/c				12,500
	(Preference share allotment due on 500 shares at  ₹ 25 each)
	Equity Share First Call A/c	Dr.		25,000
	To Equity Share Capital A/c				25,000
	(Equity share first call due on 1,000 shares at  ₹ 25 each)
	Preference Share First and Final Call A/c	Dr.		25,000
	To 9% Preference Share Capital A/c				25,000
	(Preference share first and final call due on 500 shares at  ₹ 50 each)
	Equity Share Final Call A/c	Dr.		25,000
	To Equity Share Capital A/c				25,000
	(Equity share final call due on 1,000 shares at  ₹ 25 each)
Balance Sheet
Particulars					Note No.	Amount ( ₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital					1	1,50,000
2. Non-Current Liabilities
3. Current Liabilities
Total						1,50,000
II. Assets
1. Non-Current Assets
2. Current Assets
a. Cash and Cash Equivalents					2	1,50,000
Total						1,50,000

NOTES TO ACCOUNTS

Note No.	Particulars		Amount ( ₹)
1	Share Capital
	Authorised Share Capital
	75,000 Equity Shares of  ₹ 100 each	7,50,000
	25,000 9% Preference Shares of  ₹ 100 each	2,50,000	10,00,000
	Issued Share Capital
	1,000 Equity Shares of  ₹ 100 each	1,00,000
	500 9% Preference Shares of  ₹ 100 each	50,000	1,50,000
	Subscribed, Called-up and Paid-up Share Capital
	1,000 Equity Shares of  ₹ 100 each	1,00,000
	500 9% Preference Shares of  ₹ 100 each	50,000	1,50,000
2	Cash and Cash Equivalents
	Cash at Bank		1,50,000

Page No 8.112: Question 10: Answer:

Books of Premio Limited Journal
Date	Particulars		L.F.	Debit Amount ( ₹)	Credit Amount ( ₹)
	Bank A/c	Dr.		50,00,000
	To Share Application A/c				50,00,000
	(Application money received for 50,000 shares at  ₹ 5 per shares)
	Share Application A/c	Dr.		50,00,000
	To Share Capital A/c				50,00,000
	(Application money of 50,000 share transferred to Share Capital at  ₹ 100 per share)
	Share Allotment A/c	Dr.		25,00,000
	To Securities Premium A/c				25,00,000
	(Share allotment due on 50,000 shares ₹ 50 securities premium)
	Bank A/c	Dr.		25,00,000
	To Share Allotment A/c				25,00,000
	(Share Allotment money received)

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. 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