Page No 8.114:

Question 21:

Blue chip Ltd. was registered on 1st January,2011 with a capital of  ₹10,00,000 divided into 1,00,000 shares of  ₹ 10 each . The company issued 42,000 shares of which 40,000 shares were taken up by the public and  ₹ 1 per share was received with application. On 1st February , these shares were allotted and  ₹ 2 per share was duly received on 28th February as allotment money. A first call of  ₹ 3 per share was made on 1st March and the call money on all shares with the exception of 100 shares was received . The final call of  ₹ 4 per share was made on 1st June and the amount due, with the exception of 400 shares , was received by 30th June. Pass necessary journal ands Cash Book entries and prepare the Balance Sheet as at 30th June, 2011.    

Answer:

Authorised Capital 1,00,000 shares of  ₹ 10 each Issued Capital 42,000 shares of  ₹ 10 each Applied 40,000 shares Payable as: ₹ 1 on application ₹ 2 on allotment ₹ 3 on first call ₹ 4 on final call

Books of Blue chip Ltd. Cash Book
Dr.									Cr.
Date		Particulars	L.F.	Bank  ₹	Date	Particulars	L.F.	Bank  ₹
2011					2011
Feb 01		Share Application		40,000
Feb 28		Share Allotment		80,000
May 01		Share First Call		1,19,700
June 30		Share Final Call		1,58,400		Balance c/d		3,98,100
				3,98,100				3,98,100

 

Journal
Date	Particulars		L.F.	Debit Amount  ₹	Credit  Amount   ₹
2011
Feb 01	Share Application A/c	Dr.		40,000
	To Share Capital A/c				40,000
	(Share application of 40,000 shares at Re 1 each transferred to Share Capital Account)
Feb 01	Share Allotment A/c	Dr.		80,000
	To Share Capital A/c				80,000
	(Share allotment due on 40,000 shares at  ₹ 2 each)
Mar 01	Share First Call A/c	Dr.		1,20,000
	To Share Capital A/c				1,20,000
	(Share first call due on 40,000 shares at  ₹ 3 each)
May 30	Calls-in-Arrears A/c	Dr.		300
	To Share First Call A/c				300
	(Share first call outstanding on 100 shares at  ₹ 3 each)
June 01	Share Final Call A/c	Dr.		1,60,000
	To Share Capital A/c				1,60,000
	(Share final call due on 40,000 shares of  ₹ 4 each)
June 30	Calls-in-Arrears A/c	Dr.		1,600
	To Share Final Call A/c				1,600
	(Share final call outstanding on 400 shares at  ₹ 4 each)

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

Blue chpi Ltd.
Balance Sheet
Particulars	Note No.	Amount  ( ₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	3,98,100
2. Non-Current Liabilities
3. Current Liabilities
Total		3,98,100
II. Assets
1. Non-Current Assets
2. Current Assets
a. Cash and Cash Equivalents	2	3,98,100
Total		3,98,100

  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
	42,000 shares of  ₹ 10 each		4,20,000
	Subscribed, Called-up and Paid-up Share Capital
	40,000 shares of  ₹ 10 each	4,00,000
	Less: Calls-in-Arrears	(1,900)	3,98,100
2	Cash and Cash Equivalents
	Cash at Bank		3,98,100

   

Page No 8.114:

Question 22     Answer: As per the Schedule III of Companies Act, 2013, the Company’s Balance Sheet is presented as follows.

Blue chip Ltd.
Balance Sheet
Particulars	Note No.	Amount  ( ₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a.      Share Capital b.     Securities premium reserve	1 2	1,20,00,000 15,60,000
Total		1,35,60,000
II. Assets
1. Non-Current Assets
2. Current Assets
a. Cash and Cash Equivalents	2	1,35,60,000
Total		1,35,60,000

  NOTES TO ACCOUNTS

Note No.	Particulars		Amount ( ₹)
1	Share Capital
	Authorised Share Capital
	12,00,000 shares of  ₹ 10 each		1,20,00,000
	Issued Share Capital
	8,00,000 shares of  ₹ 10 each		8,00,000
	Subscribed, Called-up and Paid-up Share Capital
	7,80,000 shares of  ₹ 10 each	78,00,000
2	Cash and Cash Equivalents
	Cash at Bank		1,35,60,000
3	Reserve and surplus
	Securities premium reserve 7,80,000 shares at ₹2 each		15,60,000

   

Page No 8.114:

Question 23:

Ghosh Ltd. made the second and final call on its 50,000 Equity Shares @  ₹ 2 per share on 1st January, 2016. The entire amount was received on 15th January, 2016 except on 100 shares allotted to Venkat. Pass necessary journal entries for the call money due and received by opening Calls-in-Arrears Account.  

Answer:

Books of Ghosh Limited Journal
Date	Particulars		L.F.	Debit Amount   ₹	Credit  Amount   ₹
2016
Jan. 01	Share Second and Final Call A/c	Dr.		1,00,000
	To Equity Share Capital A/c				1,00,000
	(Share second and final call due on 50,000 shares at  ₹ 2 per share)
Jan. 15	Bank A/c	Dr.		99,800
	Calls-in-Arrears A/c	Dr.		200
	To Share Second and Final Call A/c				1,00,000
	(Share second and final call received from 49,900 shares and 100 shares failed to pay the it)

     

Page No 8.114:

Question 24:

Star Ltd was registered with a capital of  ₹ 5,00,000 in shares of  ₹ 10 each and issued 20,000 such shares at a premium of  ₹ 2 per share, payable as  ₹ 2 per share on application,  ₹ 5 per share on allotment (including premium) and  ₹ 2 per share on first call made three months later. All the money payable on application and allotment was duly received but when the first call was made, one shareholder paid the entire balance on his holding of 300 shares and another shareholder holding 1,000 shares failed to pay the first call money. Pass journal entries to record the above transactions and show how they will appear in the company’s Balance Sheet.    

Answer:

Amount Payable on:

Application	₹	2
Allotment	₹	5	(3+2)
First Call	₹	2
Called-up	₹	9	(7+2)

 

Books of Star Ltd. Journal
Date	Particulars		L.F.	Debit Amount  ( ₹)	Credit  Amount ( ₹)
	Bank A/c	Dr.		40,000
	To Share Application A/c				40,000
	(Share application money received for 20,000 shares at  ₹ 2 per share)
	Share Application A/c	Dr.		40,000
	To Share Capital A/c				40,000
	(Share application of 20,000 shares at  ₹ 2 per share transferred to Share Capital Account)
	Share Allotment A/c	Dr.		1,00,000
	To Share Capital A/c				60,000
	To Securities Premium A/c				40,000
	(Share allotment due on 20,000 shares at  ₹ 5 per share including  ₹ 2 premium)
	Bank A/c	Dr.		1,00,000
	To Share Allotment A/c				1,00,000
	(Share allotment received on 20,000 shares at  ₹ 5 per share)
	Share First Call A/c	Dr.		40,000
	To Share Capital A/c				40,000
	(Share first call due on 20,000 shares at  ₹ 2 per shares)
	Bank A/c	Dr.		38,900
	Calls-in-Arrears A/c	Dr.		2,000
	To Share First Call A/c				40,000
	To Calls-in-Advance A/c				900
	(Share first call received on 39,000 shares at  ₹ 2 each, 300 shares paid calls-in-advance at  ₹ 3 per share and 1,000 shares failed to pay to first call money)

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

Star Ltd.
Balance Sheet
Particulars	Note No.	Amount  ( ₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	1,38,000
b. Reserves and Surplus	2	40,000
2. Non-Current Liabilities
3. Current Liabilities
a. Other Current Liabilities	3	900
Total		1,78,900
II. Assets
1. Non-Current Assets
2. Current Assets
a. Cash and Cash Equivalents	4	1,78,900
Total		1,78,900

  NOTES TO ACCOUNTS

Note No.	Particulars		Amount ( ₹)
1	Share Capital
	Authorised Share Capital
	50,000 shares of  ₹ 10 each		5,00,000
	Issued Share Capital
	20,000 shares of  ₹ 10 each		2,00,000
	Subscribed, Called-up and Paid-up Share Capital
	20,000 shares of  ₹ 10 each,  ₹ 7 Called-up and Paid-up	1,40,000
	Less: Calls-in-Arrears	(2,000)	1,38,000
2	Reserves and Surplus
	Securities Premium		40,000
3	Other Current Liabilities
	Calls-in-Advance		900
4	Cash and Cash Equivalents
	Cash at Bank		1,78,900

   

Page No 8.115:

Question 25:

Green Ltd. issued 8,000 Equity Shares of Rs 10 each.  ₹ 5 per share was called, payable  ₹ 2 on application,  ₹ 1 on allotment ,  ₹ 1 on first call and  ₹ 1 on second call. All the money was duly received with the following exceptions: A who holds 250 shares paid nothing after application. B who holds 500 shares paid nothing after allotment. C who holds 1,250 shares paid nothing after first call. Prepare Journal and the Balance Sheet.    

Answer:

Issued Capital 5,000 Shares of  ₹10 each  ₹ 5 called up

		shares	A	B
Application	₹ 2	8,000				=	8,000
Allotment	₹ 1	8,000	-250			=	7,750
First call	₹ 1	8,000	-250	-500		=	7,250
Second call	₹ 1	8,000	-250	-500	-1250	=	6,000
Called-up	₹ 5

s

Books of Green Ltd. Journal
Date	Particulars		L.F.	Debit Amount ( ₹)	Credit Amount ( ₹)
	Bank A/c	Dr.		16,000
	To Share Application A/c				16,000
	(Share application money received for 8,000 shares at  ₹2 each)
	Share Application A/c	Dr.		16,000
	To Share Capital A/c				16,000
	(Application money transferred to Share Capital)
	Share Allotment A/c	Dr.		8,000
	To Share Capital A/c				8,000
	(Allotment due on 8,000 shares at Re 1 each)
	Bank A/c	Dr.		7,750
	Call-in-Arrears A/c	Dr.		250
	To Share Allotment A/c				8,000
	(Allotment money received on 7,750 shares and 250 shares failed to pay it)
	Share First Call A/c	Dr.		8,000
	To Share Capital A/c				8,000
	(First call due on 8,000 shares at Re 1 each)
	Bank A/c	Dr.		7,250
	Calls in Arrears A/c	Dr.		750
	To Share First Call A/c				8,000
	(Share first call money received on 7,250 shares and 750 shares failed to pay it)
	Share Second Call A/c	Dr.		8,000
	To Share Capital A/c				8,000
	(Share second call due on 8,000 shares at  ₹ l each)
	Bank A/c	Dr.		6,000
	Call-in-Arrears A/c	Dr.		2,000
	To Share Second Call A/c				8,000
	(Share second call money received on 6,000 shares and 2000 shares failed to pay it)

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

Green Ltd.
Balance Sheet
Particulars	Note No.	Amount  ( ₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	37,000
2. Non-Current Liabilities
3. Current Liabilities
Total		37,000
II. Assets
1. Non-Current Assets
2. Current Assets
a. Cash and Cash Equivalents	2	37,000
Total		37,000

NOTES TO ACCOUNTS

Note No.	Particulars		Amount ( ₹)
1	Share Capital
	Authorised Share Capital
	……. shares of  ₹ 10 each		–
	Issued Share Capital
	8,000 shares of  ₹ 10 each		80,000
	Subscribed, Called-up and Paid-up Share Capital
	8,000 shares of  ₹ 10 each,  ₹ 5 Called-up and Paid-up	40,000
	Less: Calls-in-Arrears	(3,000)	37,000
2	Cash and Cash Equivalents
	Cash at Bank		37,000

 

Page No 8.115:

Question 26:

Bharat Ltd made the first call of  ₹ 2 per share on its 1,00,000 Equity Shares on 1st March , 2006. Ashok, a shareholder, holding 800 shares paid the second and final call amount along with the first call money. The second and final call amount was  ₹ 3 per share. Pass necessary journal entries for recording  the above using the Calls-in Advance Account.    

Answer:

Books of Bharat Ltd. Journal
Date	Particulars		L.F.	Debit Amount  ₹	Credit Amount  ₹
2006
	Equity Share First Call A/c	Dr.		2,00,000
	To Equity Share Capital A/c				2,00,000
	(Shares first call due on 1,00,000 shares at  ₹ 2 per share)
Mar 01	Bank A/c	Dr.		2,02,400
	To Equity Share First Call A/c				2,00,000
	To Call-In-Advance A/c				2,400
	(Share first call received with call-in-advance of 800 shares at  ₹ 3 per share)

   

Page No 8.115:

Question 27:

   

Answer:

	Particulars		Amount ( ₹)
	Share Capital
A	Authorised Share Capital
	10,000 shares of  ₹ 100 each		10,00,000
B	Issued Share Capital
	9,000 shares of  ₹ 100 each		9,00,000
C	Subscribed Share Capital
	9,000 shares of  ₹ 100 each,		9,00,000
D	Called-up share capital
	9,000 shares of ₹60 each		5,40,000
E	Paid – up share capital 9,000 shares of ₹60 each                                       5,40,000 Less: Calls-in-arrears (550×20)                                       11,000		5,39,000
F	Calls-in-arrears Money received on Allotment ₹1,69,000 No. of shares on allotment money received= = 1,69,000/20= 8,450 No. of shares on allotment money have not been received =9,000-8,450=550 Allotment money not received= 550×20		11,000

   

Page No 8.115:

Question 28:

2,000 Equity Shares of  ₹ 10 each  were issued to  Limited  from whom assets of  ₹ 25,000 were acquired . Pass Journal entry.    

Answer:

Journal
Date	Particulars		L.F.	Debit Amount  ₹	Credit  Amount  ₹
	Assets A/c	Dr.		25,000
	To X Ltd.				25,000
	(Assets bought from X Ltd.)
	X Ltd.	Dr.		25,000
	To Share Capital A/c				20,000
	To Securities Premium A/c				5,000
	(2,000 shares of  ₹ 10 each issued to X Ltd.)

   

Page No 8.115:

Question 29:

‘Amrit Dhara Ltd.’ issued 800 Equity Shares of  ₹ 100 each at a premium of 25% as fully paid-up in consideration of the purchase of plant and machinery of  ₹ 1,00,000. Pass entries in company’s Journal.    

Answer:

Books of Amrit Dhara Limited Journal
Date	Particulars		L.F.	Debit Amount ( ₹)	Credit Amount ( ₹)
	Plant & Machinery A/c	Dr.		1,00,000
	To Vendor A/c				1,00,000
	(Machinery purchased)
	Vendor A/c	Dr.		1,00,000
	To Equity Share Capital A/c (800 × 100)				80,000
	To Securities Premium A/c (800 × 25)				20,000
	(Shares issued to vendor at a premium of  ₹ 25 per share)

   

Page No 8.115:

Question 30:

Rajan Ltd . purchased assets from Geeta & Co . for  ₹ 5,00,000. A sum of  ₹ 1,00,000 was paid by means of a bank draft and for the balance due Rajan Ltd. issued equity Shares of  ₹ 10 each at a premium of 25%. journalise the above transactions in the books of the company.    

Answer:

Books of Rajan Limited Journal
Date	Particulars		L.F.	Debit  Amount  ₹	Credit  Amount  ₹
	Assets A/c	Dr.		5,00,000
	To Geeta & Co.				5,00,000
	(Assets purchased from Geeta & Co.)
	Geeta & Co.	Dr.		1,00,000
	To Bank A/c				1,00,000
	(Payment made to Geeta & Co.)
	Geeta & Co.	Dr.		4,00,000
	To Equity Share Capital A/c				3,20,000
	To Securities Premium A/c				80,000
	(32,000 equity shares of  ₹ 10 issued at 25% premium)

  Working Note-   Number of shares issued=4,00,000/10+2.5=32,000 shares  

Page No 8.115:

Question 31:

Z Ltd . purchased furniture costing  ₹ 2,20,000 from C.D Ltd. The payment was to be made by issue of 9% Preference Shares of  ₹ 100 each  ata  premium of  ₹ 10 per share . Pass necessary Journal entries in the books of Z Ltd.    

Answer:

Books of Z Ltd. Journal
Date	Particulars		L.F.	Debit Amount   ₹	Credit Amount   ₹
	Assets A/c	Dr.		2,20,000
	To C.D Ltd.				2,20,000
	(Assets purchased from C.D Ltd.)
	C.D Ltd.	Dr.		2,20,000
	To 9% Preference Share Capital				2,00,000
	To Securities Premium A/c				20,000
	(2,000 9% Preference Shares of  ₹ 100 each issued at 10% premium to C.D Ltd.)

  Working Note: Number of shares issued=2,20,000/100+10=2,000 shares    

Page No 8.115:

Question 32:

Goodluck Ltd purchased  machinery costing  ₹ 10,00,000 from Fair Deals Ltd. The company paid the price by issue of Equity Shares of  ₹ 10 each at a premium of 25%. Pass necessary Journal entries for the above transactions in the books of Goodluck Ltd.    

Answer:

Books Goodluck Ltd. Journal
Date	Particulars			L.F.	Debit  Amount   ₹	Credit Amount   ₹
	Machinery A/c		Dr.		10,00,000
	To Fail Deals Ltd.					10,00,000
	(Machinery purchased from Fair Deals Ltd.)
	Fair Deals Ltd.	Dr.			10,00,000
	To Equity Share Capital A/c					8,00,000
	To Securities Premium A/c					2,00,000
	(80,000 equity shares of  ₹ 10 each issued at 25% premium)

  Working Note:   Number of shares issued=10,00,000/10+2.5=80,000 shares    

Page No 8.115:

Question 33:

Jain Ltd  purchased machinery costing  ₹ 10,00,000 from Ayer Ltd. 50% of the payment was made by cheque and for the remaining 50% , the company issued Equity Shares of  ₹ 100 each at a premium of 25% . Pass necessary Journal entries  in the books of Jain Ltd . for the above transaction.    

Answer:

Books of Jain Ltd. Journal
Date	Particulars		L.F.	Debit Amount  ₹	Credit Amount   ₹
	Machinery A/c	Dr.		10,00,000
	To Ayer Ltd.				10,00,000
	(Machinery purchased from Ayer Ltd.)
	Ayer Ltd.	Dr.		5,00,000
	To Bank A/c				5,00,000
	(Payment made to Ayer Ltd.)
	Ayer Ltd.	Dr.		5,00,000
	To Equity Share Capital A/c				4,00,000
	To Securities Premium A/c				1,00,000
	(4,000 equity shares of  ₹ 100 each issued at 25% premium)

  Working Note-   Amount paid through bank draft =10,00,000×50/100=5,00,000 Number of shares issued = 5,00,000/100+25 =4,000 shares    

Page No 8.115:

Question 34:

Sona Ltd.  purchased machinery costing  ₹ 17,00,000 from Mona Ltd. Sona Ltd. paid 20% of the amount by cheque and for the balance amount issued Equity Shares of  ₹ 100 each at a premium of 25% . Pass necessary Journal entries for the above transactions in the books of Sona Ltd .Show your working notes clearly.    

Answer:

Journal In the Books of Sona Ltd.
Date	Particulars		L.F.	Debit Amount ( ₹)	Credit Amount ( ₹)
	Machinery A/c	Dr.		17,00,000
	To Mona Ltd.				17,00,000
	(Machinery purchased on credit from Sona Ltd.)
	Mona Ltd.	Dr.		3,40,000
	To Bank A/c				3,40,000
	(20% amount paid through cheque)
	Mona Ltd. (17,00,000 – 3,40,000)	Dr.		13,60,000
	To Equity Share Capital*				10,88,000
	To Securities Premium A/c*				2,72,000
	(Issued 10,880 shares of  ₹ 100 each to Mona Ltd. at 25% Premium)

  Working Notes: *   Number of shares = purchase consideration/face value of share+premium=13,60,000/100+25=10,880 shares Amount of shares capital  issued=10,880×100=10,88,000 Amount of securities premium on shares issued=10,88,000×25/100=2,72,000    

Page No 8.115:

Question 35:

Bharat Lamp Ltd. issued 30,000 fully paid-up shares of   ₹ 100 each for purchase of the following assets and liabilities from Sharma & Co:

Plant	₹ 7,00,000	Stock-in-Trade	₹ 9,00,000
Land and Building	₹ 12,00,000	Sundry Creditors	₹ 2,00,000

    You are required to pass necessary Journal entries.    

Answer:

Books of Bharat Lamp Limited Journal
Date	Particulars		L.F.	Debit  Amount ( ₹)	Credit  Amount ( ₹)
	Goodwill A/c	Dr.		4,00,000
	Plant A/c	Dr.		7,00,000
	Stock-in-Trade A/c	Dr.		9,00,000
	Land and Building	Dr.		12,00,000
	To Sundry Creditors A/c				2,00,000
	To Sharma & Co				30,00,000
	(Asset purchased and liabilities accepted from Sharma & Co)
	Sharma & Co	Dr.		30,00,000
	To Share Capital A/c				30,00,000
	(30,000 shares of  ₹ 100 each issued to Sharma & Co.)

Page No 8.116:

Question 36:

Sure Ltd. purchased a running business from M/s. Rai Brothers for a sum of  ₹ 15,00,000 payable  ₹ 12,00,000 in fully paid shares of  ₹ 10 each  and balance through cheque. The  assets and liabilities consisted of the following:

Plant and     Machinery	₹ 4,00,000	Stock	₹ 4,00,000
Building	₹ 4,00,000	Cash	₹ 3,00,000
Sundry Debtors	₹ 3,00,000	Sundry Creditors	₹ 2,00,000

You are required to pass necessary Journal entries in the company’s books.    

Answer:

Books of Sure Ltd. Journal
Date	Particulars		L.F.	Debit Amount ( ₹)	Credit Amount  ( ₹)
	Plant and Machinery	Dr.		4,00,000
	Building A/c	Dr.		4,00,000
	Sundry Debtors A/c	Dr.		3,00,000
	Stock A/c	Dr.		4,00,000
	Cash A/c	Dr.		3,00,000
	To Sundry Creditors A/c				2,00,000
	To M/s Rai Brothers				15,00,000
	To Capital Reserve A/c				1,00,000
	(Business of M/s Rai Brothers took over)
	M/s Rai Brothers	Dr.		12,00,000
	To Share Capital A/c				12,00,000
	(Shares issued to M/s Rai Brothers)
	M/S Rai Brothers	Dr.		3,00,000
	To Bank A/c				3,00,000
	(Payment made to M/s Rai Brothers through cheque)

   

Page No 8.116:

Question 37:

Sandesh Ltd. took over the assets of  ₹ 7,00,000 and liabilities of    ₹ 2,00,000 from Sanchar Ltd. for a purchase consideration of   ₹ 4,59,500.   ₹ 8,500 were paid by accepting a draft in favour of Sanchar Ltd. payable after three months and the balance was paid by issue of equity shares of   ₹ 10 each at a premium of 10% in favour of Sanchar Ltd. Pass necessary journal entries for the above transactions in the books of Sandesh Ltd.    

Answer:

Sandesh Ltd. Journal
Date	Particulars		L.F.	Debit Amount ( ₹)	Credit Amount ( ₹)
(i)	Sundry Assets A/c	Dr.		7,00,000
	To Sundry Liabilities A/c				2,00,000
	To Sanchar Ltd.				4,59,500
	To Capital Reserve A/c				40,500
	(Purchase of assets and liabilities of Sanchar Ltd.)
(ii)	Sanchar Ltd.	Dr.		4,59,500
	To Equity Share Capital A/c				4,10,000
	To Securities Premium A/c				41,000
	To Bank A/c				8,500
	(41,000 Equity Shares issued of  ₹ 10 each at a premium of Re 1 per share and  ₹ 8,500 by bank draft)

  Working Notes: WN1: Calculation of Number of Equity Shares Number of shares issued= Purchaese consideration/issue price=4,51,000/11=41,000    

Page No 8.116:

Question 38:

Better Prospect Ltd. acquired land costing   ₹ 1,00,000 and in payment allotted 1,000 Equity Shares of   ₹ 100 each as fully paid. Further, the company issued 4,000 Equity Shares to public . The shares were payable as:   ₹ 30 on application ;   ₹ 30 on allotment;   ₹ 40 on first and final call. Applications were received for all shares which were allotted . All the money was received except the call on 200 shares. Pass journal entries and prepare Balance Sheet of the company.    

Answer:

Issued to public payable as:

₹	30	on application
₹	30	on allotment
₹	40	first and final call
₹	100	Called-up

 

Books of Better Prospect Ltd. Journal
Date	Particulars		L.F.	Debit Amount   ₹	Credit Amount   ₹
	Land A/c	Dr.		1,00,000
	To Vendor				1,00,000
	(Land purchased from the vendor)
	Vendor	Dr.		1,00,000
	To Equity Share Capital A/c				1,00,000
	(1,000 equity of  ₹ 100 each issued to Vendor)
	Bank A/c	Dr.		1,20,000
	To Equity Share Application A/c				1,20,000
	(Share Application money received for 4,000 equity shares at  ₹ 30 per share)
	Equity Share Application A/c			1,20,000
	To Equity Share Capital	Dr.			1,20,000
	(Share Application money of 4,000 shares transferred to Equity Share Capital Account)
	Equity Share Allotment A/c	Dr.		1,20,000
	To Equity Share Capital A/c				1,20,000
	(Share allotment due on 4,000 equity shares of  ₹ 30 each)
	Bank A/c	Dr.		1,20,000
	To Share Allotment A/c				1,20,000
	(Share allotment received for 4,000 shares at  ₹ 30 per share)
	Share First and Final Call A/c	Dr.		1,60,000
	To Equity Share Capital A/c				1,60,000
	(First and final call due on 4,000 equity shares at 40 per share)
	Bank A/c	Dr.		1,52,000
	Calls-in-Arrears A/c	Dr.		8,000
	To Share First and Final Call A/c				1,60,000
	(First and final call received from 3,800 shares and 200 share failed to pay it)

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

Better Prospect Ltd.
Balance Sheet
Particulars	Note No.	Amount  ( ₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	4,92,000
2. Non-Current Liabilities
3. Current Liabilities
Total		4,92,000
II. Assets
1. Non-Current Assets
a. Fixed Assets
i. Tangible Assets	2	1,00,000
2. Current Assets
a. Cash and Cash Equivalents	3	3,92,000
Total		4,92,000

  NOTES TO ACCOUNTS

Note No.	Particulars		Amount ( ₹)
1	Share Capital
	Authorised Share Capital
	…… shares of  ₹ 100 each		–
	Issued Share Capital
	5,000 shares of  ₹ 100 each		5,00,000
	Subscribed, Called-up and Paid-up Share Capital
	1,000 shares of  ₹ 100 each (for consideration other than cash)	1,00,000
	4,000 shares of  ₹ 100 each	4,00,000
	Less: Calls-in-Arrears	(8,000)	4,92,000
2	Tangible Assets
	Land		1,00,000
3	Cash and Cash Equivalents
	Cash at Bank		3,92,000

   

Page No 8.116:

Question 39:

Light Lamps Ltd. issued 50,000 shares of  ₹ 10 each as fully paid-up to the promoters for their services to set-up the company . It also issued 2,000 shares of  ₹ 10 each credited as fully paid-up to the underwriters of shares for their services . journalise these transactions.    

Answer:

Journal
Date	Particulars		L.F.	Debit Amount ( ₹)	Credit Amount ( ₹)
	Incorporation Expenses A/c	Dr.		5,00,000
	To Share Capital A/c (50,000×10)				5,00,000
	(Shares issued to promoters)
	Underwriting Commission A/c	Dr.		20,000
	To Underwriters’ A/c				20,000
	(Underwriting commission due)
	Underwriters’ A/c	Dr.		20,000
	To Share Capital A/c (2,000×10)				20,000
	(Shares issued to underwriters)

   

Page No 8.116:

Question 40:

Alpha Ltd. issued 20,000 Equity Shares of   ₹ 10 each at par payable: On application  ₹ 2 per share; on allotment  ₹ 3 per share; on first call  ₹ 3 per share; on second and final call  ₹ 2 per share. Mr. Gupta was allotted 100 shares. Pass necessary  Journal entry relating to the forfeiture of shares in each of the following alternative cases:

Case I	If Mr. Gupta failed to pay the allotment money and his shares were immediately forfeited.
Case II	If Mr. Gupta failed to pay allotment money and on his subsequent failure to pay the first call, his shares were forfeited.
Case III	If Mr. Gupta failed to pay the first call and on his subsequent failure to pay the second and final call, his shares were forfeited.

   

Answer:

Application		₹	2
Allotment		₹	3
First Call		₹	3
Final Call		₹	2
			10
Books of Alpha Limited Journal
Date	Particulars					L.F.	Debit Amount ( ₹)	Credit Amount ( ₹)
Case I	Share Capital A/c (100×5)				Dr.		500
	To Share Forfeiture A/c							200
	To Share Allotment A/c							300
	(100 shares of  ₹ 10 each,  ₹ 5 called-up, forfeited for the non-payment of allotment)
Case II	Share Capital A/c (100 × 8)				Dr.		800
	To Share Forfeiture A/c							200
	To Share Allotment A/c							300
	To Share First Call A/c							300
	(100 shares of  ₹ 10 each,  ₹ 8 called-up forfeited for non-payment allotment and first-call)
Case III	Share Capital A/c				Dr.		1,000
	To Share Forfeiture A/c							500
	To Share First Call A/c							300
	To Share Final Call A/c							200
	(100 shares of  ₹ 10 each forfeited for the non-payment  ₹ 5 each)