12th | Company Accounts- Accounting for Share Capital | Question No. 9 To 12 | Ts Grewal Solution 2022-2023

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

Journal

Particulars

L.F.

Debit

( `)

Credit

( `)

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.

( `)

I. Equity and Liabilities

1. Shareholders’ Funds

a. Share Capital

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

1,50,000

Total

1,50,000

NOTES TO ACCOUNTS


Note No.	Particulars		( `)
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

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 ( `)	Credit ( `)

	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.	( `)	Date	Particulars	L.F.	( `)

	To Share Capital		50,000		By Bank		50,000

			50,000				50,000

Share Allotment Account
Dr.							Cr.
Date	Particulars	L.F.	( `)	Date	Particulars	L.F.	( `)

	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.	( `)	Date	Particulars		L.F.	( `)

	To Share Capital		50,000		By Bank			50,000

			50,000					50,000

Share Second Call Account
Dr.							Cr.
Date	Particulars	L.F.	( `)	Date	Particulars	L.F.	( `)

	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.

( `)

Date

Particulars

L.F.

( `)

To Share Capital

50,000

By Bank

48,000

Calls-in-Arrears

2,000

50,000

Call-in-Arrears Account

Dr.

Cr.

Date

Particulars

L.F.

( `)

Date

Particulars

L.F.

( `)

To Share Second Call

1,000

By Balance c/d

3,000

To Share Final Call

2,000

3,000

Share Capital Account

Dr.

Cr.

Date

Particulars

L.F.

( `)

Date

Particulars

L.F.

( `)

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

Securities Premium Account

Dr.

Cr.

Date

Particulars

L.F.

( `)

Date

Particulars

L.F.

( `)

To Balance c/d

50,000

By Share Allotment

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.	( `)
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		( `)
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

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 ( `)	Credit ( `)

	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.	( `)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	18,000

NOTES TO ACCOUNTS

Note No.

Particulars

( `)

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

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