Question 109:
XYZ Ltd. issued a prospectus inviting applications for 2,000
shares of ` 10 each at a premium of ` 4 per share , payable as:
|
On application |
-- |
` 6 (including `
1 premium) |
|
On allotment |
-- |
` 2 (including `
1 premium) |
|
On first call |
-- |
` 3 (including `
1 premium) |
|
On second and final call |
-- |
` 3 (including `
1 premium) |
Applications were received for 3,000 shares and pro rata allotment was
made on the applications for 2,400 shares. It was decided to utilise
excess application money towards the amount due on allotment.
X, to whom 40 shares were allotted, failed to pay the allotment money
and on his subsequent failure to pay the first call, his shares were forfeited.
Y, who applied for 72 shares failed to pay the two calls and on his such
failure, his shares were forfeited.
Of the shares forfeited, 80 shares were
sold to Z credited as fully paid-up for ` 9 per share , the whole of Y's shares being included . Prepare
Journal, Cash Book and the Balance Sheet.
Answer:
Applied shares 3,000
|
Allotment
made as: |
|
Payable as: |
|
|||
|
Applied |
|
Allotted |
|
Application |
` 6 |
(5 + 1) |
|
2,400 |
|
2,000 |
|
Allotment |
` 2 |
(1 + 1) |
|
600 |
|
NIL |
|
First Call |
` 3 |
(2 + 1) |
|
|
|
|
|
Final Call |
` 3 |
(2 + 1) |
|
3,000 |
|
2,000 |
|
|
` 14 |
(10 + 4) per share |
|
Cash
Book |
|||||
|
Dr. |
|
|
|
|
Cr. |
|
Date |
Particulars |
Bank ` |
Date |
Particulars |
Bank ` |
|
|
|
|
|
|
|
|
|
Share Application |
18,000 |
|
Share Application |
3,600 |
|
|
(3,000 shares × ` 6) |
|
|
(600 shares × ` 6) |
|
|
|
Share Allotment (see note-2) |
1,568 |
|
|
|
|
|
Share First Call (see note-4) |
5,700 |
|
|
|
|
|
Share Final Call (see note-5) |
5,700 |
|
|
|
|
|
Share Capital |
720 |
|
Balance c/d |
28,088 |
|
|
(80 shares × ` 9) |
|
|
|
|
|
|
|
31,688 |
|
|
31,688 |
|
|
|
|
|
|
|
|
Journal
Entries |
|||||
|
Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
|
|
|
|
|
|
|
|
|
|
Share Application A/c |
Dr. |
|
14,400 |
|
|
|
To Share Capital A/c |
|
|
10,000 |
|
|
|
To Securities Premium A/c |
|
|
2,000 |
|
|
|
To Share Allotment A/c |
|
|
2,400 |
|
|
|
(Share application money of 2,000 shares transferred to Share Capital
and Securities Premium at `
5 and Re 1 each respectively and `
2,400 adjusted on allotment) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Allotment A/c |
Dr. |
|
4,000 |
|
|
|
To Share Capital A/c |
|
|
2,000 |
|
|
|
To Securities Premium A/c |
|
|
2,000 |
|
|
|
(Allotment due on 2,000 shares at ` 2 each including Re 1 premium) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share First Call A/c |
Dr. |
|
6,000 |
|
|
|
To Share Capital A/c |
|
|
4,000 |
|
|
|
To Securities Premium A/c |
|
|
2,000 |
|
|
|
(First call due on 2,000 shares at
` 3 each including Re 1 premium) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Capital A/c (40 shares × ` 8) |
Dr. |
|
320 |
|
|
|
Securities Premium A/c |
Dr. |
|
72 |
|
|
|
To Share Forfeiture A/c |
|
|
240 |
|
|
|
To Share Allotment A/c |
|
|
32 |
|
|
|
To Share First Call A/c |
|
|
120 |
|
|
|
(40 shares of `
10 each ` 8 called with premium forfeited for non-payment of amount due) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Final Call A/c |
Dr. |
|
5,880 |
|
|
|
To Share Capital A/c |
|
|
3,920 |
|
|
|
To Securities Premium A/c |
|
|
1,960 |
|
|
|
(Final call due on 1,960 shares at
` 3 each including Re 1 premium) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Capital A/c |
Dr. |
|
600 |
|
|
|
Securities Premium A/c |
Dr. |
|
120 |
|
|
|
To Share Forfeiture A/c |
|
|
360 |
|
|
|
To Share First Call A/c |
|
|
360 |
|
|
|
(60 shares forfeited for
non-payment of amount due) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
720 |
|
|
|
Share Forfeiture A/c |
Dr. |
|
80 |
|
|
|
To Shares Capital A/c |
|
|
800 |
|
|
|
(80 shares of `
10 each re-issued at ` 9 per share fully paid-up) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Forfeiture A/c |
Dr. |
|
400 |
|
|
|
To Capital Reserve |
|
|
400 |
|
|
|
(Balance of 80 reissued shares in Share Forfeiture
Account transferred to Capital Reserve) |
|
|
|
|
|
|
|
|
|
|
|
As per the Schedule III of
Companies Act, 2013, the Company's
Balance Sheet is presented as follows.
|
XYZ
Ltd. |
||
|
Balance
Sheet |
||
|
Particulars |
Note
No. |
(`) |
|
I. Equity and Liabilities |
|
|
|
1. Shareholders’ Funds |
|
|
|
a. Share Capital |
1 |
19,920 |
|
b. Reserves and Surplus |
2 |
8,168 |
|
2. Non-Current Liabilities |
|
|
|
3. Current Liabilities |
|
|
|
Total |
|
28,088 |
|
|
|
|
|
II. Assets |
|
|
|
1. Non-Current Assets |
|
|
|
2. Current Assets |
|
|
|
a. Cash and Cash Equivalents |
3 |
28,088 |
|
Total |
|
28,088 |
NOTES TO ACCOUNTS
|
|
|||
|
Note
No. |
Particulars |
(`) |
|
|
1 |
Share Capital |
|
|
|
|
Authorised Share Capital |
|
|
|
|
……. shares of ` 10 each |
- |
|
|
|
Issued Share Capital |
|
|
|
|
2,000 shares of `
10 each |
20,000 |
|
|
|
Subscribed, Called-up and Paid-up Share Capital |
|
|
|
|
1,980 shares of ` 10 each |
19,800 |
|
|
|
Add: Shares Forfeited (20 shares × ` 6) |
120 |
19,920 |
|
|
|
|
|
|
2 |
Reserves and Surplus |
|
|
|
|
Securities Premium |
7,768 |
|
|
|
Capital Reserve |
400 |
8,168 |
|
|
|
|
|
|
3 |
Cash and Cash Equivalents |
|
|
|
|
Cash at Bank |
28,088 |
|
|
|
|
|
|
Working Notes:
1. X’s Shares
Number of share applied by X =2,400/2,000×40=48 Shares
|
Money received on application (48
shares × ` 6) |
= |
288 |
|
Less:
Money transferred to Shares Capital (40 shares × ` 5) |
= |
200 |
|
Less:
Securities Premium (40 shares × Re 1) |
= |
40 |
|
Excess money on application from X |
= |
48 |
|
Utilisation of excess application money received from X |
|
|
|
Share Capital due on Allotment (40
shares × Re 1) |
= |
40 |
|
Less: Excess money on Application from X |
= |
48 |
|
Excess money after adjustment of Share Capital on Allotment |
= |
8 |
|
|
|
|
|
Securities Premium due on
Allotment (40 shares × Re 1) |
= |
40 |
|
Less: Excess money after adjustment of Share Capital on Allotment |
= |
8 |
|
Calls-in-Arrears of Securities Premium on Allotment |
= |
32 |
2. Share Allotment
|
Money due on allotment (2,000
shares × ` 2) |
= |
4,000 |
|
Less:
Excess money on Application |
= |
2,400 |
|
|
= |
1,600 |
|
Less:
Calls-in-Arrears on X‘s shares (securities premium) |
= |
32 |
|
Money received on allotment |
= |
`
1,568 |
3. Y’s Shares
Number of shares allotted =2,000/2,400×72= 60 shares
4. Share First Call
|
Money due on Share First Call
(2,000 shares × ` 3) |
= |
6,000 |
|
Less:
Calls-in-Arrears on X‘s shares (40 shares × ` 3) |
= |
120 |
|
Less:
Calls-in-Arrears on Y’s shares (60 shares × ` 3) |
= |
180 |
|
Money received on Share First Call |
= |
5,700 |
5. Share Final Call
|
Money due on share Final Call
(1,960 shares × ` 3) |
= |
5,880 |
|
Less:
Calls-in-Arrears on Y’s shares (60 shares × ` 3) |
= |
180 |
|
Money received on Share Final Call |
= |
5,700 |
Capital Reserve
X’s shares
|
Money received from X for 40
shares |
= |
288 |
|
Less:
Securities Premium adjusted on Application |
= |
40 |
|
Less:
Securities Premium adjusted on Allotment |
= |
8 |
|
Balance in the Share
Forfeiture before re-issue of shares Cr. |
|
240 |
|
Share Forfeiture Credit=240/40 |
= |
` |
6 |
per share |
|
Share forfeiture Debit |
= |
` |
1 |
per share |
|
|
|
` |
5 |
per share |
Capital Reserve on re-issue of 20 shares = `
5 × 20 shares = ` 100
Y’s Shares
Share Forfeiture on 60 Shares of Y
|
Share Forfeiture Credit |
` 6 |
per share |
|
Less:
Share Forfeiture Debit |
` 1 |
per share |
|
|
` 5 |
per share |
Capital Reserve on re-issue of 60 shares of Y = `5
× 60 shares = ` 300
Total Capital Reserve on 80 shares =
Capital Reserve on re-issue of 20 shares of X + Capital Reserve on re-issue of 60 shares of Y = 100 + 300 = `400
Question 110:
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.
(NCERT,
Modified)
Answer:
|
Books
of Eastern Company Limited |
|||||
|
Date |
Particulars |
L.F. |
Debit (`) |
Credit (`) |
|
|
|
Bank A/c
To Share Application a/c (share application
money received) |
Dr. |
|
1,80,000 |
1,80,000 |
|
|
Share
Application A/c |
Dr. |
|
1,80,000 |
|
|
|
To Share Capital A/c |
|
|
1,50,000 |
|
|
|
To Share Allotment A/c
To Bank A/c |
|
|
27,000 3,000 |
|
|
|
(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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c
(2,50,000-27,000) Dr. To Share
Allotment A/c (Share
allotment money received) |
|
2,23,000 |
2,23,000 |
|
|
|
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) |
|
|
|
|
|
|
Bank A/c (1,50,000-[100×3]) To Share First Call A/c (Amount received on first call
except 100 shares) |
Dr. |
|
1,49,700 |
1,49,700 |
|
Cash Book (Bank Column) |
|||||||
|
Dr. |
|
|
|
|
|
|
Cr. |
|
Date |
Particulars |
J.F. |
(`) |
Date |
Particulars |
J.F. |
(`) |
|
|
Share
Application |
|
1,80,000 |
|
Share
Application |
|
3,000 |
|
|
Share
Allotment |
|
2,23,000 |
|
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. |
(`) |
|
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 |
(`) |
|
|
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 |
|
Table Adjusting Application money
|
Shares
allotted |
Shares
applied |
Application
money receive |
Share
Capital |
Share
Allotment |
Refund |
|
40,000 |
40,000 |
1,20,000 |
1,20,000 |
- |
- |
|
15,000 |
8,000 |
45,000 |
24,000 |
21,000 |
- |
|
5,000 |
2,000 |
15,000 |
6,000 |
6,000 |
3,000 |
|
60,000 |
50,000 |
1,80,000 |
1,50,000 |
27,000 |
3,000 |
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