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Question 29:

Home Products Ltd. is registered with authorised capital of ₹10,00,000 divided into 1,00,000 equity shares of ₹10 each. It issued 70,000 Equity Shares for subscription at premium of ₹2 per share, payable ₹3 on application, ₹5 on allotment and balance on first and final call. It received subscription for 62,500 shares.

You are required to pass the necessary Journal entries.

Answer:

Books of Home Product Ltd. Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)

	Bank A/c (62,500×3)	Dr.		1,87,500
	To Share Application A/c				1,87,500
	(Share application money received)

	Share Application A/c	Dr.		1,87,500
	To Bank A/c				1,87,500
	(Share application money refunded due to less than minimum subscription)

Working Notes:

Issue subscribed 62,500 by public is less than minimum subscription, which 90%

Therefore, it should be minimum 63,000 shares.

Application money will be refunded.

Question 30:

Quality Stationers Ltd. registered with authorised capital of ₹20,00.000 divided into 1,00,000 equity shares of ₹20 each. 50,000 Equity Shares were issued for subscription at par, issue price being payable along with application. It received application money of ₹4,40,000.

You are required to pass the necessary Journal entries and show share capital in the Balance Sheet of the company.

Answer:

Issued 50,000 and Subscribed Capital 22,000 shares of ₹20 each
Payable as: ₹20 on application

Books of Quality Stationers Ltd. Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)

	Bank A/c	Dr.		4,40,000
	To Share Application A/c				4,40,000
	(Share application money received for 22,000 shares at₹20 per share)

	Share Application A/c	Dr.		4,40,000
	To Share Capital A/c				4,40,000
	(Share application money received for 22,000 shares at₹20 per share)

Balance Sheet of Books of Quality Stationers Ltd.
Particulars	Note No.	(₹)
I. Equity and Liabilities
1. Shareholders’ Funds
Share Capital		4,40,000
Total		4,40,000

Notes to Accounts
Particulars	(₹)
*Share Capital*
Authorised Share Capital
1,00,000 Equity Shares of ₹20 each	20,00,000
	20,00,000
*Issued Share Capita*l
50,000 Equity Shares of ₹20 each	10,00,000
	10,00,000
*Subscribed Share Capital*
Subscribed and Fully Paid-up Share Capital
22,000 Equity Shares of ₹20 each	4,40,000
	4,40,000

Question 31:

Pure Products Ltd. is registered with authorised capital of ₹10,00,000 divided into 1,00,000 equity shares of ₹10 each. It issued 70,000 Equity Shares for subscription at premium of ₹2 per share, payable ₹3 on application, ₹5 on allotment and balance on first and final call. It received application money amounting to ₹1,89,000.

You are required to:

(i) Determine whether the company should allot shares; and

(ii) If yes, pass the necessary Journal entries assuming that the company has received due amount on allotment and call.

Answer:

1. Yes, Company can allot share, since minimum 90% subscription has been received that is 63,000 of 70,000 shares issued,

Books of Pure Product Ltd. Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)

	Bank A/c (63,000×3)	Dr.		1,89,000
	To Share Application A/c				1,89,000
	(Share application money received for 63,000 shares at₹3 per share)

	Share Application A/c	Dr.		1,89,000
	To Share Capital A/c				1,89,000
	(Share application Money transferred to Share Capital)

	Share Allotment A/c (63,000×5)	Dr.		3,15,000
	To Share Capital A/c (63,000×3)				1,89,000
	To Securities Premium Reserves A/c (63,000×2)				1,26,000
	(Share allotment due on 63,000 shares at₹3 with premium of ₹2 per share)

	Bank A/c	Dr.		3,15,000
	To Share Allotment A/c				3,00000
	(Share allotment money received)

	Share First Call A/c (63,000×5)	Dr.		3,15,000
	To Share Capital A/c				3,15,000
	(Share first call due on 63,000 shares at₹5 per share)

	Bank A/c (63,000×5)	Dr.		3,15,000
	To Share First and Final call A/c				3,15,000
	(Share first call received on 63,000 shares at₹5 per share)

Question 32:

Blue chip Ltd. was registered on 1st January, 2024 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 and Cash Book entries and prepare the Balance Sheet as at 30th June, 2024.

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 ₹
2024				2024
Feb 01	Share Application		40,000	June 30
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 ₹	Credit ₹
2024
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.	(₹)
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		(₹)
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

Ts Grewal Solution 2025-2026

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Class 12 / Volume – 2

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Chapter 9- Company Accounts- Accounting for Share Capital