A company invited applications for 50,000 equity shares of Rs. 10 each. Rs 3 on application, 3 on allotment and 4 on first and final call.
Applications were received for 1,10,000 shares. It was decided
(i) to refuse allotment to applicants of 10,000 shares,
(ii)to allot 50% to Mr. X who has applied for 20,000 shares,
(iii)to allot full to Mr. Y who has applied for 10,000 shares,
(iv) to allot balance of available shares on pro rata basis among other applicants,
(v) to utilise excess application money in part payment of allotment and final call. Give journal entries.
Journal | |||||
Date | Particulars |
| L.F. | Debit Amount Rs | Credit Amount Rs |
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| Bank A/c (1,10,000 shares × Rs 3) | Dr. |
| 3,30,000 |
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| To Equity Share Application A/c |
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| 3,30,000 |
| (Share application money received for 1,10,000 shares at Rs 3 each) |
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| Equity Share Application A/c | Dr. |
| 3,30,000 |
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| To Share Capital A/c |
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| 1,50,000 |
| To Share Allotment A/c |
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| 1,20,000 |
| To Share First and Final Call A/c |
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| 30,000 |
| To Bank A/c |
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| 30,000 |
| (Share application money on 50,000 shares transferred to share capital, 10,000 shares money were refunded and the balance adjusted on allotment and final call) |
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| Share Allotment A/c | Dr. |
| 1,50,000 |
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| To Share Capital A/c |
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| 1,50,000 |
| (Allotment money due) |
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| Bank A/c (1,50,000 – 1,20,000) | Dr. |
| 30,000 |
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| To Share Allotment A/c |
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| 30,000 |
| (Share allotment money received after adjustment of excess application money) |
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| Share First and Final Call A/c | Dr. |
| 2,00,000 |
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| To Share Capital A/c |
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| 2,00,000 |
| (Share first and final call due on 80,000 shares at Rs 30 each) |
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| Bank A/c (2,00,000 – 30,000) | Dr. |
| 1,70,000 |
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| To Share First and Final Call A/c |
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| 1,70,000 |
| (Share first and final call received after adjustment of excess application money) |
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Working Note:
Computation Table |
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1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 |
Category | Shares Applied | Shares Allotted | Money Received on application at Rs 3 each | Application Money transferred to Share Capital at Rs 3 each | Excess money received on application | Amount utilised on allotment | Amount utilised on First & Final Call | Bank (Refund) |
I | 10,000 | Nil | 30,000 | - | - | - | - | 30,000 |
II | 20,000 | 10,000 | 60,000 | 30,000 | 30,000 (60,000 – 30,000 | 30,000 (10,000 × 3) | - | - |
III | 10,000 | 10,000 | 30,000 | 30,000 | - | - | - | - |
IV | 70,000 | 30,000 | 2,10,000 | 90,000 | 1,20,000 (2,10,000 – 90,000) | 90,000 (30,000 × 3) | 30,000 |
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Total | 1,10,000 | 50,000 | 3,30,000 | 1,50,000 | 1,50,000 | 1,20,000 | 30,000 | 30,000 |
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