Shakti Ltd. invited applications for issuing 1,00,000 equity shares of Rs.10 each. The amount was payable as follows:
On application-Rs.3 per share
On allotment-Rs.2 per share
On First and Final Call-Rs.5 per share.
Applications were received for 2,20,000 shares. Applications for 20,000 shares were rejected and their application money was refunded. Shares were alloted to the remaining applicants as follows:
(i) Alloted 50% shares to Raman who had applied for 40,000 shares.
(ii) To allot in full to Akbar who had applied for 20,000 shares.
(iii) To allot balance of shares in pro-rata basis to the other applicants.
Excess apllication money was utilized in payment of allotment and final call. All calls were made and were duly received except the first and final call in 600 shares alloted to an applicant in (iii) category. His shares were forfeited.
The forfeited shares were re-issued for Rs.9 per share fully paid up.
| Journal Entry | ||||||
| Date | Particulars | L.F. | Debit Amount Rs |
Credit Amount Rs |
||
| Bank A/c | Dr. | 6,60,000 | ||||
| To Share Application A/c | 6,60,000 | |||||
| (Share Application is received on 2,20,000 shares of Rs 3 each) | ||||||
| Share Application A/c | Dr. | 6,60,000 | ||||
| To Share Capital A/c | 3,00,000 | |||||
| To Share Allotment A/c | 2,00,000 | |||||
| To Share First and Final Call A/c | 1,00,000 | |||||
| To Bank A/c | 60,000 | |||||
| (Share Application is transferred to Share Capital A/c is excess application money received adjusted on Share Allotment and Share First and Share Final Call) | ||||||
| Share Allotment A/c | Dr. | 2,00,000 | ||||
| To Share Capital A/c | 2,00,000 | |||||
| (Share Allotment is due on 1,00,000 shares of Rs 2 each) | ||||||
| Share First and Final Call A/c | Dr. | 5,00,000 | ||||
| To Share Capital A/c | 5,00,000 | |||||
| (Share First and Final Call is due on 1,00,000 shares of Rs 5 each) | ||||||
| Bank A/c | Dr. | 4,00,000 | ||||
| To Share First and Final Call A/c | 4,00,000 | |||||
| (Share First and Final Call received) | ||||||
Working Notes:
Share Application received on 2,20,000 shares of Rs 3 each = Rs 6,60,000
Money refunded on 20,000 shares of Rs 3 each = Rs 60,000
Shares Allotted (1,00,000*3) = Rs 3,00,000
Excess Application money received = Rs 3,00,000 (Rs 6,60,000-Rs 60,000-Rs 3,00,000)
Share Allotment is due on 1,00,000 shares of Rs 2 each = Rs 2,00,000
Excess Application money to be adjussed = Rs 2,00,000
Amount to be received on Allotment = Nil
Share First and Final call is due on 1,00,000 shares of Rs 5 each = Rs 5,00,000
Excess Application to be adjusted = Rs 1,00,000
Amount to be received on share First and final Call = Rs 4,00,000 (Rs 5,00,000-Rs 1,00,000)
Entry of Share Allotment received (Rs 2,00,000) has not been passed because the whole amount due on it, has been adjusted towards excess application money received on Share Application.