Srijan Limited issued ₹10,00,000 new capital divided into 100 shares at a premium of
20 per share, payable as under:
On Application : ₹10 per share
On Allotment : ₹40 per share (including ₹10 premium)
On First and Final Call : Balance
Overpayments on applications were to be applied towards sums due on allotment and
first and final call. Where no allotment was made, money was to be refunded in full. The
issue was oversubscribed to the extent of 13,000 shares. Applicants for 12,000 shares
were allotted only 2,000 shares and applicants for 3,000 shares were sent letters of regret
and application money was returned to them. All the money due was duly received.
Compute the amount transferred to share capital a/c, share allotment a/c, share call a/c,
and total amt refunded. Also pass the journal entry for the same.
Srijan Ltd.
| Journal | |||||
| Date | Particulars |
| L.F. | Debit Amount Rs | Credit Amount Rs |
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| Bank A/c (23,000 shares × Rs 10) | Dr. |
| 2,30,000 |
|
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| To Equity Share Application A/c |
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| 2,30,000 |
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| (Share application money received for 23,000 shares at Rs 10 each) |
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|
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| Equity Share Application A/c | Dr. |
| 2,30,000 |
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|
| To Share Capital A/c |
|
|
| 1,00,000 |
|
| To Share Allotment A/c |
|
|
| 80,000 |
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| To Share First and Final Call A/c |
|
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| 20,000 |
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| To Bank A/c |
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| 30,000 |
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| (Share application money on 10,000 shares transferred to share capital, 3,000 shares money were refunded and the balance adjusted on allotment and first & final call) |
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| Share Allotment A/c | Dr. |
| 4,00,000 |
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| To Securities Premium A/c |
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| 1,00,000 |
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| To Share Capital A/c |
|
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| 3,00,000 |
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| (Allotment money due) |
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| Bank A/c (4,00,000 – 80,000) | Dr. |
| 3,20,000 |
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| To Share Allotment A/c |
|
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| 3,20,000 |
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| (Share allotment money received after adjustment of excess application money) |
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| 7,00,000 |
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| Share First and Final Call A/c | Dr. |
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| 1,00,000 |
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| To Securities Premium A/c |
|
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| 6,00,000 |
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| To Share Capital A/c |
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| (Share first and final call due) |
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| Bank A/c (7,00,000 – 20,000) | Dr. |
| 6,80,000 |
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| To Share First and Final Call A/c |
|
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| 6,80,000 |
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| (Share first and final call received after adjustment of excess application money) |
|
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Thus the amount transferred to share capital A/c = 100000 + 300000 + 600000 = 1000000
Share allotment a/c = 400000
Share final A/c = 700000
total amount refunded = 3000 x 10 = 30000
Working Note:
| Computation Table | ||||||||
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 |
| Category | Shares Applied | Shares Allotted | Money Received on application at Rs 10 each | Application Money transferred to Share Capital at Rs 10 each | Excess money received on application | Amount utilised on allotment at Rs 40 each | Amount utilised on First & Final Call | Bank (Refund) |
| I | 12,000 | 2,000 | 1,20,000 | 20,000 | 1,00,000 (1,20,000 – 20,000) | 80,000 (2,000 × 40) | 20,000 (1,00,000 – 80,000) |
|
| II | 3,000 | Nil | 30,000 |
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| 30,000 |
| III | 8,000 | 8,000 | 80,000 | 80,000 |
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| Total | 23,000 | 10,000 | 2,30,000 | 1,00,000 | 1,00,000 | 80,000 | 20,000 | 30,000 |
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Regards