Page 33 - DEBK12

Chapter 8 . Company Accounts—Accounting for Share Capital 8.23

Shares Allotment A/c ...Dr. 75,000
To Share Capital A/c 75,000
(Allotment money due)
Shares First and Final Call A/c ...Dr. 75,000
To Share Capital A/c 75,000
(Call money due)
Bank A/c ...Dr. 75,000
To Shares First and Final call A/c 75,000
(Call money received)
Working Note:
Amount Due on Allotment = ` 75,000; Excess Application Money = (50,000 – 25,000) × ` 4 = ` 1,00,000.
Out of excess application money, ` 75,000 is adjusted towards shares allotment and balance ` 25,000 will be
refunded. No amount will be received on allotment.
Case 4. JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)
Bank A/c ...Dr. 2,20,000
To Shares Application A/c 2,20,000
(Application money received)
Shares Application A/c ...Dr. 2,20,000
To Share Capital A/c 1,00,000
To Shares Allotment A/c 75,000
To Bank A/c 45,000
(Application money adjusted)
Shares Allotment A/c ...Dr. 75,000
To Share Capital A/c 75,000
(Allotment money due)
Shares First and Final Call A/c ...Dr. 75,000
To Share Capital A/c 75,000
(Call money due)
Bank A/c ...Dr. 75,000
To Shares First and Final call A/c 75,000
(Call money received)
Working Note:
Amount Due on Allotment = ` 75,000; Excess Application Money = (55,000 – 25,000) × ` 4 = ` 1,20,000.
Out of excess application money, ` 75,000 is adjusted towards shares allotment and balance ` 45,000 will be
refunded. No amount will be received on shares allotment because the entire amount due towards shares
allotment has been already received along with application money.
Illustration 16 (Forfeiture of Shares Issued at Premium—Premium Received).
A Ltd. issued 10,000 Equity Shares of ` 100 each at ` 120 payable as follows:
` 25 on application, ` 45 on allotment (including premium), ` 20 on first call; and ` 30 on
second and final call.
9,000 Equity Shares were applied for and allotted. All the money was received with the
exception of first call and the final call on 200 Equity Shares held by Ram. These Equity Shares
were forfeited.
Pass Journal entries to record the above issue of shares and prepare extract of the Balance Sheet
showing share capital.