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Chapter 8 . Company Accounts—Accounting for Share Capital 8.29
15. D Ltd. offered to the public 20,000 Equity Shares of ` 10 each payable ` 4 on appli cation, ` 2 on allotment,
` 2 on first call and the balance on final call. Applications totalled for 35,000 shares. Applications for
10,000 shares were rejected. Those totalling 15,000 shares were allotted 10,000 shares and the remaining
applications were accepted in full. Excess application money was utilised towards the money due on
allotment. Both the calls were made. One shareholder holding 500 shares failed to pay the two calls
and as a consequence his shares were forfeited. 200 of these shares were reissued as fully paid-up for as
` 6 per share.
Record the above in the company’s Journal and Cash Book and prepare the Balance Sheet.
[Ans.: Capital Reserve—` 400.]
16. Applications were invited by the Directors of X Ltd. for 15,000 of its Equity Shares of ` 100 and at ` 115 per
share payable as:
(a) On application on 1st April, 2013 (including premium of ` 15 per share) ` 75;
(b) On allotment on 30th April, 2013 ` 20 and
(c) On first and final call on 31st May, 2013 ` 20.
Applications were received for 18,000 shares and it was decided to deal with these as:
(i) to refuse allotment to applicants for 800 shares,
(ii) to give full allotment to applicants for 2,200 shares,
(iii) to allot the remainder of the available shares on pro rata basis among the other applicants and
(iv) to utilise the surplus received on applications in part payment of amounts due on allotment.
An applicant, to whom 400 shares had been allotted, failed to pay the amount due on the first and
final call and his shares were declared forfeited on 31st July, 2013. These shares were reissued on
3rd September, 2013, as fully paid-up @ ` 90 per share.
Pass Journal entries to record the above issue of shares.
[Ans.: Amount transferred to Capital Reserve—` 28,000; Money adjusted
with allotment—` 1,65,000; Ratio of pro rata allotment—75 : 64.]
17. Bharat Tyres Ltd. invited applications for 1,00,000 Equity Shares of ` 10 each issued at a premium of
` 4 per share. The amount was payable as:
On application — ` 6 (including premium ` 2),
On allotment — ` 6 (including premium ` 2),
On first and final call — Balance.
Applications for 1,50,000 shares were received. Allotment was made to all the applicants on pro rata basis.
Subodh, to whom 200 shares were allotted, failed to pay allotment and call money. Vikram, to whom
100 shares were allotted, failed to pay the call money. Their shares were forfeited and afterwards reissued
@ ` 8 per share as fully paid-up.
Pass necessary Journal entries. [Ans.: Capital Reserve—` 1,600.]
18. ABC Ltd. was floated with a capital of ` 3,00,000 divided into shares of ` 10 each. It offered 4,000 shares at
` 12 each, payable ` 2 per share on application, ` 5 per share (including premium) on allotment, ` 3 per
share on first call and ` 2 per share on final call. Applications were received for 6,000 shares. Applicants
for 2,000 shares were sent letters of regret and application money was refunded. All the money due on
shares was received.
Pass necessary Journal entries and the Balance Sheet. [Ans.: Balance Sheet Total—` 48,000.]