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Question 18 Chapter 8 of +2-Part-1
18. (Expenses on Issue) Hemant Textiles Ltd. having a nominal capital of Rs. 10,00,000 in shares of Rs. 100 each invited applications for 5,000 shares payable as follows :
On application Rs. 20
On allotment Rs. 25
On first call Rs. 25
On second and final call Rs. 30
All the shares were subscribed and allotment made. All the money was received except final call on 100 shares. Expenses of issue came to 10,000. They are to be written off in the same year. Pass journal entries in the books of company.
Journal
| Date | Particulars |
L.F. | Debit | Credit | |
|---|---|---|---|---|---|
| a) | Bank A/c (5,000 X 20) | Dr. | 1,00,000 | ||
| To Share Application A/c | 1,00,000 | ||||
| (Being application money received) | |||||
| b) | Share Application A/c | Dr. | 1,00,000 | ||
| To Share capital A/c (5,000 X 20) | 1,00,000 | ||||
| (Being application money transferred to Share cap. A/c) | |||||
| c) | Share Allotment A/c (5,000 X 25) | Dr. | 1,25,000 | ||
| To Share capital A/c | 1,25,000 | ||||
| (Being allotment money due on 5,000 share @ 25 per shares) | |||||
| d) | Bank A/c (5,000 X 25) | Dr. | 1,25,000 | ||
| To Share allotment A/c | 1,25,000 | ||||
| (Being allotment money received on 5,000 share @ 25 as per shares) | |||||
| e) | Share first Call A/c (5,000 X 25) | Dr. | 1,25,000 | ||
| To Share capital A/c | 1,25,000 | ||||
| (Being first call money due on 5,000 share @ 25 per shares) | |||||
| f) | Bank A/c (5,000 X 25) | Dr. | 1,25,000 | ||
| To Share first Call A/c | 1,25,000 | ||||
| (Being first call money received on 5,000 share @ 25 per shares) | |||||
| g) | Share second & final Call A/c (5,000 X 30) | Dr. | 1,50,000 | ||
| To Share capital A/c | 1,50,000 | ||||
| (Being final call money due on 5,000 share @ 30 per shares) | |||||
| h) | Bank A/c (5,000 X 30) | Dr. | 1,47,000 | ||
| Calls in arrear A/c | Dr. | 3,000 | |||
| To Share second & final Call A/c | 1,47,000 | ||||
| (Being second & final call money received on 5,000 share @ 30 per shares) | |||||
| i) | Share Issue Expense A/c | Dr. | 10,000 | ||
| To Bank A/c | 10,000 | ||||
| (Being share issue expenses paid ) | |||||
| j) | Profit & Loss A/c | Dr. | 2,000 | ||
| To Share Issue Expense A/c | 2,000 | ||||
| (Being one fifth of the expenses written off ) | |||||
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "Question 18 Chapter 8 of +2 Part-1 - USHA Publication 12 Class Part - 1", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to USHA Publication +2 Part 1.
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