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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
XYZ Ltd. is registered with an authorised capital of ₹2,00,000, divided into 2,000 shares of ₹100 each, of which 1,000 shares were offered for public subscription at a premium of ₹5 per share, payable: on application ₹10 per share, on allotment ₹25 per share (including premium), on first call ₹40 per share, on final call ₹30 per share. Applications were received for 1,800 shares, of which applications for 300 shares were rejected outright; the rest of the applicants were allotted 1,000 shares on a pro-rata basis. Excess application money was transferred to allotment. All the money was duly received except from Sundar, holder of 100 shares, who failed to pay the allotment and first call money. His shares were later forfeited and reissued to Shyam at ₹60 per share, ₹70 paid-up. The final call has not been made. Pass the necessary Journal entries and prepare the Cash Book in the books of XYZ Ltd. (CBSE 2016)
Application ₹10, Allotment ₹25 (₹20 + ₹5 premium), First Call ₹40 — called-up ₹75; Final Call ₹30 — total ₹105 (₹100 + ₹5 premium).
JOURNAL (Books of XYZ Ltd.)
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Bank A/c Dr. | 18,000 | |||
| To Share Application A/c | 18,000 | |||
| (Application money received on 1,800 shares at ₹10 each) | ||||
| Share Application A/c Dr. | 3,000 | |||
| To Bank A/c | 3,000 | |||
| (Application money on 300 rejected shares refunded) | ||||
| Share Application A/c Dr. | 15,000 | |||
| To Share Capital A/c | 10,000 | |||
| To Share Allotment A/c | 5,000 | |||
| (Application money of 1,000 allotted shares transferred to Share Capital; ₹5,000 excess adjusted against Allotment) | ||||
| Share Allotment A/c Dr. | 25,000 | |||
| To Share Capital A/c | 20,000 | |||
| To Securities Premium Reserve A/c | 5,000 | |||
| (Allotment due on 1,000 shares at ₹25 each, including ₹5 premium) | ||||
| Share First Call A/c Dr. | 40,000 | |||
| To Share Capital A/c | 40,000 | |||
| (First call due on 1,000 shares at ₹40 each) | ||||
| Securities Premium Reserve A/c Dr. | 500 | |||
| Share Capital A/c Dr. | 7,000 | |||
| To Share Forfeiture A/c | 1,500 | |||
| To Share Allotment A/c | 2,000 | |||
| To Share First Call A/c | 4,000 | |||
| (100 shares, ₹70 called-up, forfeited for non-payment of allotment and first call) | ||||
| Bank A/c Dr. | 6,000 | |||
| Share Forfeiture A/c Dr. | 1,000 | |||
| To Share Capital A/c | 7,000 | |||
| (100 shares reissued to Shyam at ₹60 per share, ₹70 paid-up) | ||||
| Share Forfeiture A/c Dr. | 500 | |||
| To Capital Reserve A/c | 500 | |||
| (Balance in Share Forfeiture after reissue transferred to Capital Reserve) |
CASH BOOK
| Dr. Particulars | ₹ | Cr. Particulars | ₹ |
|---|---|---|---|
| To Share Application | 18,000 | By Share Application | 3,000 |
| To Share Allotment | 18,000 | By Balance c/d | 75,000 |
| To Share First Call | 36,000 | ||
| To Share Capital | 6,000 | ||
| Total | 78,000 | Total | 78,000 |
Working Notes: Sundar applied for 1,500 × 100 ÷ 1,000 = 150 shares. Money received on application (150 × ₹10) = ₹1,500; retained for his 100 allotted shares (100 × ₹10) = ₹1,000; excess = ₹500. Allotment due (100 × ₹25) = ₹2,500, less excess ₹500 = ₹2,000 unpaid (Calls-in-Arrears on allotment). Capital Reserve = Share Forfeiture credit (₹1,500) less discount on reissue (₹1,000) = ₹500.
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 "T.S. Grewal Class 12 Vol 2 Chapter 1 Q.105 - Share Capital", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 1 - Share Capital.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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