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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Alok Ltd. invited applications for 1,00,000 Equity Shares of ₹10 each. The shares were issued at a premium of ₹5 per share. The amount was payable as follows: on Application and Allotment ₹8 per share (including premium ₹3); the balance, including premium, on the First and Final Call. Applications for 1,50,000 shares were received. Applications for 10,000 shares were rejected, and pro-rata allotment was made to the remaining applicants on the following basis: (i) applications for 80,000 shares were allotted 60,000 shares; and (ii) applications for 60,000 shares were allotted 40,000 shares. Mohan, who belonged to the first category and was allotted 300 shares, failed to pay the first and final call money. Sohan, who belonged to the second category and was allotted 200 shares, also failed to pay the call money; their shares were forfeited. The forfeited shares were reissued at ₹12 per share, fully paid-up. Prepare the Cash Book and pass the necessary Journal entries.
Application and Allotment ₹8 (₹5 + ₹3 premium); First and Final Call ₹7 (₹5 + ₹2 premium).
JOURNAL (Books of Alok Ltd.)
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Share Application and Allotment A/c Dr. | 12,00,000 | |||
| To Share Capital A/c (1,00,000 × ₹5) | 5,00,000 | |||
| To Securities Premium Reserve A/c (1,00,000 × ₹3) | 3,00,000 | |||
| To Share First and Final Call A/c | 3,20,000 | |||
| To Bank A/c (10,000 × ₹8) | 80,000 | |||
| (Application and allotment money for 1,00,000 shares transferred to Share Capital and Securities Premium; excess adjusted against the call; rejected applications refunded) | ||||
| Share First and Final Call A/c Dr. | 7,00,000 | |||
| To Share Capital A/c (1,00,000 × ₹5) | 5,00,000 | |||
| To Securities Premium Reserve A/c (1,00,000 × ₹2) | 2,00,000 | |||
| (First and final call due on 1,00,000 shares) | ||||
| Share Capital A/c Dr. | 5,000 | |||
| Securities Premium Reserve A/c Dr. | 1,000 | |||
| To Share First and Final Call A/c | 1,900 | |||
| To Share Forfeiture A/c | 4,100 | |||
| (500 shares of Mohan and Sohan forfeited for non-payment of the first and final call money) | ||||
| Bank A/c (500 × ₹12) Dr. | 6,000 | |||
| To Share Capital A/c (500 × ₹10) | 5,000 | |||
| To Securities Premium Reserve A/c (500 × ₹2) | 1,000 | |||
| (500 forfeited shares reissued at ₹12 per share, fully paid-up) | ||||
| Share Forfeiture A/c Dr. | 4,100 | |||
| To Capital Reserve A/c | 4,100 | |||
| (Balance in Share Forfeiture Account transferred to Capital Reserve, since reissued above par) |
CASH BOOK (Bank Column Only)
| Dr. Particulars | ₹ | Cr. Particulars | ₹ |
|---|---|---|---|
| To Share Application and Allotment A/c | 12,00,000 | By Share Application and Allotment A/c | 80,000 |
| To Share First and Final Call A/c | 3,78,100 | By Balance c/d | 15,04,100 |
| To Share Capital A/c | 5,000 | ||
| To Securities Premium Reserve A/c | 1,000 | ||
| Total | 15,84,100 | Total | 15,84,100 |
Working Notes: Mohan applied for 400 shares (allotted 300, category (i) ratio 60,000:80,000 = 3:4); Sohan applied for 300 shares (allotted 200, category (ii) ratio 40,000:60,000 = 2:3). Their combined excess application money already adjusted toward the call = ₹1,600. Amount due on the call for their 500 shares (500 × ₹7) = ₹3,500, less the ₹1,600 excess = ₹1,900 still unpaid. Amount received on First and Final Call overall = 7,00,000 − 3,20,000 (already adjusted) − 1,900 (Mohan and Sohan’s shortfall) = ₹3,78,100.
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.107 - Share Capital", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 1 - Share Capital.
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