T.S. Grewal Class 12 Vol 2 Chapter 1 Q.15 - Share Capital

Question 15

Modern Dairies Ltd. was registered with an authorised capital of ₹10,00,000, divided into 7,500 Equity Shares of ₹100 each and 2,500 9% Preference Shares of ₹100 each. 1,000 Equity Shares and 500 9% Preference Shares were offered to the public: Equity Shares payable ₹10 on application, ₹40 on allotment, and the balance in two calls of ₹25 each; Preference Shares payable ₹25 on application, ₹25 on allotment, and ₹50 on first and final call. All shares were applied for and allotted, and amounts due were duly received. Prepare the Cash Book and the necessary Journal entries, and show how the Share Capital will appear in the Balance Sheet.

Solution

CASH BOOK (Bank Column)

Particulars	₹	Particulars	₹
To Equity Share Application A/c	10,000	By Balance c/d	1,50,000
To Preference Share Application A/c	12,500
To Equity Share Allotment A/c	40,000
To Preference Share Allotment A/c	12,500
To Equity Share First Call A/c	25,000
To Preference Share First and Final Call A/c	25,000
To Equity Share Final Call A/c	25,000
Total	1,50,000	Total	1,50,000

JOURNAL

Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
	Equity Share Application A/c    Dr.		10,000
	To Equity Share Capital A/c			10,000
	Preference Share Application A/c    Dr.		12,500
	To 9% Preference Share Capital A/c			12,500
	Equity Share Allotment A/c    Dr.		40,000
	To Equity Share Capital A/c			40,000
	Preference Share Allotment A/c    Dr.		12,500
	To 9% Preference Share Capital A/c			12,500
	Equity Share First Call A/c    Dr.		25,000
	To Equity Share Capital A/c			25,000
	Preference Share First and Final Call A/c    Dr.		25,000
	To 9% Preference Share Capital A/c			25,000
	Equity Share Final Call A/c    Dr.		25,000
	To Equity Share Capital A/c			25,000

BALANCE SHEET OF MODERN DAIRIES LTD. (Extract)

Particulars	Note No.	₹
Shareholders’ Funds: Share Capital	1	1,50,000
Current Assets: Cash and Cash Equivalents	2	1,50,000

NOTES TO ACCOUNTS

Particulars	₹
1. Share Capital
Authorised: 7,500 Equity Shares of ₹100 each + 2,500 9% Preference Shares of ₹100 each	10,00,000
Issued: 1,000 Equity Shares of ₹100 each + 500 9% Preference Shares of ₹100 each	1,50,000
Subscribed, Called-up and Paid-up: 1,000 Equity Shares + 500 9% Preference Shares of ₹100 each	1,50,000
2. Cash and Cash Equivalents
Cash at Bank	1,50,000