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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Bharat Ltd. was incorporated with a capital of ₹20,00,000 divided into shares of ₹10 each. 20,000 shares were offered for subscription, and of these, 18,000 shares were applied for and allotted. ₹3 per share (including ₹1 premium) was payable on application, ₹4 per share (including ₹1 premium) on allotment, ₹2 per share on first call, and ₹3 per share on final call. All the money was received. Give the necessary Journal entries and show Share Capital in the Balance Sheet.
JOURNAL (Books of Bharat Ltd.)
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Bank A/c Dr. | 54,000 | |||
| To Share Application A/c | 54,000 | |||
| (Application money received on 18,000 shares @ ₹3) | ||||
| Share Application A/c Dr. | 54,000 | |||
| To Share Capital A/c | 36,000 | |||
| To Securities Premium A/c | 18,000 | |||
| (Application money transferred, ₹2 to Share Capital and ₹1 to Securities Premium, per share) | ||||
| Share Allotment A/c Dr. | 72,000 | |||
| To Share Capital A/c | 54,000 | |||
| To Securities Premium A/c | 18,000 | |||
| (Allotment due on 18,000 shares @ ₹4, including ₹1 premium) | ||||
| Bank A/c Dr. | 72,000 | |||
| To Share Allotment A/c | 72,000 | |||
| (Allotment money received) | ||||
| Share First Call A/c Dr. | 36,000 | |||
| To Share Capital A/c | 36,000 | |||
| Bank A/c Dr. | 36,000 | |||
| To Share First Call A/c | 36,000 | |||
| Share Final Call A/c Dr. | 54,000 | |||
| To Share Capital A/c | 54,000 | |||
| Bank A/c Dr. | 54,000 | |||
| To Share Final Call A/c | 54,000 |
BALANCE SHEET OF BHARAT LTD. (Extract)
| Particulars | Note No. | ₹ |
|---|---|---|
| Shareholders’ Funds: Share Capital | 1 | 1,80,000 |
| Reserves and Surplus | 2 | 36,000 |
NOTES TO ACCOUNTS
| Particulars | ₹ |
|---|---|
| 1. Share Capital | |
| Authorised Share Capital: 2,00,000 shares of ₹10 each | 20,00,000 |
| Issued Share Capital: 20,000 shares of ₹10 each | 2,00,000 |
| Subscribed, Called-up and Paid-up: 18,000 shares of ₹10 each | 1,80,000 |
| 2. Reserves and Surplus | |
| Securities Premium Reserve (18,000 × ₹2) | 36,000 |
Note: The company’s total authorised capital of ₹20,00,000 at ₹10 face value corresponds to 2,00,000 shares (not 20,000), and the 20,000 shares offered for subscription total ₹2,00,000 of issued capital; the source’s figures for these two lines were understated by a factor of ten. A Securities Premium Reserve note (₹1 per share on application + ₹1 on allotment = ₹2 × 18,000 shares) is also added, as it was omitted from the source’s Balance Sheet extract.
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.17 - Share Capital", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 1 - Share Capital.
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