T.S. Grewal Class 12 Vol 2 Chapter 1 Q.26 - Share Capital

Question 26

Printkit Limited invited applications for 80,000 equity shares of ₹10 each, payable ₹3 on application, ₹2 on allotment, and the balance on 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: Category A – applicants for 80,000 shares allotted 40,000 shares; Category B – applicants for 60,000 shares allotted 40,000 shares. Excess money received on application was adjusted towards allotment and first and final call. All amounts due were duly received. Pass the necessary Journal entries. (CBSE 2024)

Solution

JOURNAL (Books of Printkit Limited)

Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
	Bank A/c    Dr.		4,50,000
	To Share Application A/c			4,50,000
	(Application money received on 1,50,000 shares @ ₹3)
	Share Application A/c    Dr.		4,50,000
	To Share Capital A/c			2,40,000
	To Share Allotment A/c			1,40,000
	To Share First and Final Call A/c			40,000
	To Bank A/c			30,000
	(Application money for 80,000 shares transferred to Share Capital; excess adjusted against Allotment and First and Final Call; rejected applications refunded)
	Share Allotment A/c    Dr.		1,60,000
	To Share Capital A/c			1,60,000
	Bank A/c    Dr.		20,000
	To Share Allotment A/c			20,000
	Share First and Final Call A/c (80,000 × ₹5)    Dr.		4,00,000
	To Share Capital A/c			4,00,000
	Bank A/c    Dr.		3,60,000
	To Share First and Final Call A/c			3,60,000

Working Notes: Category A (80,000 applied, 40,000 allotted): application money ₹2,40,000, transferred to capital ₹1,20,000, excess ₹1,20,000 — fully absorbs Allotment due (₹80,000) with ₹40,000 left over, absorbed into the Call. Category B (60,000 applied, 40,000 allotted): application money ₹1,80,000, transferred to capital ₹1,20,000, excess ₹60,000 — partly covers Allotment due (₹80,000), leaving ₹20,000 still payable in cash, nothing left for the Call.