T.S. Grewal Class 12 Vol 2 Chapter 1 Q.35 - Share Capital

Question 35

Avon Ltd. issued for subscription 10,000 shares of ₹25 each, payable ₹5 per share on application, ₹10 per share on allotment (including ₹5 premium), ₹5 per share as first call, and the balance in two equal instalments at intervals of three months. All shares were applied for and allotted. The due amount was received except the second call on 200 shares and the final call on 400 shares. Pass the entries in the Journal, Cash Book and Ledger, and show the Balance Sheet.

Solution

JOURNAL (Books of Avon Ltd.)

Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
	Bank A/c (10,000 × ₹5)    Dr.		50,000
	To Share Application A/c			50,000
	Share Application A/c    Dr.		50,000
	To Share Capital A/c			50,000
	Share Allotment A/c (10,000 × ₹10)    Dr.		1,00,000
	To Share Capital A/c (10,000 × ₹5)			50,000
	To Securities Premium Reserve A/c (10,000 × ₹5)			50,000
	Bank A/c    Dr.		1,00,000
	To Share Allotment A/c			1,00,000
	Share First Call A/c (10,000 × ₹5)    Dr.		50,000
	To Share Capital A/c			50,000
	Bank A/c    Dr.		50,000
	To Share First Call A/c			50,000
	Share Second Call A/c (10,000 × ₹5)    Dr.		50,000
	To Share Capital A/c			50,000
	Bank A/c (9,800 × ₹5)    Dr.		49,000
	Calls-in-Arrears A/c (200 × ₹5)    Dr.		1,000
	To Share Second Call A/c			50,000
	Share Third and Final Call A/c (10,000 × ₹5)    Dr.		50,000
	To Share Capital A/c			50,000
	Bank A/c (9,600 × ₹5)    Dr.		48,000
	Calls-in-Arrears A/c (400 × ₹5)    Dr.		2,000
	To Share Third and Final Call A/c			50,000

CASH BOOK

Particulars	₹	Particulars	₹
To Share Application A/c	50,000	By Balance c/d	2,97,000
To Share Allotment A/c	1,00,000
To Share First Call A/c	50,000
To Share Second Call A/c	49,000
To Share Third and Final Call A/c	48,000
Total	2,97,000	Total	2,97,000

BALANCE SHEET OF AVON LTD. (Extract)

Particulars	Note No.	₹
1. Shareholders’ Funds: Share Capital	1	2,47,000
Reserves and Surplus	2	50,000
Total		2,97,000
2. Current Assets: Cash and Cash Equivalents	3	2,97,000

NOTES TO ACCOUNTS

Particulars	₹
1. Share Capital
Issued Share Capital: 10,000 Equity Shares of ₹25 each	2,50,000
Subscribed and Fully Paid-up: 9,400 Equity Shares of ₹25 each	2,35,000
Subscribed but not Fully Paid-up: 600 Equity Shares of ₹25 each	15,000
Less: Calls-in-Arrears (200 × ₹5) + (400 × ₹5)	(3,000)
Net	12,000
Total Share Capital	2,47,000
2. Reserves and Surplus
Securities Premium Reserve (10,000 × ₹5)	50,000
3. Cash and Cash Equivalents
Bank	2,97,000