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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Panasonic Ltd. was formed on 1st April, 2024 with an authorised capital of ₹2,00,000, divided into 2,000 Equity Shares of ₹100 each. 1,000 shares were issued as fully paid to the vendors of a building, in payment of the purchase consideration. The remaining 1,000 shares were offered for public subscription at a premium of ₹5 per share, payable: on application ₹10 per share, on allotment ₹25 per share (including premium), on first call ₹40 per share, on final call ₹30 per share. Applications were received for 900 shares, which were duly allotted, and the allotment money was received in full. At the time of the first call, a shareholder who held 100 shares failed to pay the first call money, and his shares were forfeited. These shares were reissued at ₹60 per share, ₹70 per share paid-up. The final call has not been made. You are required to (i) give the necessary Journal entries to record the above transactions, and (ii) show how Share Capital would appear in the Balance Sheet of the company.
Application ₹10, Allotment ₹25 (₹20 + ₹5 premium), First Call ₹40 — called-up ₹75 (₹70 face value + ₹5 premium); Final Call ₹30 — total ₹105 (₹100 face value + ₹5 premium).
JOURNAL (Books of Panasonic Ltd.)
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Building A/c Dr. | 1,00,000 | |||
| To Vendor A/c | 1,00,000 | |||
| (Building purchased from the vendor) | ||||
| Vendor A/c Dr. | 1,00,000 | |||
| To Equity Share Capital A/c | 1,00,000 | |||
| (1,000 equity shares of ₹100 each issued to the vendor of the building) | ||||
| Bank A/c Dr. | 9,000 | |||
| To Equity Share Application A/c | 9,000 | |||
| (Application money received on 900 shares at ₹10 each) | ||||
| Equity Share Application A/c Dr. | 9,000 | |||
| To Equity Share Capital A/c | 9,000 | |||
| (Application money of 900 shares transferred to Share Capital) | ||||
| Equity Share Allotment A/c Dr. | 22,500 | |||
| To Securities Premium Reserve A/c | 4,500 | |||
| To Equity Share Capital A/c | 18,000 | |||
| (Allotment due on 900 shares at ₹25 each, including ₹5 premium) | ||||
| Bank A/c Dr. | 22,500 | |||
| To Equity Share Allotment A/c | 22,500 | |||
| (Allotment money received on 900 shares) | ||||
| Equity Share First Call A/c Dr. | 36,000 | |||
| To Equity Share Capital A/c | 36,000 | |||
| (First call due on 900 shares at ₹40 each) | ||||
| Bank A/c Dr. | 32,000 | |||
| Calls-in-Arrears A/c Dr. | 4,000 | |||
| To Equity Share First Call A/c | 36,000 | |||
| (First call received on 800 shares; a holder of 100 shares failed to pay) | ||||
| Equity Share Capital A/c Dr. | 7,000 | |||
| To Share Forfeiture A/c | 3,000 | |||
| To Calls-in-Arrears A/c | 4,000 | |||
| (100 shares of ₹100 each, ₹70 called-up, forfeited for non-payment of the ₹40 first call) | ||||
| Bank A/c Dr. | 6,000 | |||
| Share Forfeiture A/c Dr. | 1,000 | |||
| To Equity Share Capital A/c | 7,000 | |||
| (100 shares reissued at ₹60 per share, ₹70 paid-up) | ||||
| Share Forfeiture A/c Dr. | 2,000 | |||
| To Capital Reserve A/c | 2,000 | |||
| (Balance in Share Forfeiture Account after reissue transferred to Capital Reserve) |
As per Schedule III of the Companies Act, 2013, the Balance Sheet is presented as follows:
Panasonic Ltd. Balance Sheet
| Particulars | Note No. | ₹ |
|---|---|---|
| I. Equity and Liabilities | ||
| 1. Shareholders’ Funds | ||
| a. Share Capital | 1 | 1,63,000 |
| b. Reserves and Surplus | 2 | 6,500 |
| Total | 1,69,500 | |
| II. Assets | ||
| 1. Non-Current Assets | ||
| a. Fixed Assets (Tangible) | 3 | 1,00,000 |
| 2. Current Assets | ||
| a. Cash and Cash Equivalents | 4 | 69,500 |
| Total | 1,69,500 |
NOTES TO ACCOUNTS
| Note No. | Particulars | ₹ |
|---|---|---|
| 1 | Share Capital | |
| Authorised: 2,000 Equity Shares of ₹100 each | 2,00,000 | |
| Issued: 2,000 Equity Shares of ₹100 each | 2,00,000 | |
| Subscribed, Called-up and Paid-up: | ||
| 1,000 Equity Shares of ₹100 each (for consideration other than cash) | 1,00,000 | |
| 900 Equity Shares of ₹100 each, ₹70 called-up | 63,000 | |
| Total | 1,63,000 | |
| 2 | Reserves and Surplus | |
| Securities Premium | 4,500 | |
| Capital Reserve | 2,000 | |
| Total | 6,500 | |
| 3 | Tangible Assets — Building | 1,00,000 |
| 4 | Cash and Cash Equivalents — Cash at Bank | 69,500 |
Working Note: Share Forfeiture credit ₹3,000, less ₹1,000 discount on reissue, balance ₹2,000 transferred to Capital Reserve.
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.95 - Share Capital", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 1 - Share Capital.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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