Question 18 Chapter 8 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 18 Chapter 8 of +2- Part

Question 18 Chapter 8 of +2-Part-1

Free Accounting book Solution - Class 11 and Class 12

18. (Expenses on Issue) Hemant Textiles Ltd. having a nominal capital of Rs. 10,00,000 in shares of Rs. 100 each invited applications for 5,000 shares payable as follows :
On application Rs. 20
On allotment Rs. 25
On first call Rs. 25
On second and final call Rs. 30
All the shares were subscribed and allotment made. All the money was received except final call on 100 shares. Expenses of issue came to 10,000. They are to be written off in the same year. Pass journal entries in the books of company.

The solution of Question 18 Chapter 8 of +2 Part-1: –

Journal
Date   Particulars
L.F. Debit Credit
a) Bank A/c (5,000 X 20) Dr.   1,00,000  
  To Share capital A/c       1,00,000
  (Being application money transferred to Share cap. A/c)        
           
b) Share Application A/c Dr.   1,00,000  
  To Share capital A/c (5,000 X 20)       1,00,000
  (Being application money transferred to Share cap. A/c)        
           
c) Share Allotment A/c (5,000 X 25) Dr.   1,25,000  
  To Share capital A/c       1,25,000
  (Being allotment money due on 5,000 share @ 25 as per shares)        
           
d) Bank A/c (5,000 X 25) Dr.   1,25,000  
  To Share allotment A/c       1,25,000
  (Being allotment money received on 5,000 share @ 25 as per shares)        
           
e) Share first Call A/c (5,000 X 25) Dr.   1,25,000  
  To Share capital A/c       1,25,000
  (Being first call money due on 5,000 share @ 25 as per shares)        
           
f) Bank A/c (5,000 X 25) Dr.   1,25,000  
  To Share first Call A/c       1,25,000
  (Being first call money received on 5,000 share @ 25 as per shares)        
           
g) Share second & final Call A/c (5,000 X 30) Dr.   1,50,000  
  To Share capital A/c       1,50,000
  (Being final call money due on 5,000 share @ 30 as per shares)        
           
h) Bank A/c (5,000 X 30) Dr.   1,47,000  
  To Share second & final Call A/c       1,47,000
  (Being second & final call money received on 5,000 share @ 30 as per shares)        
           
i) Share Issue Expense A/c Dr.   10,000  
  To Bank A/c       10,000
  (Being share issue expenses paid )        
           
j) Profit & Loss A/c Dr.   2,000  
  To Share Issue Expense A/c       2,000
  (Being one fifth of the expenses written off )        
         

Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 1 min - Question 18 Chapter 8 of +2 Part-1 - USHA Publication 12 Class Part - 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firm

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