Question 23 Chapter 8 of +2-Part-1 – USHA Publication 12 Class Part – 1

Question 23 Chapter 8 of +2-Part-1 - Solution

Question 23 Chapter 8 of +2-Part-1

23. (Oversubscription/ Prorata Allotment) Voltas Ltd. has issued prospectus inviting applications for 43,000 shares of Rs. 20 each payable Rs. 8 on application : Rs. 7 on allotment and Rs. 5 on final call. Applications for 83,000 shares were received. Due to over subscription the allotment was made as follows :

Category  Shares applied  Shares allotted 
1 8,000 8,000
2 12,000 9,000
3 18,000 11,000
4 45,000 15,000
  83,000 43,000

You are required to prepare a statement treatment under the following:

  1. When application money received in excess is not retained.
  2. When application money received in excess is retained for allotment.
  3. When application money received in excess is retained for allotment and call.

The solution of Question 23 Chapter 8 of +2 Part-1: –

Journal
Date   Particulars
L.F. Debit Credit
A) Bank A/c Dr.   6,64,000  
  To Share Application A/c       6,64,000
  (Being application money received on 83,000 share shares @ Rs. 8 per share)      
           
For case (a) (check WN-1)
B) Share Application A/c Dr.   6,64,000  
  To Share capital A/c        3,44,000
  To Bank A/c        3,20,000
  (Being the application money transferred to share capital A/c & excess refunded )      
           
For case (b) (check WN-2)
B) Share Application A/c Dr.   6,64,000  
  To Share capital A/c       3,44,000
  To Share Allotment A/c        1,85,000
  To Bank A/c        1,35,000
  (Being application money adjusted as per board resolution )      
           
For case (c) (check WN-3)
B) Share Application A/c Dr.   6,64,000  
  To Share capital A/c       3,44,000
  To Share Allotment A/c        1,85,000
  To Calls in advance A/c        75,000
  To Bank A/c        60,000
  (Being application money adjusted as per board resolution )      
         

Working notes of Question 23 Chapter 8 of +2-Part-1:

WN-1 – When application money received in excess is not retained.

Categories Shares Applied Shares Allotted App. Money Received App. Due Balance Refund
      Rs. Rs. Rs. Rs.
1 8,000 8,000 64,000 64,000
2 12,000 9,000 96,000 72,000 24,000 24,000
3 18,000 11,000 1,44,000 88,000 56,000 56,000
4 45,000 15,000 3,60,000 1,20,000 2,40,000 2,40,000
Total 83,000 43,000 6,64,000 3,44,000 3,20,000 3,20,000

WN-2 – When application money received in excess is retained for allotment.

Categories Shares Applied Shares Allotted App. Money Received App. Due Balance Allotment Money Adjusted Refund
      Rs. Rs. Rs. Rs. Rs.
1 8,000 8,000 64,000 64,000  
2 12,000 9,000 96,000 72,000 24,000 24,000
3 18,000 11,000 1,44,000 88,000 56,000 56,000
4 45,000 15,000 3,60,000 1,20,000 2,40,000 1,05,000 1,35,000
Total 83,000 43,000 6,64,000 3,44,000 3,20,000 1,85,000 1,35,000

WN-3 – When application money received in excess is retained for allotment and call.

Categories Shares Applied Shares Allotted App. Money Received App. Due Balance Allotment Money Adjusted Call Adjustments Refund
      Rs. Rs. Rs. Rs. Rs. Rs.
1 8,000 8,000 64,000 64,000    
2 12,000 9,000 96,000 72,000 24,000 24,000  
3 18,000 11,000 1,44,000 88,000 56,000 56,000  
4 45,000 15,000 3,60,000 1,20,000 2,40,000 1,05,000 75,000 60,000
Total 83,000 43,000 6,64,000 3,44,000 3,20,000 1,85,000 75,000 60,000

It all about Question 23 Chapter 8 of +2-Part-1, If you have any problem please comment below.

You can also Check out the solved question of other 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 23 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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