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Question 24 Chapter 8 of +2-Part-1 – USHA Publication 12 Class Part – 1

Question 24 Chapter 8 of +2-Part-1 - Solution
Question 24 Chapter 8 of +2-Part-1 - Solution

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Question 24 Chapter 8 of +2-Part-1

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24. (Prorata Allotment/Refund) A company invited applications for 50,000 shares of 10 each on the following terms :
On application RS. 3
On allotment Rs. 2
On first and final call Rs. 5
Applications were received for 1,10,000 shares. It was decided (i) to refuse allotment to the applications for 10,000 shares (ii) to allot 50 percent to Mr. Black who applied for 20,000 shares (iii) to allot in full to Mr. Brown who applied for 10,000 shares (iv) to allot balance of available shares equitably among the other applicants and (v) to utilize excess application money in part payment of allotment and final call.
Give journal entries till the stage of allotment assuming that the entire sum due on allotment is received in full.

The solution of Question 24 Chapter 8 of +2 Part-1: –

Journal
Date  Particulars
L.F.DebitCredit
A)Bank A/cDr. 3,30,000 
 To Share Application A/c   3,30,000
 (Being application money received on 1,10,000 shares @ Rs. 3 per share)   
      
B)Share Application A/cDr. 6,64,000 
 To Share capital A/c WN-1   1,50,000
 To Share Allotment A/c WN-1   80,000
 To Calls in advance A/c WN-1   70,000
 To Bank A/c WN-1   30,000
 (Being application money on 50,000 shares transferred to share capital A/c & refunded on 10,000 rejected applications)   
     
(C)Share AllotmentA/cDr. 1,00,000 
 To Share capital A/c  1,00,000
 (Being allotment money due on 50,000 share @ Rs. 2 per shares )   
     
(D)Bank A/c WN-2Dr. 20,000 
 To Share Allotment A/c   20,000
 (Being balance allotement money received)   
     

Working notes of Question 24 Chapter 8 of +2-Part-1:

WN – 1 – Analysis Table 

Categories Shares AppliedShares AllottedApp. Money ReceivedApp. DueSurplusAllotment Money DueSurplus adjusted towards allotment

Surplus1st Call Money due

Surplus adjusted towards 1st call

SurplusRefund
 (1)(2)3 =
(1) X Rs.3
(4)=
(2) X 3
(5)=
(3) – (4)
(6)=
(2) X Rs2
(7)(8)=
(5) – (7)
(9)=
(2) X Rs.5
(10)(11)=
(8)-(10)
12
   Rs.Rs.Rs.Rs. Rs.Rs. Rs.Rs.
Refused10,000– 30,000– – – – – – – – 30,000
Mr. Black20,00010,00060,00030,00030,00020,00020,00010,00050,00010,000– – 
Mr. Brown 10,00010,00030,00030,000– 20,000– – 50,000– – – 
Pro. Rata70,00030,0002,10,00090,0001,20,00060,00060,00060,0001,50,00060,000– – 
Total1,10,00050,0003,30,0001,50,0001,50,0001,00,00080,00070,0002,50,00070,000– 30,000

WN – 2  – Calculation of Amount received on allotment: –

 Rs.
Allotment amount due1,00,000
Less: –already received in the form of excess app. Money80,000
Total20,000

It all about Question 24 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
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firm

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