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

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. Debit Credit
A) Bank A/c Dr.   3,30,000  
  To Share Application A/c       3,30,000
  (Being application money received on 1,10,000 share shares @ Rs. 3 per share)      
           
B) Share Application A/c Dr.   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/c Dr.   1,00,000  
  To Share capital A/c     1,00,000
  (Being allotment money due on 50,000 share @ Rs. 2 as per shares )      
         
(D) Bank A/c WN-2 Dr.   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 Applied Shares Allotted App. Money Received App. Due Surplus Allotment Money Adjusted Surplus adjusted towards allotment

Surplus 1st Call Money due

Surplus adjusted towards 1st call

Surplus Refund
  (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.
Refused 10,000 –  30,000 –  –  –  –  –  –  –  –  30,000
Mr. Black 20,000 10,000 60,000 30,000 30,000 20,000 20,000 10,000 50,000 10,000 –  – 
Mr. Brown  10,000 10,000 30,000 30,000 –  20,000 –  –  50,000 –  –  – 
Pro. Rata 70,000 30,000 2,10,000 90,000 1,20,000 60,000 60,000 60,000 1,50,000 60,000 –  – 
Total 1,10,000 50,000 3,30,000 1,50,000 1,50,000 1,00,000 80,000 70,000 2,50,000 70,000 –  30,000

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

  Rs.
Allotment amount due 1,00,000
Less: –already received in the form of excess app. Money 80,000
Total 20,000

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 - Question 24 Chapter 8 of +2-Part-1 - USHA Publication 12 Class Part - 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firm

Leave a Reply

Your email address will not be published. Required fields are marked *