Question 83 Chapter 8 of +2-A - T.S. Grewal 12 Class

Question 83 Chapter 8 of +2-A

Table of Contents

The solution of Question 83 Chapter 8 of +2-A: –

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

83. A Ltd. invited applications for issuing 1,00,000 shares of ₹ 10 each at a premium of ₹ 1 per share. The amount was payable as follows:

On Application	–	3 per share;
On Allotment	–	3 per share (including premium);
On First Call	–	3 per share;
On Second and Final Call	–	Balance amount.

Applications for 1,60,000 shares were received. The allotment was made on the following basis:

(i)	To applicants for 90,000 shares	–	40,000 shares;
(ii)	To applicants for 50,000 shares	–	40,000 shares;
(iii)	To applicants for 20,000 shares	–	Full shares.

Excess money paid on the application is to be adjusted against the amount due on allotment and calls.
Rishabh, a shareholder, who applied for 1,500 shares and belonged to category (ii), did not pay allotment, first and second and final call money.
Another shareholder, Sudha, who applied for 1,800 shares and belonged to category (i), did not pay the first and second and final call money. All the shares of Rishabh and Sudha were forfeited and were subsequently reissued at ₹ 7 per share fully paid.
Pass the necessary Journal entries in the books of A Ltd. Open Calls-in-Arrears Account and Calls-in-Advance Account wherever required.

The solution of Question 83 Chapter 8 of +2-A: –


Date	Particulars		L.F.	Debit	Credit
	Bank A/c	Dr		4,80,000
	To share application A/c				4,80,000
	(Being the application money received )
	Share application A/c	Dr		4,80,000
	To Share capital A/c				3,00,000
	To Share allotment A/c				1,50,000
	To calls in advance A/c				30,000
	(Being application money transferred to equity share capital )
	Share allotment A/c	Dr		3,00,000
	To Share capital A/c				2,00,000
	To Securities premium A/c				1,00,000
	(Being the allotment money due )
	Bank A/c	Dr		1,47,300
	Calls in Arrears A/c	Dr		2,700
	To Share allotment A/c				1,50,000
	(Being allotment money received capital )
	Share first call A/c	Dr		3,00,000
	To Share capital A/c				3,00,000
	(Being the first call money due )
	Bank A/c	Dr		2,64,600
	Calls in arrear A/c	Dr		30,000
	Calls in advance A/c	Dr		5,400
	To Share first call A/c				3,00,000
	(Being first call money received )
	Share second and final call A/c	Dr		2,00,000
	To Share capital A/c				2,00,000
	(Being the second and final call money due )
	Bank A/c	Dr		1,96,000
	Calls in arrear A/c	Dr		4,000
	To Share second and final call A/c				2,00,000
	(Being second and final call money received )
	Share capital A/c	Dr		20,000
	Securities Premium Reserve A/c	Dr		1,200
	To calls in arrear A/c				12,100
	To share forfeiture A/c				9,100
	(Being share forfeited )
	Bank A/c	Dr		14,000
	Share Forfeiture A/c	Dr		6,000
	To share capital A/c				20,000
	(Being forfeited share reissue )
	Share forfeiture A/c	Dr		3,100
	To capital Reserve A/c				3,100
	(Being the gain on reissue transferred to capital reserve )

Shares applied	Shares applied amount @ Rs 3	Shares allotted	Money received in appli cation @ Rs 3 each	Money transferred to share capital @Rs 3	Excess appli cation money	Amount adjusted on the allot ment	Money refunded
90,000	2,70,000	40,000	1,20,000	1,20,000	1,20,000	–	Nil
50,000	1,50,000	40,000	1,20,000	30,000	30,000	–	Nil
20,000	60,000	20,000	60,000	60,000	–	–	Nil
1,60,000	4,80,000	1,00,000	3,00,000	1,50,000	30,000	60,000	Nil

Working notes –

Amount not paid by Rishab (Calls in arrear )	Amount
Allotment due to Rishabh’s shares	3,600
Less: Excess on application 3* (1500 -1200 )	(900)
	2,700

No. of Shares allotted to Rishabh = 1,500×40,000/50,000 =1,200

Amount not paid in respect of first call (calls in arrears)	Amount
First call due (2000*3)	6,000
Less: Excess on the application on Sudha’s shares	(600)
	5,400