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Question
Moneyplus Company issued for public subscription 75,000 shares of the value of Rs 10 each at a discount of 10% payable as follows: Rs 2 per share on an application, Rs 3 per share on an allotment and Rs 4 per share on call. The company received applications for 1,50,000 shares. The allotment was done as under:
a. Applicants of 15,000 shares were allotted 5,000 shares.
b. Applicants of 70,000 shares were allotted 40,000 shares.
c. Remaining applicants were allotted 30,000 shares.
Money in excess to allotment was returned. Hari, a shareholder who had applied for 3,500 shares out of group B failed to pay allotment and call money. Rohan, a shareholder who was allotted 3,000 shares paid the call money along with the allotment. Rohan also belonged to group B. Pass necessary journal entries to record the above transactions in the books of the company. Show your working notes clearly.
Solution
| Journal | ||||
| Date | Particulars | L.F. |
Dr. Rs |
Cr. Rs |
|
Bank A/c Dr. To Share Application A/c (Being application money on 1,50,000 shares received) |
3,00,000
|
3,00,000
|
||
|
Share application A/c Dr. To Share Capital A/c To Share Allotment A/c (WN1) To Bank A/c (WN1) (Being share Application money on 75,000 shares transferred to share capital account and excess was utilized on an allotment and balance excess money refunded) |
3,00,000
|
1,50,000 1,45,000 5,000
|
||
|
Share Allotment A/c Dr. Discount on Issue of Shares A/c Dr. To Share capital A/c (Being allotment money due on allotment) |
2,25,000 75,000
|
3,00,000
|
||
|
Bank A/c (2,25,000 – 1,45,000 – 3,000 + 12,000) Dr. To Share Allotment A/c (2,25,000 – 1,45,000 – 3,000) To Calls-in-Advance A/c (Being allotment money received along with advance call money on 3,000 shares and Rs 1,45,000 excess money adjusted) |
89,000
|
77,000 12,000
|
||
|
Share Call A/c Dr. To Share Allotment A/c (Being share Call Money due) |
3,00,000
|
3,00,000
|
||
|
Bank A/c (3,00,000 – 8,000 – 12,000) Dr. Calls-in-Advance A/c Dr. To Share capital A/c (Being share call money received and Calls-in-Advance money adjusted) |
2,80,000 12,000
|
2,92,000
|
||
Working Note:
WN1:
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Category | Shares Applied |
Shares Allotted |
Money Receive on application at Rs 2 each |
Excess money Received on application |
Excess money received on application |
Excess Amount on application utilised on Allotment at Rs 3 each |
Excess Amount on application to be returned |
| a | 15,000 | 5,000 | 30,000 | 10,000 | 20,000 | 15,000 | 5,000 |
| b | 70,000 | 40,000 | 1,40,000 | 80,000 | 60,000 | 60,000 | |
| c | 65,000 | 30,000 | 1,30,000 | 60,000 | 70,000 | 70,000 | |
| Total | 1,50,000 | 75,000 | 3,00,000 | 1,50,000 | 1,50,000 | 1,45,000 |
5,000 (Refunded) |
WN2 Calculation of Unpaid Amount o Allotment by Hari
Number of shares applied by Hari = 3500 shares
∴ Number of shares allotted to Hari = `3500/70000 xx 40000 = 2000` Shares
| Amount Received on application (3,500 shares × Rs 2) | 7,000 |
| Less: Utilised on application (2,000 Shares × Rs 2) | (4,000) |
| Excess amount received on application | 3,000 |
| Amount due on the allotment (2,000 shares × Rs 3) | 6,000 |
| Less: Excess amount received on an application | (3,000) |
| Amount unpaid on Allotment by Hari | 3,000 |
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Answer in one Sentence only :
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