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Question
Suhas Limited issued 10000 equity shares of ₹ 10 each at a premium of ₹ 2 per share payable ₹ 3 on application, ₹ 5 (including premium) on allotment and the balance in two calls of equal amount. Applications were received for ll,000 equity shares and pro-rata allotment was made for all the applicants. The excess application money was adjusted towards allotment. Mrs. Shobha who were allotted 200 equity shares failed to pay F/F/C and her shares were forfeited after the final call
Show Journal entries in the books of Suhas Ltd. and also show its presentation in Balance sheet.
Solution
| Journal Entries in the books of Suhas Limited | ||||
| Date | Particulars | L.F | Debit Amount (₹) | Credit Amount (₹) |
| 1 | Bank A/c Dr | 33,000 | ||
| To Equity Share Application A/c | 33,000 | |||
| ( Being application money on 11,000 equity shares @ ₹ 3 per share received) | ||||
| 2 | Equity Share Application A/c Dr. | 33,000 | ||
| To Equity Share Capital A/c | 30,000 | |||
| To Equity Share Allotment A/c | 3,000 | |||
| ( Being application money on 10,000 shares transferred to Share Capital A/c and remaining amount adjusted against allotment) | ||||
| 3 | Equity Share Allotment A/c Dr | 50,000 | ||
| To Equity Share Capital A/c | 30,000 | |||
| To Share Premium A/c | 20,000 | |||
| ( Being allotment money on 10,000 equity shares @ ₹ 5 per share, including premium of ₹ 2 per share, due) | ||||
| 4 | Bank A/c Dr | 47,000 | ||
| To Equity Share Allotment A/c | 47,000 | |||
| ( Being share allotment money received after adjusting excess application money received) | ||||
| 5 | Equity Share First Call A/c Dr | 20,000 | ||
| To Equity Share Capital A/c | 20,000 | |||
| ( Being equity share first call money on 10,000 shares @ ₹ 2 per share due) | ||||
| 6 | Bank A/c Dr. | 19,600 | ||
| To Equity Share First Call A/c | 19,600 | |||
| ( Being share first call money received @ ₹ 2 per share except 200 shares of Mrs Shobha) | ||||
| 7 | Equity Share Final Call A/c Dr. | 20,000 | ||
| To Equity Share Capital A/c | 20,000 | |||
| ( Being equity share final call money on 10,000 shares @ ₹ 2 per share due) | ||||
| 8 | Bank A/c Dr. | 19,600 | ||
| To Equity Share Final Call A/c | 19,600 | |||
| ( Being share final call money received @ ₹ 2 per share except 200 shares of Mrs. Shobha) | ||||
| 9 | Equity Share Capital A/c Dr | 2,000 | ||
| To Equity Share First Call A/c | 400 | |||
| To Equity Share Final Call A/c | 400 | |||
| To Equity Share Forfeiture A/c | 1,200 | |||
| ( Being 200 shares of Mrs. Shobha forfeited due to non-payment of first and final call @ ₹ 2 each i.e. paid amount ₹ 6 per share forfeited by company) | ||||
| 244200 | 244200 | |||
| Balance Sheet of Suhas Limited | |||
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Share Capital | 98,000 | Bank | 1,19,200 |
| Share Premium | 20,000 | ||
| Share forfeiture | 1,200 | ||
| 1,19,200 | 1,19,200 | ||
Working Notes :
(1) Excess amount received at the time of application ₹ 3,000 adjusted at allotment stage, so allotment amount received in bank is ₹ 47,000.
(2) Amount called-up per share: ₹ 3 on application, ₹ 5 (including premium) on allotment i.e. ₹ 2 premium + ₹ 3 capital and balance amount ₹ 4 in two calls of equal amount i.e. ₹ 2 on first call and ₹ 2 on final call.
(3) Mrs Shobha was not able to pay F / F / C i.e. first and final call means 200 × ₹ 2 first call money = ₹ 400 and 200 × ₹ 2 final call money = ₹ 400. Mrs Shobha paid ₹ 6 per share towards capital which company received and company has right to forfeit only paid amount means company forfeited ₹ 1,200 of Mrs Shobha.
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