Page 173 - ISCDEBK-12

Joint Stock Company—Issue of Shares 7.9
Illustration 6.
Advance Solutions Ltd. purchased assets from 3A Consultants for ` 4,00,000. Consideration
was paid by issue of 35,000 Equity Shares of ` 10 each at par and balance was paid by
cheque. Journalise the above transactions in the books of the company.
Solution: In the Books of Advance Solutions Ltd.
JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)
Sundry Assets A/c ...Dr. 4,00,000
To 3A Consultants 4,00,000
(Being the assets purchased from 3A Consultants vide agreement dated ...)
3A Consultants ...Dr. 4,00,000
To Equity Share Capital A/c 3,50,000
To Bank A/c 50,000
(Being issue of 35,000 fully paid Equity Shares of ` 10 each issued at
par and balance paid by cheque)
Illustration 7.
Aar Kay Ltd. has authorised capital of ` 5,00,000 divided into 50,000 Equity Shares of
` 10 each. It issued 20,000 shares to the public on the following terms: ` 5 on application
and ` 5 on allotment.
Applications were received for 25,000 shares on 17th July, 2017 and allotment was made on
3rd August, 2017 on which date the excess application money was refunded to the applicants
who were not allotted any share. The allotment money was duly received by 31st August, 2017.
Show Bank Account, Shares Application Account, Shares Allotment Account and Share
Capital Account for the year. Also, show as to how the share capital would appear in
Balance Sheet as at 31st March, 2018.
Solution: In the Books of Aar Kay Ltd.
Dr. BANK ACCOUNT Cr.
Particulars ` Particulars `
To Shares Application A/c (25,000 × ` 5) 1,25,000 By Shares Application A/c (5,000 × ` 5) 25,000
To Shares Allotment A/c (20,000 × ` 5) 1,00,000 By Balance c/d 2,00,000
2,25,000 2,25,000

Dr. SHARES APPLICATION ACCOUNT Cr.
Particulars ` Particulars `
To Share Capital A/c 1,00,000 By Bank A/c 1,25,000
To Bank A/c 25,000
1,25,000 1,25,000

Dr. SHARES ALLOTMENT ACCOUNT Cr.
Particulars ` Particulars `

To Share Capital A/c 1,00,000 By Bank A/c 1,00,000
1,00,000 1,00,000