Page 181 - ISCDEBK-12
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Joint Stock Company—Issue of Shares 7.17
Notes to Accounts
1. Share Capital `
Authorised Capital
... Equity Shares of ` 100 each ...
Issued Capital
10,000 Equity Shares of ` 100 each 10,00,000
Subscribed Capital
Subscribed and fully paid-up
9,960 Equity Shares of ` 100 each 9,96,000
Subscribed but not fully paid-up
40 Equity Shares of ` 100 each 4,000
Less: Calls-in-Arrears (40 × ` 25) 1,000 3,000
9,99,000
2. Reserves and Surplus
Capital Reserve 2,500
3. Cash and Bank Balances
Cash at Bank 10,01,500
Illustration 13.
PQR & Co. Ltd., with authorised capital of 1,00,000 Equity Shares of ` 10 each, made a public
issue of 80,000 Equity Shares at a premium of ` 3 per share payable ` 2 on application,
` 5 on allotment (including premium), ` 3 on the first call and the balance after some time.
Applications were received for 1,00,000 shares. The Board of Directors decided to refund
the excess application money and thereafter allot the remaining shares.
During allotment, Mr. M holding 1,000 shares failed to pay the allotment money
while Mr. N holding 2,000 shares paid the entire amount due up to the second and the
final call.
Thereafter, the first call was made and after giving a sufficient notice to Mr. M, the company
decided to forfeit his shares and subsequently reissued 800 of the forfeited shares to
Mr. O @ ` 11 each fully paid-up @ ` 13 each.
You are required to Journalise the above issue of shares through Calls-in-Arrears Account
and the Calls-in-Advance Account along with other entries in the books of PQR & Co. Ltd.
Solution: JOURNAL OF PQR & CO. LTD.
Date Particulars L.F. Dr. (`) Cr. (`)
Bank A/c (1,00,000 × ` 2) ...Dr. 2,00,000
To Equity Shares Application A/c 2,00,000
(Being the application money received for 1,00,000 shares @ ` 2 per share)
Equity Shares Application A/c ...Dr. 2,00,000
To Equity Share Capital A/c (80,000 × ` 2) 1,60,000
To Bank A/c (20,000 × ` 2) 40,000
(Being the application money received on 80,000 shares transferred to Equity
Share Capital A/c on allotment of shares and that on 20,000 shares returned)