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)
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