Page 183 - ISCDEBK-12

Joint Stock Company—Issue of Shares 7.19
Illustration 14.

Daksh Ltd. invited applications for 50,000 equity shares of ` 20 each at a premium of
` 4 per share payable as follows:
On application — ` 5 per share;
On allotment — ` 9 per share, (including premium);
On first call — ` 5 per share;
On final call — ` 5 per share.
Applications were received for 75,000 shares and shares were allotted on pro rata basis to
the applicants for 60,000 shares and remaining applications were rejected. Excess money
paid on application was adjusted against sum due on allotment.
A, who was allotted 100 shares, could not pay the sum due on allotment. Shares held by
him were forfeited on his failure to pay the first call, B, holding 150 shares, could not pay
two calls. The company forfeited his shares after the final call was made. Of the shares
forfeited, 200 shares were sold to Ajay credited as fully paid at ` 16 per share, all of
A’s forfeited shares being included.
Pass the necessary Journal entries to record the above transactions and prepare the
Balance Sheet.
Solution: In the Books of Daksh Ltd.
JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)
Bank A/c (75,000 × ` 5) ...Dr. 3,75,000
To Equity Shares Application A/c 3,75,000
(Being the application money received)
Equity Shares Application A/c ...Dr. 3,75,000
To Equity Share Capital A/c (50,000 × ` 5) 2,50,000
To Equity Shares Allotment A/c (10,000 × ` 5) 50,000
To Bank A/c (15,000 × ` 5) 75,000
(Being the application money adjusted and surplus refunded)

Equity Shares Allotment A/c (50,000 × ` 9) ...Dr. 4,50,000
To Equity Share Capital A/c (50,000 × ` 5) 2,50,000
To Securities Premium Reserve A/c (50,000 × ` 4) 2,00,000
(Being the allotment money due)
Bank A/c (WN 3) ...Dr. 3,99,200
Calls-in-Arrears A/c (WN 1) ...Dr. 800
To Equity Shares Allotment A/c 4,00,000
(Being the allotment money received except on 100 shares)
Equity Shares First Call A/c (50,000 × ` 5) ...Dr. 2,50,000
To Equity Share Capital A/c 2,50,000
(Being the first call money due)