Page 185 - ISCDEBK-12

Joint Stock Company—Issue of Shares 7.21

Notes to Accounts
1. Share Capital `
Authorised Capital
... Equity Shares of ` 20 each ...
Issued Capital
50,000 Equity Share of ` 20 each 10,00,000
Subscribed Capital
Subscribed and Fully paid-up
49,950 Equity Shares of ` 20 each 9,99,000
Add: Forfeited Shares Account (` 600 + ` 1,500 – ` 800 – ` 800) 500 9,99,500
2. Reserves and Surplus
Capital Reserve (WN 4) 800
Securities Premium Reserve (` 2,00,000 – ` 400) 1,99,600 2,00,400
3. Cash and Bank Balances
Cash at Bank (` 3,75,000 – ` 75,000 + ` 3,99,200 + ` 2,48,750 + ` 2,48,750 + ` 3,200) 11,99,900

Working Notes:
1. Calculation of Excess Application Money Received from A:

Number of Shares Allotted = 100 shares
È 120 000 ˘
,
,
Number of Shares Applied by A Í ¥ 100 = 120 shares
˙
Î 100 000 ˚
,
,
Excess Application Money to be adjusted on Allotment = [(120 – 100) × ` 5] = ` 100.
2. Calculation of Amount due from A on Allotment: `
Total Amount due on Allotment from A (100 × ` 9) 900
Less: Excess Application Money to be adjusted (WN 1) 100
Net Amount due from A on Allotment which was not Received 800

3. Calculation of Amount Received on Allotment: `
Total Amount due on Allotment (50,000 × ` 9) 4,50,000
Less: Excess Application Money Adjusted 50,000
4,00,000
Less: Amount not Received from A (WN 2) 800
Amount Received on Allotment 3,99,200

4. Calculation of Amount Transferred to Capital Reserve: `
Amount Forfeited on 100 Shares of A 600
Add: Amount Forfeited on 100 Shares of B (` 1,500/150 × 100) 1,000
1,600
Less: Discount Allowed on Reissue 800
Gain on Reissue to be transferred to Capital Reserve 800