Page 165 - MA-12

6.24 Double Entry Book Keeping (Section A)—ISC XII

2. Calls-in-Arrears:
Amount received from Dinesh on application:
`
200
¥5,00,000 = 500 × ` 3 1,500
2,00,000
Less: Amount adjusted on application (200 × ` 3) 600
900
Less: Amount adjusted on allotment (200 × ` 3) 600
Balance of Calls-in-Advance 300
Amount due from Dinesh on First call:
Share Capital (`) Securities Premium (`)
(200 × ` 2) + (200 × ` 1) 400 200
Less: Adjusted from Calls-in-Advance 300 ...
Amount not received 100 200
3. Amount forfeited on Shares allotted to Dinesh:
200
¥5,00,000 × ` 3 = ` 1,500.
2,00,000
Illustration 16.
Gee Kay Ltd. issued 1,00,000 shares of ` 10 each at a premium of ` 2 per share to public
for subscription payable as follows:
On application ` 4;
On allotment ` 5 (including premium); and
On first and final call Balance.
It received applications for 1,70,000 shares. It allotted shares on pro rata basis to applicants
of 1,50,000 shares and sent letter of regret to applicants for 20,000 shares along with
refund. Anil, to whom 1,000 shares were allotted, failed to pay allotment money and call
money on due dates but paid the amount along with interest of ` 300 on receiving notice
of forfeiture. Amit, to whom 2,000 shares were allotted, failed to pay allotment money
and call money in spite of receiving the notice of forfeiture. His shares were forfeited.
Alok, to whom 3,000 shares were allotted, paid call money along with the allotment money.
He was paid interest of ` 300 on Calls-in-Advance.
Out of the forfeited shares, 1,000 shares were reissued at ` 9 as fully paid-up.
Pass necessary Journal entries and draw the Balance Sheet of the company showing
Shareholders’ Funds.
Solution: JOURNAL OF GEE KAY LTD.

Date Particulars L.F. Dr. (`) Cr. (`)
Bank A/c ...Dr. 6,80,000
To Shares Application A/c 6,80,000
(Being the applications received for 1,70,000 shares)
Shares Application A/c ...Dr. 6,80,000
To Share Capital A/c 4,00,000
To Shares Allotment A/c 2,00,000
To Bank A/c 80,000
(Being the shares allotted and application money adjusted)