Page 169 - MA-12

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

7. Dr. CALLS-IN-ADVANCE ACCOUNT Cr.
Date Particulars ` Date Particulars `
To Shares First and Final By Bank A/c (Alok) 9,000
Call A/c (Alok) 9,000
9,000 9,000

8. Dr. SECURITIES PREMIUM RESERVE ACCOUNT Cr.

Date Particulars ` Date Particulars `
To Calls-in-Arrears A/c 4,000 By Shares Allotment A/c 2,00,000
To Balance c/d 1,96,000
2,00,000 2,00,000

Illustration 17.
Zenon Ltd. issued 3,00,000 shares of ` 10 each at a premium of ` 4 per share, payable
as under:
On application ` 3 (including ` 1 premium);
On allotment ` 4 (including ` 1 premium);
On first call ` 4 (including ` 1 premium);
On second and final call ` 3 (including balance premium).
Applications were received for 3,80,000 shares, allotment was made on pro rata basis to
the applicants for 3,50,000 shares, the remaining applications being refused. The money
overpaid on applications was utilised towards sum due on allotment.
Honey, to whom 6,000 shares were allotted, failed to pay the allotment money and
his shares were forfeited after allotment. Khushal, who applied for 10,500 shares,
failed to pay the two calls and on his such failure, his shares were also forfeited.
Sukmani to whom 3,000 shares were allotted failed to pay the final call.
Of the shares forfeited, 11,000 shares were reissued as fully paid-up for ` 9 per share,
the whole of Khushal’s shares being included.
Prepare Cash Book, Journal and Balance Sheet.
Solution: In the Books of Zenon Ltd.
Dr. CASH BOOK (BANK COLUMN ONLY) Cr.
Particulars ` Particulars `
To Shares Application A/c 11,40,000 By Shares Application A/c 90,000
(3,80,000 shares × ` 3) (30,000 shares × ` 3)
To Shares Allotment A/c (WN 1) 10,29,000 By Balance c/d 41,64,000
To Shares First Call A/c (WN 2) 11,40,000
(2,85,000 shares × ` 4)
To Shares Second and Final Call A/c 8,46,000
(2,82,000 shares × ` 3) (WN 2)
To Share Capital A/c 99,000
42,54,000 42,54,000