Page 224 - MA-12

Final Accounts of Companies—Application of Schedule III, Part I... 9.13

Master Question and Advanced Level Questions

Illustration 6.

Ell Kay Ltd. is a company registered with authorised capital of 5,00,000 Equity Shares
of ` 10 each and 50,000 Preference Shares of ` 100 each. It has existing paid-up capital
as follows:
(i) 50,000 Equity Shares of ` 10 each,

(ii) 5,000, 10% Preference Shares of ` 100 each.

The amount received by the company as above is lying deposited in a Bank Account.

It purchased machinery from Excel Ltd. of ` 11,50,000 and paid the consideration by
issuing cheque of ` 50,000 and balance by issuing 15% Preference Shares of ` 100 each
at a premium of 10%.

It issued to public for subscription 2,00,000 Equity Shares of ` 10 each at a premium of
` 5 and also 25,000, 10% Preference Shares of ` 100 each at par. Amounts were payable
as follows:
Equity Shares (`) 10% Preference Shares (`)
On Application 5 50
On Allotment 8 30

On First and Final Call Balance Amount Balance Amount

Applications were received for 5,00,000 Equity Shares and 40,000 Preference Shares.
Equity Shares were allotted on pro rata basis to all the applicants and excess application
money was retained to be adjusted towards allotment money and call money. Amount
due on allotment and calls were received except allotment money on 1,000 Equity Shares
from Anil and call money on 1,000 Equity Shares of Anil and 2,000 Equity Shares of Go-
pal. Shares of Anil were forfeited. Out of these forfeited shares, 500 Equity Shares were

reissued at ` 15 each as fully paid-up.
Applications for 15,000, 10% Preference Shares were not allotted any share and amount
was refunded. All amounts due on Preference Shares were received on due dates except

first and final call on 1,000 Preference Shares. Amit holder of 500, 10% Preference Shares
paid the call money together with allotment money.
Pass Journal entries, prepare Calls-in-Arrears and Calls-in-Advance Accounts and also
the Balance Sheet.