Question

Alfa Company Ltd. issued 10,000 shares of Rs. 10 each for cash, payable Rs. 3 on application, Rs. 2 on allotment, and the balance in two equal instalments. The allotment money was payable on or before March 31, 2015; the first call money on or before 30 June, 2015; and the final call money on or before August, 31. 2015. Mr. ‘A’, to whom 600 shares were allotted, paid the entire remaining face value of shares allotted to him on allotment. Record journal entries in the company’s books and also exhibit the share capital in the balance sheet on the date.

Answer 1

Journal Entries in the Books of Alfa Company Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
2015
Mar 31	Bank A/c   ...Dr.		30,000	-
	To Share Application A/c		-	30,000
	(Being application money collected on 10,000 shares @ Rs. 3 per share)
Mar 31	Share Application A/c   ...Dr.		30,000	-
	To Share Capital A/c		-	30,000
	(Being share application money safely transferred to the Share Capital account)
Mar 31	Share Allotment A/c   ...Dr.		20,000	-
	To Share Capital A/c		-	20,000
	(Being allotment process finalised and money declared due @ Rs. 2 per share)
Mar 31	Bank A/c   ...Dr.		23,000	-
	To Share Allotment A/c		-	20,000
	To Calls-in-Advance A/c		-	3,000
	(Being allotment collection finalised along with full remaining face value from A)
Jun 30	Share First Call A/c   ...Dr.		25,000	-
	To Share Capital A/c		-	25,000
	(Being the first installment declared due on 10,000 shares @ Rs. 2.50 per share)
Jun 30	Bank A/c   ...Dr.		23,500	-
	Calls-in-Advance A/c   ...Dr.		1,500	-
	To Share First Call A/c		-	25,000
	(Being the first call amount realised; the advance amount of A successfully adjusted)
Aug 31	Share Second & Final Call A/c   ...Dr.		25,000	-
	To Share Capital A/c		-	25,000
	(Being the final installment declared due on 10,000 shares @ Rs. 2.50 per share)
Aug 31	Bank A/c   ...Dr.		23,500	-
	Calls-in-Advance A/c   ...Dr.		1,500	-
	To Share Second & Final Call A/c		-	25,000
	(Being final call amount realized; remaining advance of A fully adjusted)

 

Balance Sheet
Particulars	Note No.	Amount (₹)
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital	1	1,00,000
Total		1,00,000
II. ASSETS
1. Current Assets
(a) Cash and Cash Equivalents	2	1,00,000
Total		1,00,000

Notes to Accounts:

Particulars	Amount (₹)
1. Share Capital
Authorised Capital
Equity Shares of Rs. 10 each	-
Issued Capital
10,000 Shares of Rs. 10 each	1,00,000
Subscribed Capital
Subscribed and Fully Paid-up:
10,000 Shares of Rs. 10 each	1,00,000
2. Cash and Cash Equivalents
Cash at Bank	1,00,000