Question

Dinesh Ltd. issued 5,000 shares of ₹100 each at par, payable as follows:

	₹
On Application	25
On Allotment	25
On First Call	20
On Final Call	30

Anil, holding 100 shares failed to pay the amount of allotment and first call and his shares were forfeited after the first call.
Sunil, holding 200 shares failed to pay the amount due on final call and his shares were also forfeited.
Show entries in the Cash Book and Journal of the Company and also prepare the Balance Sheet.

Answer 1

Journal Entries In the books of Dinesh Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Bank A/c     ...Dr.		1,25,000
	To Share Application A/c			1,25,000
	(Application money received on 5,000 shares @ ₹25)
2.	Share Application A/c     ...Dr.		1,25,000
	To Share Capital A/c			1,25,000
	(Application money transferred to Share Capital)
3.	Share Allotment A/c     ...Dr.		1,25,000
	To Share Capital A/c			1,25,000
	(Allotment money due @ ₹25 on 5,000 shares)
4.	Bank A/c     ...Dr.		1,22,500
	Calls in Arrears A/c     ...Dr.		2,500
	To Share Allotment A/c			1,25,000
	(Allotment received; Anil failed on 100 shares)
5.	Share First Call A/c     ...Dr.		1,00,000
	To Share Capital A/c			1,00,000
	(First call due @ ₹20 on 5,000 shares)
6.	Bank A/c     ...Dr.		98,000
	Calls in Arrears A/c     ...Dr.		2,000
	To Share First Call A/c			1,00,000
	(First call received; Anil failed on 100 shares)
7.	Share Final Call A/c     ...Dr.		1,50,000
	To Share Capital A/c			1,50,000
	(Final call due @ ₹30 on 5,000 shares)
8.	Bank A/c     ...Dr.		1,44,000
	Calls in Arrears A/c     ...Dr.		6,000
	To Share Final Call A/c			1,50,000
	(Final call received; Sunil failed on 200 shares)
9.	Share Capital A/c     ...Dr.		4,500
	To Calls in Arrears A/c			4,500
	(Forfeiture of Anil’s 100 shares: ₹25 (allotment) + ₹20 (1st call))
10.	Share Capital A/c     ...Dr.		20,000
	To Calls in Arrears A/c			6,000
	To Share Forfeiture A/c			14,000
	(Forfeiture of Sunil’s 200 shares: ₹70 paid, ₹30 unpaid)

Cash Book (Bank Column Only)

Date	Particulars	Amount (₹)
1.	To Application A/c	1,25,000
2.	To Allotment A/c	1,22,500
3.	To First Call A/c	98,000
4.	To Final Call A/c	1,44,000
	Total	₹4,89,500

 

Balance Sheet of Dinesh Ltd.
Liabilities	Amount (₹)	Assets	Amount (₹)
Share Capital
5,000 Shares of ₹100 each = ₹5,00,000		Bank Balance (from Cash Book)	4,89,500
Less: 300 shares forfeited = ₹30,000		Less: Calls in Arrears (300 shares)	(3,000)
Paid-up Capital (4,700 shares @ ₹100)	4,70,000
Share Forfeiture A/c	16,500
Total	₹4,86,500	Net Bank	₹4,86,500