Question

Suhas Limited issued 10000 equity shares of ₹ 10 each at a premium of ₹ 2 per share payable ₹ 3 on application, ₹ 5 (including premium) on allotment and the balance in two calls of equal amount. Applications were received for ll,000 equity shares and pro-rata allotment was made for all the applicants. The excess application money was adjusted towards allotment. Mrs. Shobha who were allotted 200 equity shares failed to pay F/F/C and her shares were forfeited after the final call

Show Journal entries in the books of Suhas Ltd. and also show its presentation in Balance sheet.

Answer 1

Journal Entries in the books of Suhas Limited
Date	Particulars	L.F	Debit Amount (₹)	Credit Amount (₹)
1	Bank A/c Dr		33,000
	To Equity Share Application A/c			33,000
	( Being application money on 11,000 equity shares @ ₹ 3 per share received)
2	Equity Share Application A/c Dr.		33,000
	To Equity Share Capital A/c			30,000
	To Equity Share Allotment A/c			3,000
	( Being application money on 10,000 shares transferred to Share Capital A/c and remaining amount adjusted against allotment)
3	Equity Share Allotment A/c Dr		50,000
	To Equity Share Capital A/c			30,000
	To Share Premium A/c			20,000
	( Being allotment money on 10,000 equity shares @ ₹ 5 per share, including premium of ₹ 2 per share, due)
4	Bank A/c Dr		47,000
	To Equity Share Allotment A/c			47,000
	( Being share allotment money received after adjusting excess application money received)
5	Equity Share First Call A/c Dr		20,000
	To Equity Share Capital A/c			20,000
	( Being equity share first call money on 10,000 shares @ ₹ 2 per share due)
6	Bank A/c Dr.		19,600
	To Equity Share First Call A/c			19,600
	( Being share first call money received @ ₹ 2 per share except 200 shares of Mrs Shobha)
7	Equity Share Final Call A/c Dr.		20,000
	To Equity Share Capital A/c			20,000
	( Being equity share final call money on 10,000 shares @ ₹ 2 per share due)
8	Bank A/c Dr.		19,600
	To Equity Share Final Call A/c			19,600
	( Being share final call money received @ ₹ 2 per share except 200 shares of Mrs. Shobha)
9	Equity Share Capital A/c Dr		2,000
	To Equity Share First Call A/c			400
	To Equity Share Final Call A/c			400
	To Equity Share Forfeiture A/c			1,200
	( Being 200 shares of Mrs. Shobha forfeited due to non-payment of first and final call @ ₹ 2 each i.e. paid amount ₹ 6 per share forfeited by company)
			244200	244200

 

Balance Sheet of Suhas Limited
Liabilities	Amount (₹)	Assets	Amount (₹)
Share Capital	98,000	Bank	1,19,200
Share Premium	20,000
Share forfeiture	1,200
	1,19,200		1,19,200

Working Notes :

(1) Excess amount received at the time of application ₹ 3,000 adjusted at allotment stage, so allotment amount received in bank is ₹ 47,000.

(2) Amount called-up per share: ₹ 3 on application, ₹ 5 (including premium) on allotment i.e. ₹ 2 premium + ₹ 3 capital and balance amount ₹ 4 in two calls of equal amount i.e. ₹ 2 on first call and ₹ 2 on final call.

(3) Mrs Shobha was not able to pay F / F / C i.e. first and final call means 200 × ₹ 2 first call money = ₹ 400 and 200 × ₹ 2 final call money = ₹ 400. Mrs Shobha paid ₹ 6 per share towards capital which company received and company has right to forfeit only paid amount means company forfeited ₹ 1,200 of Mrs Shobha.