Question

Z Ltd. was registered with an authorised capital of ₹60,00,000 divided in 60,000 equity shares of ₹100 each. Company issued 25,000 equity shares at a premium of ₹20 per share, payable as follows: ₹30 on Application; ₹45 on Allotment (including premium); ₹20 on first call and ₹25 on Second and Final Call.
All shares were subscribed and all the money was duly received. Share issue expenses amounted to ₹40,000 which were fully written off against Securities Premium.
Prepare necessary Journal Entries, Bank Account and Opening Balance Sheet.

Answer 1

Journal entries  in the books of Z Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Bank A/c     ...Dr.		7,50,000
	To Equity Share Application A/c			7,50,000
	(Application money received on 25000 shares @₹30 each)
2.	Equity Share Application A/c     ...Dr.		7,50,000
	To Equity Share Capital A/c			7,50,000
	(Application money transferred to share capital account)
3.	Equity Share Allotment A/c     ...Dr.		11,25,000
	To Equity Share Capital A/c			6,25,000
	To Securities Premium Reserve A/c			5,00,000
	(Allotment made due on 25000 shares @₹45 each including premium)
4.	Bank A/c     ...Dr.		11,25,000
	To Equity Share Allotment A/c			11,25,000
	(Allotment money received on 25000 shares)
5.	Equity Share First Call A/c     ...Dr.		5,00,000
	To Equity Share Capital A/c			5,00,000
	(Share first call made due of 25000 shares @₹20 each)
6.	Bank A/c     ...Dr.		5,00,000
	To Equity Share First Call A/c			5,00,000
	(Share first call made due)
7.	Equity Share Second and Final Call A/c     ...Dr.		6,25,000
	To Equity Share First Call A/c			6,25,000
	(Share second and final call made due on 25000 shares @₹25 each)
8.	Bank A/c     ...Dr.		6,25,000
	To Equity Share Second and Final Call A/c			6,25,000
	(Share call made due)
9.	Share issue Expenses A/c     ...Dr.		40,000
	To Bank A/c			40,000
	(Share issue expenses paid)
10.	Securities Premium Reserve A/c     ...Dr.		40,000
	To Share Issue Expenses A/c			40,000
	(Share issue expenses written off)

 

Dr.	Bank Account				Cr.
Particulars	J.F	Amount ₹	Particulars	J.F	Amount ₹
To Equity Share Application A/c		7,50,000	By Share Issue Expenses A/c		40,000
To Equity Share Allotment A/c		11,25,000	By Balance c/d		29,60,000
To Equity Share First Call A/c		5,00,000
To Equity Share Second and Final Call A/c		6,25,000
		30,00,000			30,00,000

 

Extract of Balance Sheet as at .....
Particulars	Amount Current Year ₹	Amount Previous Year ₹
I. Equity And Liabilities:
Shareholder's Funds:
(a) Share Capital	25,00,000
(b) Reserve and Surplus	4,60,000
II. Assets:
Current Assets
Cash and Bank Balance	29,60,000
	5,00,000

 

	₹
1 Share Capital
Authorised Capital
60000 shares of 100 each	60,00,000
Issued Capital
25000 shares of ₹100 each	25,00,000
Subscribed Capital:
Subscribed and Fully Paid Capital
25000 shares of ₹100 each	25,00,000
	25,00,000
2. Reserve and Surplus
Securities Premium Reserve	4,60,000
3. Cash and Bank Balance
Cash at Bank	29,60,000