Question

A company issued 20,000 equity shares of Rs.10 each, payable Rs.3 on application, Rs.3 on allotment, Rs.2 on the first call, Rs.2 on the second call, and the final call. The allotment money was payable on or before May 01, 2015; first call money on or before August Ist, 2015; and the second and final call on or before October Ist, 2015; ‘X’, whom 1,000 shares were allotted, did not pay the allotment and call money; ‘Y’, an allottee of 600 shares, did not pay the two calls; and ‘Z’, whom 400 shares were allotted, did not pay the final call. Pass journal entries and prepare the balance sheet of the company.

Answer 1

Journal Entries
Date	Particulars	L.F.	Debit	Credit
2015
May 01	Bank A/c   ...Dr.		60,000	-
	To Equity Share Application A/c		-	60,000
	(Being application money received on 20,000 shares @ Rs. 3 per share)
May 01	Equity Share Application A/c   ...Dr.		60,000	-
	To Equity Share Capital A/c		-	60,000
	(Being application money transferred to Share Capital Account)
May 01	Equity Share Allotment A/c   ...Dr.		60,000	-
	To Equity Share Capital A/c		-	60,000
	(Being allotment money due on 20,000 shares @ Rs. 3 per share)
May 01	Bank A/c   ...Dr.		57,000	-
	Calls-in-Arrears A/c   ...Dr.		3,000	-
	To Equity Share Allotment A/c		-	60,000
	(Being allotment money received except from X on 1,000 shares)
Aug 01	Equity Share First Call A/c   ...Dr.		40,000	-
	To Equity Share Capital A/c		-	40,000
	(Being first call money due on 20,000 shares @ Rs. 2 per share)
Aug 01	Bank A/c    ...Dr.		36,800	-
	Calls-in-Arrears A/c   ...Dr.		3,200	-
	To Equity Share First Call A/c		-	40,000
	(Being the first call money received except from X and Y on 1,600 shares)
Oct 01	Equity Share Second & Final Call A/c    ...Dr.		40,000	-
	To Equity Share Capital A/c		-	40,000
	(Being the second and final call money due on 20,000 shares @ Rs. 2 per share)
Oct 01	Bank A/c   ...Dr.		36,000	-
	Calls-in-Arrears A/c   ...Dr.		4,000	-
	To Equity Share Second & Final Call A/c		-	40,000
	(Being the final call money received except from X, Y, and Z on 2,000 shares)

 

Balance Sheet
Particulars	Note No.	Amount (₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital	1	1,89,800
Total		1,89,800
II. ASSETS
1. Current Assets
(a) Cash and Cash Equivalents	2	1,89,800
Total		1,89,800

Notes to Accounts

Particulars	Amount (₹)	Amount (₹)
1. Share Capital
Authorised Capital
Equity Shares of Rs. 10 each		-
Issued Capital
20,000 Equity Shares of Rs. 10 each		2,00,000
Subscribed Capital
Subscribed but not fully paid-up:
20,000 Equity Shares of Rs. 10 each	2,00,000
Less: Calls-in-Arrears	(10,200)	1,89,800
2. Cash and Cash Equivalents
Cash at Bank		1,89,800

Working Note:

1. Calls-in-Arrears:

Allotment Calls-in-Arrears = 1,000 × Rs. 3

= Rs. 3,000

 Total received = 60,000 − 3,000

= Rs. 57,000

2. First Call Calls-in-Arrears:

X = 1,000 × Rs. 2

= 2,000

Y = 600 × Rs. 2

= 1,200

First Call = X + Y

= 2,000 + 1,200

= 3,200

Total received = 40,000 − 3,200

= Rs. 36,800

3. Second & Final Call Calls-in-Arrears:

X = 1,000 × Rs. 2

= 2,000

Y = 600 × Rs. 2

= 1,200

Z = 400 × Rs. 2

= 800

Total Arrears = 2,000 + 1,200 + 800

= Rs. 4,000

Total received = Rs. 40,000 − Rs. 4,000

= Rs. 36,000

4. Total Calls-in-Arrears:

Total Arrears = Rs. 3,000 (Allotment) + Rs. 3,200 (First Call) + Rs. 4,000 (Final Call)

= Rs. 10,200

Total Bank Balance = Rs. 60,000 + Rs. 57,000 + Rs. 36,800 + Rs. 36,000

= Rs. 1,89,800