Question

Ganga Ltd. invited applications for issuing 10,000 equity shares of ₹ 10 each. The amount per share was payable as follows: ₹ 2 on application, ₹ 3 on allotment, ₹ 3 on first call and ₹ 2 on second and final call.

Applications were received for 15,000 shares. The applications for 3,000 shares were rejected and application money refunded. The shares were allotted on pro-rata basis to the applicants of 12,000 shares, Excess money received with applications was adjusted towards sums due on allotment. All shareholders paid the allotment money except one shareholder who was allotted 200 shares. These shares were forfeited. The first call was made thereafter and duly received. The second and final call was not yet made.

Pass Journal entries for the above transactions in the books of Ganga Ltd. Open Calls-in-Asrears Account wherever required.

Answer 1

Journal Entries
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Bank A/c         ...Dr.		30,000
	To Equity Share Application A/c          ...Dr.			30,000
	(Being application received on 15,000 shares @ ₹2 per share)
2.	Equity Share Application A/c           ...Dr.		30,000
	To Equity Share Capital A/c			20,000
	To Equity Share Allotment A/c			4,000
	To Bank A/c			6,000
	(Being shares allotted)
3.	Equity Share Allotment A/c        ...Dr.		30,000
	To Equity Share Capital A/c			30,000
	(Being Allotment on 10,000@ ₹3/- made due)
4.	Bank A/c         ...Dr.		25,480
	Calls-in-Arrears A/c         ...Dr.		520
	To Equity Share Allotment A/c			26,000
	(Being share allotment money received)
5.	Equity Share Capital A/c         ...Dr.		1,000
	To Equity Share Forfeiture A/c			480
	To Calls-in-Arrears A/c			520
	(Being 200 share forfeited@ ₹5/- paid up)
6.	Equity Share First Call A/c           ...Dr.		29,400
	To Equity Share Capital A/c			29,400
	(Being first call money on 9800 shares @ ₹3/-made due)
7.	Bank A/c              ...Dr.		29,400
	To Equity Share First Call A/c			29,400
	(Being first call received)

Working Note:

No. of shares applied = `(12,000)/(10,000) xx240  "share"`

	240 × 2 = 480	(Received)
Less:	200 × 2 = 400	(Share Application)
	80	(Share Allotment)

 

Share Allotment due (200 × 3)	600
Less: Already received	80
Calls-in-arrears due	520