Question

Rama Co. issued 50,000 shares of ₹10 each payable as follows:

• ₹3 on Application
• ₹3 on Allotment
• ₹2 on First Call
• ₹2 on Final Call

All the shares were subscribed and allotted. Give Journal entries and show how the Share Capital will appear in the Balance Sheet assuming that all sums have been duly received. Expenses on issue of shares amounted to ₹10,000.

Answer 1

Journal entries In the books of Rama Ltd
Date	Particulars	L.F.	Amount ₹	Amount ₹
1.	Bank A/c     ...Dr.		1,50,000
	To Equity Share Application A/c			1,50,000
	(Share application money received on 50000 shares @₹3 each)
2.	Equity Share Application A/c     ...Dr.		1,50,000
	To Equity Share Capital A/c			1,50,000
	(Application money transferred to share capital)
3.	Equity Share Allotment A/c     ...Dr.		1,50,000
	To Equity Share Capital A/c			1,50,000
	(Allotment made due on 50000 shares @₹3 each)
4.	Bank A/c     ...Dr.		1,50,000
	To Equity Share Allotment A/c			1,50,000
	(Received money on 50000 shares @₹3 each)
5.	Equity Share First Call A/c     ...Dr.		1,00,000
	To Equity Share Capital A/c			1,00,000
	(Share first call made due on 50000 shares @₹2 each)
6.	Bank A/c     ...Dr.		1,00,000
	To Equity Share First Call A/c			1,00,000
	(Share first call money received on 50000 shares @₹2 each)
7.	Equity Share Second and Final Call A/c     ...Dr.		1,00,000
	To Equity Share Capital A/c			1,00,000
	(Share second and final call made due on 50000 shares @ ₹ 2 each)
8.	Bank A/c     ...Dr.		1,00,000
	To Equity Share Second and Final Call A/c			1,00,000
	(Share second and final call money received)
9.	Share Issue Expenses A/c     ...Dr.		10,000
	To Bank A/c			10,000
	(Expenses on issue of shares)

 

Extract of Balance Sheet as at.....
Particulars	Note No.	Amount Current Year ₹	Amount Previous Year ₹
I. Equity And Liabilities:
Shareholder's Funds:
(a) Share Capital	1	5,00,000

Notes to Accounts

	₹
1 Share Capital
Authorised Capital
Issued Capital
50000 shares of ₹10 each	5,00,000
Subscribed Capital:
Subscribed and Fully Paid Capital
50000 shares of ₹10 each	5,00,000
	5,00,000