Question

Saraswati and Sons Ltd., Nagpur invited applications for 50,000 equity shares of ₹ 10 each, payable as under:

On Application ₹ 3

On Allotment ₹ 3

On First and Final call ₹ 4

Applications were received for 50,000 shares. All the shares were allotted. All the money was duly received except First and Final call on 5000 shares, which were forfeited.

Pass Jounal Entries in Books of Saraswati and Sons Ltd.

Answer 1

In the books of Saraswati and Sons Ltd., Nagpur Journal Entries
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1	Bank A/c    ...Dr.		1,50,000	-
	To Equity share application A/c		-	1,50,000
	(Being application money received on 50,000 equity shares @ ₹ 3 per share)
2	Equity share application A/c    ...Dr.		1,50,000	-
	To Equity Share Capital A/c		-	1,50,000
	(Being Equity share application money transferred to Equity share Capital A/c)
3	Equity share Allotment A/c    ...Dr.		1,50,000	-
	To Equity Share Capital A/c		-	1,50,000
	(Being allotment money due on 50,000 equity shares @ ₹ 3 per share)
4	Bank A/c    ...Dr.		1,50,000	-
	To Equity share allotment A/c		-	1,50,000
	(Being allotment money received on 50,000 equity shares @ ₹ 3 per share)
5	Equity share first and final call A/c    ...Dr.		2,00,000	-
	To Equity Share Capital A/c		-	2,00,000
	(Being first and final call money due on 50,000 equity shares @ ₹ 4 per share)
6	Bank A/c    ...Dr.		1,80,000	-
	To Equity share first and final call A/c		-	1,80,000
	(Being first and final call money received on 45,000 equity shares)
7	Equity share Capital A/c    ...Dr.		50,000	-
	To Equity share first and final call A/c		-	20,000
	To Share forfeiture A/c		-	30,000
	(Being 5,000 equity shares forfeited on non-payment of first and final call)
	Total		10,30,000	10,30,000

Working note:

Equity shares issued and subscribed: 50,000

Application amount received = 50,000 × ₹ 3 = ₹ 1,50,000

Allotment amount received = 50,000 × ₹ 3 = ₹ 1,50,000

1st and final call called-up = 50,000 × ₹ 4 = ₹ 2,00,000

Received = 45,000 × ₹ 4 = ₹ 1,80,000

Calls-in-arrears = 5,000 × 4 = ₹ 20,000