Question

Alexia Limited invited applications for issuing 1,00,000 equity shares of ₹ 10 each at premium of ₹ 10 per share.

The amount was payable as follows:

On application ₹ 9 per share (Including premium ₹ 6 per share)

On allotment ₹ 8 per share (Including premium ₹ 4 per share)

On first and final call ₹ 3 per share.

Applications were received for 1,50,000 equity shares and allotment was made to the applicants as follows:

Category A: Applicants for 90,000 shares were allotted 70,000 shares.

Category B: Applicants for 60,000 shares were allotted 30,000 shares.

Excess money received on application was adjusted towards allotment and first and final call.

Shekhar, who had applied for 1200 shares failed to pay the first and final call. Shekhar belonged to category B.

Pass necessary journal entries for the above transactions in the books of Alexia Limited. Open calls in arrears and calls in advance account, wherever necessary.

Answer 1

Date	Particulars	L.F.	Amount (₹)	Amount (₹)
	Bank A/с    ...Dr.		13,50,000	-
	To Equity Share Application A/c		-	13,50,000
	(Being money received on application)
	Equity Share Application A/c    ...Dr.		13,50,000	-
	To Equity Share Capital A/c		-	3,00,000
	To Securities Premium A/c		-	6,00,000
	To Equity Share Allotment A/c		-	4,20,000
	To Calls in advance A/c		-	30,000
	(Being application money adjusted)
	Equity Share Allotment A/c    ...Dr.		8,00,000	-
	To Equity Share Capital A/c		-	4,00,000
	To Securities Premium A/c		-	4,00,000
	(Being amount due on allotment)
	Bank A/c    ...Dr.		3,80,000	-
	To Equity Share Allotment A/c		-	3,80,000
	(Being amount received on allotment i.e. ₹ 8,00,000 – ₹ 4,20,000)
	Equity Share First and Final Call A/c    ...Dr.		3,00,000	-
	To Equity Share Capital A/c		-	3,00,000
	(Being amount due on first and final call)
	Bank A/c (3,00,000 – 30,000 – 1,200)    ...Dr.		2,68,800	-
	Calls in Advance A/c    ...Dr.		30,000	-
	Calls in Arrears A/с    ...Dr.		1,200	-
	To Equity Share First and Final Call A/c		-	3,00,000
	(Being amount after calls in arears received)

Working Note:

1. Calculation of Amount Unpaid by Shekhar:

Shares Applied by Shekhar = 1,200

Shares allotted to Shekhar = `1,200xx(30,000)/(60,000)` = 600

Excess application money paid by Shekhar = (1,200 – 600) × 9 = ₹ 5,400

Allotment due (600 × 8) = 4,800

Less: Adjusted Excess application money = 4,800

Allotment due after adjustment = NIL

First and Final call due (600 × 3) = 1,800

Less: Remaining amount adjusted (₹ 5,400 – ₹ 4,800) = 600

Calls in Arrears = ₹ 1,200

2. Total Excess Application Money = (90,000 – 70,000) × 6

(Category A) = ₹ 1,80,000 to be adjusted on allotment

3. Total Excess Application Money = (60,000 – 30,000) × 9

(Category B) = ₹ 2,70,000

Allotment due (30,000 × 8) = ₹ 2,40,000

Less: Adjusted Excess application money = ₹ 2,40,000

Amount due on allotment = NIL

First and Final Call due (30,000 × 3) = ₹ 90,000

Less: Remaining excess adjusted = 30,000 (Calls in advance)

To be received from Category (B) = ₹ 60,000