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Bharat Ltd. Was Incorporated with a Capital of ₹ 2,00,000 Divided into Shares of ₹ 10 Each. 2,000 Shares - Accountancy

Journal Entry
Ledger

Bharat Ltd. was incorporated with a capital of ₹ 2,00,000 divided into shares of ₹ 10 each. 2,000 shares were offered for subscription and out of these, 1,800 shares were applied for and allotted. ₹ 3 per share (including ₹ 1 premium) was payable on application, ₹ 4 per share (including ₹ 1 premium) on allotment, ₹ 2 per share on first call and ₹ 3 per share on final call. All the money was received. Give necessary Journal entries and show share capital in the Balance Sheet.

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Solution

Authorised Capital 20,000 shares of ₹ 10 each

Issued Capital 2,000 shares

Applied 1,800 shares

Payable as:

 

 

 

Application

3

(2+1)

Allotment

4

(3+1)

First Call

2

 

Final Call

3

 

 

 

12

(10+2)

Books of Bharat Limited
Journal 

Date

Particulars

L.F.

Debit
Amount
(₹)

Credit
Amount
(₹)

 

Bank A/c

Dr.

 

5,400

 

 

To Share Application A/c

 

 

5,400

 

(Application money received for 1,800 shares at Rs 3 per shares)

 

 

 

 

 

 

 

 

 

Share Application A/c

Dr.

 

5,400

 

 

To Share Capital A/c

 

 

3,600

 

To Securities Premium A/c

 

 

1,800

 

(Application money of 1,800 share transferred to Share Capital at Rs 2 per share and Securities Premium Re 1 per share)

 

 

 

 

 

 

 

 

 

Share Allotment A/c

Dr.

 

7,200

 

 

To Share Capital A/c

 

 

5,400

 

To Securities Premium A/c

 

 

1,800

 

(Share allotment due on 1,800 shares at Rs 4 per share including Re 1 securities premium)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

7,200

 

 

To Share Allotment A/c

 

 

7,200

 

(Share Allotment money received)

 

 

 

 

 

 

 

 

 

Share First Call A/c

Dr.

 

3,600

 

 

To Share Capital A/c

 

 

3,600

 

(Share first call due on 1,800 shares at Rs 2 per shares)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

3,600

 

 

To Share First Call A/c

 

 

3,600

 

(Share first call money received)

 

 

 

 

 

 

 

 

 

Share Final Call A/c

Dr.

 

5,400

 

 

To Share Capital A/c

 

 

5,400

 

(Share final call due on 1,800 shares at Rs 3 per share)

 

 

 

 

 

 

 

 

 

Bank A/c

 

5,400

 

 

To Share Final Call A/c

Dr.

 

 

5,400

 

(Share final call money received)

 

 

 

As per the Schedule III of Companies Act, 2013, the Company's Balance Sheet is presented as follows.

Bharat Limited
An extract of Balance Sheet

Particulars

Note No.

Amount

(₹)

I. Equity and Liabilities

 

 

1. Shareholders’ Funds

 

 

a. Share Capital

1

18,000

NOTES TO ACCOUNTS

Note No.

Particulars

Amount

(₹)

1

Share Capital

 

 

Authorised Share Capital

 

 

20,000 shares of Rs 10 each

2,00,000

 

Issued Share Capital

 

 

 2,000 shares of Rs 10 each

20,000

 

Subscribed, Called-up and Paid-up Share Capital

 

 

1,800 shares of Rs 10 each 

18,000

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APPEARS IN

TS Grewal Class 12 Accountancy - Double Entry Book Keeping Volume 2
Chapter 1 Accounting for Share Capital
Exercise | Q 12 | Page 115
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