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Eastern Company Limited , Having an Authorised Capital of ₹ 10,00,000 Divided into Shares of ₹ 10 Each , - Accountancy

Journal Entry
Ledger

Eastern Company Limited , having an authorised capital of ₹ 10,00,000 divided into shares of ₹  10 each , issued 50,000 shares at a premium of ₹  3 per share payable as follows:

 On Application  ₹ 3 per share;
 On Allotment (including premium)  ₹ 5 per share;
 On first call (due three months after allotment )and the balance as when required.  ₹ 3 per share; 

Applications were received for 60,000 shares and the directors allotted the shares as follows:
(i) Applicants for 40,000 shares received in full.
(ii) Applicants for 15,000 shares received an allotment of 8,000 shares.
(iii) Applicants for 5,000 shares received 2,000 shares on allotment , excess money being returned.
All amounts due on allotment were received.
The first call was made and the money was received except on 100 shares.
Give journal and cash book entries to record these transactions of the company . Also prepare the Balance Sheet of the company.

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Solution

Books of Eastern Company Limited

 

Date

Particulars

L.F.

Debit

Amount

(₹)

Credit

Amount

(₹)

  Share Application A/c

Dr.

 

1,80,000

 
    To Share Capital A/c    

1,50,000

    To Share Allotment A/c    

30,000

  (Share Application money for 50,000 shares transferred To Share Capital Account and the excess money transferred To Share Allotment Account)      
         
  Share Allotment A/c

Dr.

 

2,50,000

 
    To Share Capital A/c    

1,00,000

    To Share Premium A/c    

1,50,000

  (Allotment money due on 50,000 shares @ Rs 5 per share including Rs 3 security premium)      
         
  Share First Call A/c

Dr.

 

1,50,000

 
    To Share Capital A/c      

1,50,000

  (First call due on 50,000 shares @ Rs 3 per share)        

Cash Book (Bank Column)

Dr.                                                                                Cr.

Date

Particulars

J.F.

Amount

(₹)

Date

Particulars

J.F.

Amount

(₹)

  Share Application  

1,80,000

       
  Share Allotment  

2,20,000

  Balance c/d  

5,49,700

  Share First Call  

1,49,700

       
     

5,49,700

     

5,49,700

Eastern Company Limited
Balance Sheet

Particulars

Note No.

Amount 

(₹)

I. Equity and Liabilities    

1. Shareholders’ Funds

   

a. Share Capital

1

3,99,700

b. Reserves and Surplus

2

1,50,000

2. Non–Current Liabilities

   

3. Current Liabilities

   

Total

 

5,49,700

II. Assets    

1. Non–Current Assets

   

2. Current Assets

   

a. Cash and Cash Equivalents

3

5,49,700

Total

 

5,49,700

NOTES TO ACCOUNTS

Note No.

Particulars

Amount  

(₹)

1

Share Capital  
  Authorised Share Capital  
  1,00,000 shares of Rs 10 each

10,00,000

  Issued Share Capital  
   50,000 shares of Rs 10 each

5,00,000

  Subscribed, Called up and Paid up Share Capital  
   50,000 shares of Rs 10 each, Rs 8 called–up

4,00,000

 
   Less: Calls–in–Arrears

     (300)

3,99,700

2

Reserves and Surplus  
  Securities Premium

1,50,000

3

Cash and Cash Equivalents  
  Cash at Bank   5,49,700
  Is there an error in this question or solution?
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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 18 | Page 115
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