Question

Kanpur Gas Ltd. issued 40,000 equity shares of ₹10 each at a premium of ₹1 per share. Amounts were payable as follows:
₹2.50 on Application; ₹4.50 on Allotment (including premium); ₹2 on First Call and ₹2 on Final Call.
Applications were received for 37,000 shares.
Give Journal Entries and Balance Sheet, assuming that all sums have been received on due dates.

Answer 1

Journal entries In the books of Kanpur Gas Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Bank A/c     ...Dr.		92,500
	To Equity Share Application A/c			92,500
	(Application money received on 37000 shares @2.50 each)
2.	Equity Share Application A/c     ...Dr.		92,500
	To Equity Share Capital A/c			92,500
	(Application money received)
3.	Equity Share Allotment A/c     ...Dr.		1,66,500
	To Equity Share Capital A/c			1,29,500
	To Securities Premium Reserve A/c			37,000
	(Allotment made due on 40000 shares @4.50 including premium of 1)
4.	Bank A/c     ...Dr.		1,66,500
	To Equity Share Allotment A/c			1,66,500
	(Allotment money received)
5.	Equity Share First Call a/c     ...Dr.		74,000
	To Equity Share Capital A/c			74,000
	(Share first call made due on 40000 shares @2 each)
6.	Bank A/c     ...Dr.		74,000
	To Equity Share First Call A/c			74,000
	(Share first call money received)
7.	Equity Share Second and Final Call A/c     ...Dr.		74,000
	To Equity Share Capital A/c			74,000
	(Share second and final call made due on 40000 shares @2 each)
8.	Bank A/c     ...Dr.		74,000
	To Equity Share Second and Final Call A/c			74,000
	(Share second and final call money received)

 

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
(b) Reserve and Surplus	2	37,000
II. Assets:
Current Assets
Cash and Bank Balance	3	4,07,000

Notes to Accounts

	₹
1 Share Capital
Authorised Capital
Issued Capital
40000 shares of ₹10 each	4,00,000
Subscribed Capital:
Subscribed and Fully Paid Capital
37000 shares of ₹10 each	3,70,000
	3,70,000
2. Reserve and Surplus
Securities Premium	37,000
3. Cash and Bank Balance
Cash at Bank	4,07,000