Question

Modern Dairies Ltd. was registered with an authorised capital of ₹ 10,00,000 divided into 7,500 Equity Shares of ₹ 100 each and 2,500 Preference Shares of ₹ 100 each. 1,000 Equity Shares and 500; 9% Preference Shares were offered to public on the following terms - Equity Shares payable ₹ 10 on application, ₹ 40 on allotment and the balance in two calls of ₹ 25 each. Preference Shares are payable ₹ 25 on application, ₹ 25 on allotment and ₹ 50 on first and final call. All the shares were applied for and allotted. Amount due was duly received.

You are required to prepare Cash Book, pass necessary Journal entries and show share capital in the Balance Sheet.

Answer 1

Cash Book
Dr. Particulars	₹	Cr. Particulars	₹
To Equity Shares Application A/c	10,000	By Balance c/d	1,50,000
To 9% Preference Shares Application A/c	12,500
To Equity Shares Allotment A/c	40,000
To 9% Preference Shares Allotment A/c	12,500
To Equity Shares First Call A/c	25,000
To Equity Shares Second and Final Call A/c	25,000
To 9% Preference Shares First and Final Call A/c	25,000
Total	1,50,000	Total	1,50,000

 

Journal Entries
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
1.	Equity Shares Application A/c   ...Dr.		10,000
	9% Preference Shares Application A/c   ...Dr.		12,500
	To Equity Share Capital A/c			10,000
	To 9% Preference Share Capital A/c			12,500
	(Application money transferred to respective Share Capital Accounts)
2.	Equity Shares Allotment A/c   ...Dr.		40,000
	9% Preference Shares Allotment A/c   ...Dr.		12,500
	To Equity Share Capital A/c			40,000
	To 9% Preference Share Capital A/c			12,500
	(Allotment money due)
3.	Equity Shares First Call A/c   ...Dr.		25,000
	To Equity Share Capital A/c			25,000
	(First Call money due on Equity Shares)
4.	Equity Shares Second and Final Call A/c   ...Dr.		25,000
	To Equity Share Capital A/c			25,000
	(Second and Final Call money due on Equity Shares)
5.	9% Preference Shares First and Final Call A/c Dr.		25,000
	To 9% Preference Share Capital A/c			25,000
	(First and Final Call money due on Preference Shares)

 

Balance Sheet
Particulars	Note No.	₹
EQUITY AND LIABILITIES
Shareholders' Funds
Share Capital	1	1,50,000

 

Notes to Accounts
Particulars	₹
Note 1: Share Capital
Authorised Capital:
7,500 Equity Shares of ₹ 100 each	7,50,000
2,500 9% Preference Shares of ₹ 100 each	2,50,000
Total Authorised Capital	10,00,000
Issued, Subscribed and Fully Paid-up Capital:
1,000 Equity Shares of ₹ 100 each	1,00,000
500 9% Preference Shares of ₹ 100 each	50,000
Total Share Capital	1,50,000