Question

Moneyplus Company issued for public subscription 75,000 shares of the value of Rs 10 each at a discount of 10% payable as follows: Rs 2 per share on an application, Rs 3 per share on an allotment and Rs 4 per share on call. The company received applications for 1,50,000 shares. The allotment was done as under:

a. Applicants of 15,000 shares were allotted 5,000 shares.
b. Applicants of 70,000 shares were allotted 40,000 shares.
c. Remaining applicants were allotted 30,000 shares.

Money in excess to allotment was returned. Hari, a shareholder who had applied for 3,500 shares out of group B failed to pay allotment and call money. Rohan, a shareholder who was allotted 3,000 shares paid the call money along with the allotment. Rohan also belonged to group B. Pass necessary journal entries to record the above transactions in the books of the company. Show your working notes clearly.

Answer 1

Journal
Date	Particulars	L.F.	Dr. Rs	Cr. Rs
	Bank A/c         Dr.        To Share Application A/c (Being application money on 1,50,000 shares received)		3,00,000	3,00,000
	Share application A/c     Dr.      To Share Capital A/c      To Share Allotment A/c (WN1)      To Bank A/c (WN1) (Being share Application money on 75,000 shares transferred to share capital account and excess was utilized on an allotment and balance excess money refunded)		3,00,000	1,50,000 1,45,000 5,000
	Share Allotment A/c         Dr. Discount on Issue of Shares A/c      Dr.      To Share capital A/c (Being allotment money due on allotment)		2,25,000 75,000	3,00,000
	Bank A/c (2,25,000 – 1,45,000 – 3,000 + 12,000)    Dr.     To Share Allotment A/c (2,25,000 – 1,45,000 – 3,000)     To Calls-in-Advance A/c (Being allotment money received along with advance call money on 3,000 shares and Rs 1,45,000 excess money adjusted)		89,000	77,000 12,000
	Share Call A/c        Dr.      To Share Allotment A/c (Being share Call Money due)		3,00,000	3,00,000
	Bank A/c (3,00,000 – 8,000 – 12,000)         Dr. Calls-in-Advance A/c        Dr.     To Share capital A/c (Being share call money received and Calls-in-Advance money adjusted)		2,80,000 12,000	2,92,000

Working Note:

WN1:

 

1	2	3	4	5	6	7	8
Category	Shares Applied	Shares Allotted	Money Receive on application at Rs 2 each	Excess money Received on application	Excess money received on application	Excess Amount on application utilised on Allotment at Rs 3 each	Excess Amount on application to be returned
a	15,000	5,000	30,000	10,000	20,000	15,000	5,000
b	70,000	40,000	1,40,000	80,000	60,000	60,000
c	65,000	30,000	1,30,000	60,000	70,000	70,000
Total	1,50,000	75,000	3,00,000	1,50,000	1,50,000	1,45,000	5,000 (Refunded)

WN2 Calculation of Unpaid Amount o Allotment by Hari

Number of shares applied by Hari = 3500 shares

∴ Number of shares allotted to Hari = `3500/70000 xx 40000 = 2000` Shares

Amount Received on application (3,500 shares × Rs 2)	7,000
Less: Utilised on application (2,000 Shares × Rs 2)	(4,000)
Excess amount received on application	3,000

 

Amount due on the allotment (2,000 shares × Rs 3)	6,000
Less: Excess amount received on an application	(3,000)
Amount unpaid on Allotment by Hari	3,000