Question

(Call in arrears and Balance Sheet)
The Alfo Ltd. made an issue of 10,000 shares of Rs 20 each payable as follows-

Application	Rs 5	Allotment	Rs 10
First Call	Rs 2	Final Call	Rs 3

The company received applications for 15,000 shares of which applications for 5,000 shares were rejected and money refunded. The directors made all the calls. One share holders, holding 100 shares failed to pay first and final call. The expenses of issue amounted to Rs 5,000 . Pass journal entries and show the Balance Sheet.
Note: Expenses on issue should be shown as asset. Every year certain amount of expenses should be charged to P&L A/c.

Answer 1

Share Applied	Share Allotted
15,000	10,000

                                          Journal Entry

Date	Particulars	L.F.	Debit Amount (Rs.)	Credit Amount (Rs.)
	Bank A/c                                Dr.    To Share Application A/c (Share application received on 15,000 shares of Rs 5 each)		75,000	75,000
	Share Application A/c            Dr.   To Share Capital A/c    To Bank A/c (Share application transferred to Share Capital A/c and Share Application on 5,000 shares has been refunded)		75,000	50,000 25,000
	Share Allotment A/c              Dr.     To Share Capital A/c (Share allotment due on 10,000 shares of Rs. 10 each)		100,000	100,000
	Bank A/c                                Dr.   To Share Allotment A/c (Share allotment received)		100,000	100,000
	Share First Call A/c                Dr.      To Share Capital A/c (Share first call due on 10,000 shares of Rs 2 each)		20,000	20,000
	Bank A/c                               Dr. Call-in-Arrears A/c                Dr.        To Share First Call A/c (Share first call received on 9,800 shares of Rs. 3 each)		30,000	30,000
	Bank A/c                                Dr. Calls-in-Arrears A/c               Dr.     To Share Final Call A/c (Share final call received on 9,700 shares of Rs. 3 each)		29,700 300	30,000
	Share Issue expenses A/c       Dr.    To Bank A/c (Expenses on issue of shares paid)		5,000	5,000

                                 Balance Sheet of Alfo Ltd.

Liabilities		Amount (Rs.)	Assets	Amount (Rs.)
Issued and Paid-up Capital 10,000 shares of Rs. 20 each	200,000	199,500	Cash at Bank Miscellaneous Expenditure	194,500
(-) Calls-in-Arrears	500		Expenses on Issue	5,000
		199,500		199,500