Question

X Ltd. issued 40,000 equity shares of ₹10 each at a premium of 20%. The amount was payable as follows:

On application	₹3 per share
On allotment	₹5 per share (including premium)
On first call	₹2 per share
On final call	₹2 per share

The issue was over subscribed. ‘A’, who applied for 900 shares and was allotted 600 shares paid the entire share money with application. At the time of transfer of share application money, ‘Calls in Advance Account’ will be:

Options

• Credited with ₹6,000

• Debited with ₹2,400

• Credited with ₹2,400

• Credited with ₹3,600

Answer 1

Credited with ₹2,400

Explanation:

A applied 900, allotted 600

Refund for 300 shares = 300 × ₹12 = ₹3,600

Amount retained = 900 × ₹12 − 3,600 = ₹7,200

Transfer of application: to Share Capital (600 × ₹3) = ₹1,800; to Allotment (600 × ₹5) = ₹3,000.

Balance = 7,200 − 1,800 − 3,000

= ₹2,400