Question

XYZ Ltd . is registered with an authorised capital of ₹ 2,00,000 divided into 2,000 shares of ₹ 100 each of which , 1,000 shares were offered for public subscription at a premium of ₹ 5 per share , payable as:

On application	---	₹ 10 per share,
On allotment	---	₹ 25 per share (including premium),
On first call	---	₹ 40 per share
On final call	---	₹ 30 per share

Applications were received for 1,800 shares, of which applications for 300 shares were rejected outright; the rest of the application were allotted 1,000 shares on pro rata basis. Excess application money was transferred to allotment.
All the money was duly received except from Sundar , holder of 100 shares, who failed  to pay allotment and first call money. His shares were later forfeited and reissued to Shyam at ₹ 60 per share ₹ 70 paid-up. Final call has not been made.
Pass necessary Journal entries and prepare Cash Book in the books of XYZ Limited. 

Answer 1

Authorised capital 2,000 shares of Rs 100 each.

Issued 1,000 shares of Rs 100 each at premium of Rs 5

Applied 1,800 shares 

Allotment made as:				Amount payable per shares as:
Applied		Allotted		Application	Rs 10
1,500		1,000		Allotment	Rs 25	(20 + 5)
300		NIL		First Call	Rs 40
					Rs 75	Called-up
				Final Call	Rs 30
1,800		1,000			Rs 105

Books of XYZ Limited
Journal

Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Share Application A/c	Dr.		15,000
	To Share Capital A/c				10,000
	To Share Allotment A/c				5,000
	(Share application of 1,000 shares transferred to Share Capital, Rs 5,000 adjusted on allotment)
	Share Allotment A/c	Dr.		25,000
	To Share Capital A/c				20,000
	To Securities Premium A/c				5,000
	(Share allotment due on 1,000 shares at Rs 25 each including Rs 5 premium)
	Share First Call A/c	Dr.		40,000
	To Share Capital A/c				40,000
	(First call due on 1,000 shares at Rs 40 each)
	Securities Premium A/c	Dr.		500
	Share Capital A/c	Dr.		7,000
	To Share Forfeiture A/c				1,500
	To Share Allotment A/c				2,000
	To Share First Call A/c				4,000
	(100 shares of Rs 100 each Rs 70 called–up, forfeited for the non-payment of allotment and first call)
	Share Forfeiture A/c	Dr.		1,000
	To Share Capital A/c				1,000
	(100 shares of Rs 100 each re-issued at Rs 60 per share, Rs 70 paid-up)
	Share Forfeiture A/c	Dr.		500
	To Capital Reserve A/c				500
	(Balance in Share Forfeiture after re-issue transferred to Capital Reserve)

Cash Book

Dr.                                                                               Cr.

Date		Particulars	Bank Rs	Date	Particulars	Bank Rs
		Share Application	18,000		Share Application	3,000
		Share Allotment	18,000
		Share First Call	36,000
		Share Capital	6,000		Balance c/d	75,000
			78,000			78,000

Working Notes:

Number of share applied ny Sunder
= `1500/1000 xx 100`

= 150 Shares

Sunder 

Money received on application 150 × Rs 10	=	1,500
Money transferred to Share Capital 100 × Rs 10	=	1,000
Excess Money on application		500

 

Share allotment due 100 × Rs 25	=	2,500
Less: Excess money on application	=	500
Calls-in-Arrears on Allotment		2,000

Allotment 

Allotment due on all shares 1,000 × Rs 25	=	25,000
Less: Adjustment of excess money on application	=	5,000
		20,000
Less: Calls-in-Arrears by Sunder	=	2,000
Money received on allotment	=	18,000

Capital Reserve 

Share Forfeiture	Cr.	1,500
Less: Share Forfeiture	Dr.	1,000
Balance in Share Forfeiture after reissue		500

Capital Reserve = Balance in Share Forfeiture after re-issue

= Rs 500