Question

A Co Ltd. was registered with a nominal capital of ₹ 1,00,000 in Equity Shares of ₹ 10 each. It offered to the public 6,000 shares for subscription. The applications were received for 8,000 shares. The Directors rejected applications for 1,000 shares and returned the money received thereon. The application money received on the other 1,000 shares was adjusted towards allotment money. The amount payable on shares was: ₹ 2 per share on application, ₹ 4 per share on allotment and the balance on first call. One shareholders holding 100 shares failed to pay the first call money and as a result his shares were forfeited.
Pass necessary journal entries and prepare Cash Book to record the above transactions.

Answer 1

Authorized capital 10,000 equity share of rs 10 each

Issued capital share 6000

Applied capital share 8000

Allotment was as follows:

1. 6000 shares allotted to 7000 applicants

2.1000 applications rejected

$Payable as:\\On Application=2\\On Allotment=4\\On first call and final call=4\\Total =10$