Question

A company invited applications for 50,000 shares of 10 each on the following terms
3
2
5
On application
On allotment
On first and final call
Applications were received for 1,10,000 shares. It was decided (1) to refuse allotment to the applications
for 10,000 shares (ii) to allot 50 percent to Mr. Black who applied for 20,000 shares (i) to allot in full to Mr.
Brown who applied for 10,000 shares (iv) to allot balance of available shares equitably among the other
applicants and (v) to utilise excess application money in part payment of allotment and final call.
Give journal entries till the stage of allotment assuming that the entire sum due on allotment is received
in full.​

Answer 1

Explanation:

A Company invited applications for 50,000 equity shares of Rs. 10 each on the following terms : On application Rs. 3, On allotment Rs. 2 and on Ist and Final call Rs. 5 Applications were received for 1,10,000 shares. It was decided : <br> (i) To refuse allotment to the applicants for 10,000 shares, <br> (ii) To allot 50% to Mr. X who has applied for 20,000 shares, <br> (iii) To allot in ful to Mr. Y who applied for 10,000 shares, <br> (iv) To allot balance of the available shares pro-rata among the other applications, and <br> (v) To utilise excess application money in part payment of allotment and final call. <br> Give journal entries assuming that the entire sum due is received in full. Call is made after two months of allotment and 6% p.a