A company made an issue of 30,000 shares of 10 each, payable 33 on application,
5 on allotment and 2 on call. A total of 93,200 shares were applied for and owing
to this heavy over-subscription allotments were made as follows:
Applicants for 21,500 in respect of applications for 2,000 or more) received
10,200 shares. Applicants for 50,000 (in respect of application for 1,000 or more
but less than 2,000) received 12,600 shares. Applicants for 21,100 (in respect of
applications for less than 1,000) received 7,200 shares. Cash then received after
satisfying amount due on application was applied towards allotment and call money
and
any balance was returned. All money due on allotment and call were realised.
Give journal entries including that of cash and write up the cash account and ledger
accounts relating to this issue of shares in the books of the company
Answers
Following are the journal entries for this question:
1. Bank a/c dr. 2,79,600
to share application a/c 2,79,600
(being application money received)
2. Share application a/c dr. 2,79,600
to share capital a/c 90,000
to bank a/c 25,800
to share allotment a/c 1,32,900
to calls-in-advance a/c 30,900
(being money received on application transferred to share capital)
3. Share allotment a/c dr. 1,50,000
to share capital a/c 1,50,000
(being share allotment money due)
4. Bank a/c dr. 17,100
to share allotment a/c 17,100
(being money due on allotment received)
5. Final a/c dr. 60,000
to share capital a/c 60,000
(being final call money due)
6. Bank a/c dr. 29,100
to final call a/c 29,100
(being final call money received)
7. Calls-in-advance a/c dr. 30,000
to final call a/c 30,000
(being calls-in-advance transferred)