Question

A company was registered with an authorised capital of ₹ 10,00,000 divided into 7,500 Equity Shares of ₹ 100 each and, 2,500 Preference Shares of ₹ 100 each. 1,000 Equity and 500; 9% Preference Shares were offered to public on the following terms-
Equity Shares payable
₹ 10 on application, ₹ 40 on allotment and the balance in two calls of ₹ 25 each. Preference Shares are payable ₹ 25 on application, ₹ 25 on allotment and ₹ 50 on first and final call. All the shares were applied for and allotted. Amount due was duly received. Prepare Cash Book and pass necessary journal entries to record the above issue of shares and show how the Share Capital will appear in the Balance Sheet.

Answer 1

Explanation:

Equity share capital= 75000 x 100 = Rs 7,50,000

Preference share capital = 25000 x 100 = Rs 2,50,000