Co. Ltd. issued 20,000 shares of Rs. 10 each payable as Rs. 2 on application, Rs. 3 on allotment, Rs. 2 on first call and Rs. 3 of final call. Applications were received for 25,000 shares and directors decided to make allotment on pro-rata basis to all applicants All money was duly received except a shareholder who was allotted 400 shares failed to pay allotment and calls money. Give journal entries for above transactions.
Answers
1. Bank a/c. Dr. 50000
To share application a\c 50000
2. Share application a/c. Dr. 50000
To eq. share capital. 40000
To share allotment. 10000
3.Share allotment a/c. Dr. 60000
To eq. share capital. 60000
4. Bank a/c. Dr. 49000
Calls in arrears. a/c. Dr. 1000
To eq. share allotment. 50000
(Shareholders alloted 400 share then he applied for 500 share means his 100 share has advance application money (100×2=200) and he fail for pay allotment on 400 share (400×3=1200) so calls in arrears (1200-200 =1000))
5.Share first call a/c. Dr. 40000
To eq. share capital. 40000
6. Bank a\c. Dr. 39200
Calls in arrears a/c. Dr. 800
To share first call a/c. 40000
7. Share final call a/c. Dr. 60000
To eq. share capital. 60000
8. Bank a/c. Dr. 58800
Calls in arears a/c. Dr. 1200
To share final call a/c. 60000