Question

Software solution India Ltd inviting application for 20,000 equity share of Rs 100 each, payable Rs 40 on application, Rs 30 on allotment and Rs 30 on call. The company received applications for 32,000 shares. Application for 2,000 shares were rejected and money returned to Applicants. Applications for 10,000 shares were accepted in full and applicants for 20,000 share allotted half of the number of share applied and excess application money adjusted into allotment. All money received due on allotment and call. Prepare journal and cash book.

Answer 1

For Software solution India Ltd the journal and cash book entries are in the attachment below :  

 

Concept :  

Equity shares mean that part of the share capital of the company which are not preference shares.They are  entitled to dividend only after preferential shareholders and they can get their capital back only after paying off preference shareholders. Equity shareholders have voting rights and they control the affairs of the company.

Calls :  

When the whole amount on shares is not paid on application and allotment, the unpaid amount may be called by directors in one or more installments after allotment. Such installments are known as calls.

Hope this answer will help you..

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