Srijan Limited issued ₹10,00,000 new capital divided into 100 shares at a premium of
20 per share, payable as under:
On Application : ₹10 per share
On Allotment : ₹40 per share (including ₹10 premium)
On First and Final Call : Balance
Overpayments on applications were to be applied towards sums due on allotment and
first and final call. Where no allotment was made, money was to be refunded in full. The
issue was oversubscribed to the extent of 13,000 shares. Applicants for 12,000 shares
were allotted only 2,000 shares and applicants for 3,000 shares were sent letters of regret
and application money was returned to them. All the money due was duly received.
Compute the amount transferred to share capital a/c, share allotment a/c, share call a/c,
and total amt refunded. Also pass the journal entry for the same.

Dear Student
                                                                                        Srijan Ltd.

Journal

Date

Particulars

 

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

 

 

 

 

 

 

 

Bank A/c (23,000 shares × Rs 10)

Dr.

 

2,30,000

 

 

  To Equity Share Application A/c

 

 

 

2,30,000

 

(Share application money received for 23,000 shares at Rs 10 each)

 

 

 

 

 

 

 

 

 

 

 

Equity Share Application A/c

Dr.

 

2,30,000

 

 

  To Share Capital A/c

 

 

 

1,00,000

 

  To Share Allotment A/c

 

 

 

80,000

 

  To Share First and Final Call A/c

 

 

 

20,000

 

  To Bank A/c

 

 

 

30,000

 

(Share application money on 10,000 shares transferred to share capital, 3,000 shares money were refunded and the balance adjusted on allotment and first & final call)

 

 

 

 

 

 

 

 

 

 

 

Share Allotment A/c

Dr.

 

4,00,000

 

 

To Securities Premium A/c

 

 

 

1,00,000

 

  To Share Capital A/c

 

 

 

3,00,000

 

(Allotment money due)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c (4,00,000 – 80,000)

Dr.

 

3,20,000

 

 

  To Share Allotment A/c

 

 

 

3,20,000

 

(Share allotment money received after adjustment of excess application money)

 

 

 

 

 

 

 

 

7,00,000

 

 

Share First and Final Call A/c

Dr.

 

 

1,00,000

 

  To Securities Premium A/c

 

 

 

6,00,000

 

To Share Capital A/c

 

 

 

 

 

(Share first and final call due)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c (7,00,000 – 20,000)

Dr.

 

6,80,000

 

 

  To Share First and Final Call A/c

 

 

 

6,80,000

 

(Share first and final call received after adjustment of excess application money)

 

 

 

 


Thus the amount transferred to share capital A/c = 100000 + 300000 + 600000 = 1000000
Share  allotment a/c = 400000
Share final A/c = 700000
total amount refunded = 3000 x 10 = 30000

Working Note:

Computation Table

1

2

3

4

5

6

7

8

9

Category

Shares Applied

Shares Allotted

Money Received on application at Rs 10 each

Application Money transferred to Share Capital at Rs 10 each

Excess money received on application

Amount utilised on allotment at Rs 40 each

Amount utilised on First & Final Call

Bank

(Refund)

I

12,000

2,000

1,20,000

20,000

1,00,000

(1,20,000 – 20,000)

80,000

(2,000 × 40)

20,000

(1,00,000 – 80,000)

 

II

3,000

Nil

30,000

 

 

 

 

30,000

III

8,000

8,000

80,000

80,000

 

 

 

 

Total

23,000

10,000

2,30,000

1,00,000

1,00,000

80,000

20,000

30,000

 

 

 

 

 

 

 

 

 



Regards
 

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