Page 17 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Accounting for Companies-I

Notes Issue of Two Classes of Shares

Example 2: Surjeet Ltd. was incorporated on January 1, 2006. The authorised capital of
the company was 2,50,00,000 divided into 15,00,000 equity shares of 10 each and 1,00,000, 10%
preference shares of 100 each. The company issued 6,00,000 equity shares and 50,000 preferences
shares payable as follows:
 Equity shares: 3 on application, 3 on allotment, 2 on first call and 2 on second and final
call.

 Preference shares: 30 on allotment, 30 on allotment, 20 on first call and 20 on second
and final call.
All these shares were subscribed. Prepare cash book and journal assuming that all money was
duly received:
Solution:
Journal of Surjeet Ltd.
Date Particulars L.F. (Debit ) (Credit )
Equity Share Application Account Dr. 18,00,000
To Equity Share Capital Account 18,00,000
(Being transfer of application money to share capital account)
Preference Share Application Account Dr. 15,00,000
To Preference Share Capital Account 15,00,000
(Being transfer of application money to preference share capital account)
Equity Share Allotment Account Dr. 18,00,000
To Equity Share Capital Account 18,00,000
(Being allotment money due on 6,00,000 equity shares @ 3 per share)
Preference Share Allotment Account Dr. 15,00,000
To Preference Share Capital Account 15,00,000
(Being allotment money due on 50,000 Preference share @ 30 per share)
Equity Share First Call Account Dr. 12,00,000
To Equity Share Capital Account 12,00,000
(Being first call money due on 6,00,000 equity shares @ 2 per share)
Preference Share First Call Account Dr. 10,00,000
To Preference Share Capital Account 10,00,000
(Being first call money due on 50,000 preference share @ 20 per share)
Equity Shares Second & Final Call Account Dr. 12,00,000
To Equity Share Capital Account 12,00,000
(Being second and final call money due on 6,00,000 equity share @ 2 per share)
Preference Share Second & Final Call Account Dr. 10,00,000
To Preference Share Capital Account 10,00,000
(Being second and final call money due on 50,000 preference shares @ 20 per share)
Cash Book (Bank Column Only)
Date Particulars Date Particulars
To Equity Share
Application account 18,00,000 By Balance c/d 1,10,000
To Preference Share
Application Account 15,00,000
To Equity Share
Allotment Account 18,00,000
To Preference Share Contd...
Allotment Account 15,00,000
To Equity Share
First Call Account 12,00,000
10 To Preferences Share
LOVELY PROFESSIONAL UNIVERSITY
First Call Account 10,00,000
nd
To Equity Share 2
and Final Call Account 12,00,000
nd
To Pref. Share 2
and Final Call Account 10,00,000
1,10,00,000 1,10,00,000