Page 25 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Accounting for Companies-I

Notes Working Note:
(i) In this problem allotment is on pro-rata basis. Therefore, Mr. Akash who was allotted 200
shares must have applied for:

Money received on 240 shares @ 20 each 48,00
App. money transferred to capital 200 × 20 4,000
Amount available for adjustment in allotment 800
Amount due on allotment on 200 shares 200 × 20 = 4,000
Amount already received with application 800
Amount not received on allotment 3200
(ii) Total amount receivable on allotment 1,00,000 × 20 = 20,00,000
Received with application 20,000 × 20 = 4,00,000
16,00,000
Not paid by Akash 3,200
15,96,800

Example 5: Following are the excerpts from the balance sheet of Sushil Ltd. As on 31st
Dec. 2005
Liabilities:

Authorized Share Capital 90,00,000
Issued and subscribed:
400,000 Equity shares of 10 each fully paid up 40,00,000
2,00,000 10% Preference shares of 10 each fully paid up 20,00,000

Reserve and surplus:
Share premium 1,50,000
In January, 2006 the company issued to public 3,00,000 equity shares of 10 each at a discount of
5%. The amount per share was payable as follows:
With application 2.5
On allotment 4.5
On first and final call 2.5

The public applied for 2,70,000 shares only.
These were allotted in February 2006. The call was made in March 2006. All the money ware
received. Record the transactions relating to the issue in the books of company and draw the
balance sheet as it would appear after the collection of money.
Solution:
Sushil Limited Journal

Date Particulars L.F.
Jan. Equity Share Application Account Dr. 6,75,000
To Equity Share Capital Account 6,75,000
(Being application money transferred to share
capital account)
Feb. Equity Share Allotment Account Dr. 12,15,000 Contd...
Discount on Issue of Shares Account Dr. 1,35,000
To Equity Share Capital Account 13,50,000
LOVELY PROFESSIONAL UNIVERSITY
18 (Being allotment money due on 2,70,000
shares @ 4.5 each at a discount of 5%)
March Equity Share First and Final Call Account Dr. 6,75,000
To equity Share Capital Account 6,75,000
(Being first and final call money due on
2,70,000 shares @ 2.5 per share)
Share Premium Account Dr. 1,35,000
To Discount on Issue of Shares Account 1,35,000
(Being utilised share premium to write off the
discount on issue of shares)