Page 30 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

2006

May 11

To Share Application Account
(Being receipt of application money on 1,00,000 shares
@ 5 each)

Share Application Account
5,00,000
Dr.
May 18
3,00,000

To Share Capital Account

2,00,000
To Share Premium Account
(Being transfer of application money to capital and share
premium account)
Share Allotment Account
Dr.

3,00,000
To Share Capital Account

3,00,000
(Being allotment money due on 100,000 shares @ 3 per
share)

Bank Account
June 30
2,97,000
Dr.

To Share Allotment Account
2,97,000
(Being receipt of allotment money on 99000 shares)
OR
2,97,000
Dr.

Bank Account
3,000
Call-in-Arrear Account

Dr.
To Share Allotment Account

3,00,000
(Being receipt of allotment money on 99,000 shares and
unpaid amount on 1000 shares transferred to calls-in-
arrear)

Sep. 30
2,00,000
Share First Call Account
Dr.

2,00,000
To Share Capital Account
(Being first call money due on 1,00,000 shares @ 2 each)
Either:

Dr.
Bank Account
1,98,000
To Share First Call Account
Bank Account Either: Dr. 5,00,000 5,00,000
1,98,000
(Being receipt of first call money on 99000 shares)
OR
Bank Account Dr. 1,98,000
Calls-in-Arrear Account Dr. 2,000
Unit 1: Share Capital – Issue of Shares
To Share First Call Account 2,00,000
(Being receipt of first call money on 99000 shares and
unpaid amount on 1,000 shares transferred to calls-in-
arrear)
Dec. 31 Share Second & Final Call Account Dr. 2,00,000 Notes
To Share Capital Account 2,00,000
(Being second & final call money due on 1,00,000 shares @
2 each)
Either:
Bank Account Dr. 1,97,200
To Share Second & Final Call Account 1,97,200
(Being receipt of second & final call on 98,600 shares)
OR
Bank Account Dr. 1,97,200
Calls-in-arrear A/c Dr. 2,800
To Second & Final Call Account 2,00,000
(Being receipt of second & final call and unpaid transferred
to calls-in-arrear account)

Example 7: On 1st January, 2006, XYZ Limited issued 5,000 equity shares of 100 each.
Payment on shares is to be made in following manner. Application fees of 2 were received on
1st Feb. 2006, while allotment fees of 3 were received on 1st March, 2006. First and final call of
6 were received on 1st July, 2006. Applications were received for 6,500 shares and directors
made allotment in full to the applicants demanding five or more shares and returned the money
to the applicants for 1,500 shares. One shareholder who was allotted 20 shares paid the first and
final call money with allotment money. Another shareholder did not pay allotment money on
his 30 shares but paid the same with first and final call. The directors have decided to charge and
allow interest, as the case may be, on calls-in-arrear and calls-in-advance, respectively according
to the provisions of Table A.
Journalise the transactions–
Solution:
XYZ Limited Journal
2006
Feb. 1 Bank Account Dr. 13,000
To Equity Share Application Account 13,000
(Being receipt of application money on 6,500 shares @
2 Per share)
Equity Share Application Account Dr. 13,000
To bank account 3,000
To Equity Share Capital Account 10,000
(Being application money transferred to share capital
and refund to 1500 unsuccessful applicants)
March 1 Equity Share Allotment Account Dr. 15,000
To Equity Share Capital Account 10,000
To Equity Share Premium Account 5,000
(Being allotment money due on 5000 share @ 3 each
including premium of Re 1 per share)
Bank Account Dr. 15,030
To Equity Share Allotment Account 14,910
To Calls-in-Advance Account 120
(Being receipt of allotment money on 4,970 shares and Contd...
calls-in-advance on 20 shares)
July 1 Equity Share First & Final Call Account Dr. 30,000
To equity share capital account 30,000
LOVELY PROFESSIONAL UNIVERSITY
(Being first and final call money due on 5,000 shares @ 23
6)
Bank Account Dr. 29,970
Calls-in-Advance Account Dr. 120
To Equity Share First & Final Call Account 30,000
To Equity Share Allotment Account 90
(Being receipt of first and final call money on 4,980
shares and allotment money on 30 share.)
Interest on Calls in Advance Account Dr. 2.4 2.4
To Bank Account
(Being payment of interest on calls-in-advance)
Bank Account Dr. 1.5
To Interest on Calls-in-Arrear Account 1.5
(Being interest on calls in arrear received)