Page 35 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Accounting for Companies-I

Notes Total application were received for 100,000 shares and allotment was made as:
Applicants for 10,000 shares (in respect of applications for 2,000 or more) received 5,000 shares.
Applicants for 40,000 shares (in respect of applications for 1,000 or more) received 8,000 shares.
Applicants for 50,000 shares (in respect of applications for less than 500 shares) received 47,000
shares.
Excess application money was utilised for the payment of allotment and call and balance was
returned. All money due on allotment and call was received. Make the necessary journal entries
and show the relevant ledger accounts.
Solution:
Working Note:

Analytical Table for Adjustment of Excess Application Money

X Y Ltd. Journal Entries

1. Bank Account Dr. 25, 00,000
To Equity Share Application Account 25,00,000
(Being receipt of application money on 1,00,000 shares
@ 25 per share)
2. Equity Share Application Account Dr. 2,00,000
To Bank Account 2,00,000
(Being the refund of application money for 8000 shares
@ 25 per share)
3. Equity Share Application Account Dr. 15,00,000
To Equity Share Capital Account 15,00,000
(Being share application money transferred to share
capital a/c)
4. Equity Share Application Account Dr. 8,00,000
To Equity Share Allotment Account 6,00,000
To Calls-in-Advance Account 2,00,000
(Being utilisation of excess application money in
allotment and calls-in-advance)
5. Equity Share Allotment Account Dr. 30,00,000
Contd...
To Equity Share Capital Account 30,00,000
(Being allotment money due on 60,000 shares @ 50 per
share)
28 6. Bank Account Dr. 24,00,000
LOVELY PROFESSIONAL UNIVERSITY
To Equity Share Allotment Account 24,00,000
(Being the receipt of balance of allotment money)
7. Equity Share First and Final Call Account Dr. 15,00,000
To Equity Share Capital Account 15,00,000
(Being first and final call due on 60,000 shares @ 25
per share)
8. Bank Account Dr. 13,00,000
Call-in-Advance Account Dr. 2,00,000
To Equity Share First and Final Call A/c 15,00,000
(Being calls-in advance adjusted and balance of call
money received)