Page 75 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Accounting for Companies-I

Notes 4. Balance Sheet of Seema Limited as on.................
Liabilities Amount Assets Amount
Share Capital: Fixed assets:
Issued & subscribed: 1,00,00,000 Current Assets: 1,09,75,500
(1,00,000 equity shares of 100 each 10,01,000 Bank Balance 30,000
fully paid up). 4,500 Miscellaneous

Reserve & Surplus: Expenditure:
Share premium Expenses on issue of shares
Capital reserved (2,000 + 2,500)
1,10,05,500 1,10,05,500

Task Over-confident Co. Ltd. issued a prospectus offering 2,00,000 shares of 10 each on
the following terms:
On application Re. 1 per share.
On allotment 3 per share (including premium of 2)
On first call (three months after allotment) 4 per share.
On second call (three months after first call) 4 per share.
Subscriptions were received for 3,17,000 shares on 23rd April and allotment was made on
30th April as under:
Shares allotted

(i) Allotment in full (two applicants paid in full on allotment in respect of 4,000
shares each.) 38,000

(ii) Allotment of two-third of shares applied for 1,60,000
(iii) Allotment of one-fourth of shares applied for 2,000
Cash amounting to 31,000 (being application money received with applications for
31,000 shares upon which no allotments were made) was returned to the applicants on 5th
May. The amounts due were received on the due dates with the exception of final call on
100 shares. These shares were forfeited on 15th November and reissued to Varun on the
16th November for payment of 9 per share. The company paid the interest due on calls-
in-advance on 31st October in cash. Show the journal and cash book entries and draw a
balance sheet of the company giving effect to the above transactions.

Self Assessment

True or False:

6. If a company has a reputation in the market, there is a possibility that shares applied for
would be more than what the company proposes to issue.

7. In case of difficulty, calculating the amount of arrears on allotment and forfeited amount,
on shares are not allotted the basis of pro-rata.

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