Solution of unit 1

Issue of shares
Answer: 1
Journal entries in the books of the Q Ltd
Sr Date Particulars LF Debit Credit(Rs.)
No. (Rs.)
1 ? Bank A/c 3,00,000
………………………………….Dr
To share application A/c[50000x6] 3,00,000

2 ? Share Application 3,00,000

A/c……………………..Dr 2,00,000
To Share Capital A/c[50000x4] 1,00,000
To Securities premium A/c[50000x2]

3 ? Share allotment 200000

A/c………………………..Dr 200000
To Share Capital A/c[50000x4]

4 ? Bank A/c[50000-3000x4]………………… 188000

Dr 12000
Calls in arrears A/c…[3000x4]…………… 200000
Dr
To Share allotment A/c

5 ? Share 1st and final Call A/c [50000x2].Dr 100000

To Share Capital A/c 100000

6 ? Bank A/c[50000-4000x2]………………Dr 92,000

Calls in arrears A/c[4000x2] 8,000
………………....Dr 1,00,000
To Share 1st and final Call A/c

7 ? Share capital A/c[4000x10]………………… 40,000

Dr 20000
To calls in arrears A/c[3000x4+4000x2] 20000
To Share forfeiture A/c
[3000x4+1000x(4+4)]
8 ? Bank A/c[3000x8] 24000
………………………….Dr 6000
Share forfeiture A/c[3000x2] 30000
…………….....Dr
To share capital A/c

9 ? Share forfeiture A/c………………………Dr 6000

To Capital reserve A/c[3000x4-3000x2] 6000

Ans 2. Working
Category Share Share Application Disposition
application Allotment money received

----- ---------- ---------- -------- Share Share Calls in Bank

Capital allotment advance
A 21,500 10,200 64,500 30,600 33,900 --- ---
B 50,600 12,600 1,51,800 37,800 63,000 25,200 25,800
C 21,100 63,300 21,600 36,000 5,700 ---

Total 93,200 30,000 2,79,600 90,000 1,32,900 30,900 25,800

Journal entries in the books of the S Ltd
D Particulars LF Debit (Rs.) Credit (Rs.)
at No.
e
1 Bank A/c …………………………… Dr. 2,79,600
To Share Application A/c[93200x3] 2,79,600
2 Share Application A/c………………… 2,79,600
Dr. 90,000
To Share Capital[30000x3] 1,32,900
To Share Allotment A/c 30,900
To Calls in advance A/c 25,800
To Bank A/c
3 Share Allotment A/c………….Dr 1,50,000
To Share Capital[30,000x5] 1,50,000
4 Bank A/c………….Dr 17,100
To Share allotment 17,100
5 Share Final Call A/c ………….Dr. 60,000
To Share Capital[30000x2] 60,000
6 Bank A/c……………………….Dr 29,100
Calls in Advance A/c………….Dr 30,900
To Share Capital A/c 60,000

Ans. 3 Journal entries in the books of T Ltd.

Date Particulars LF Debit (Rs.) Credit (Rs.)
No.
1 Machinery A/c Dr. 10,000
To Vendor A/c 10,000
2 Vendor A/c Dr. 10,000
To Share Capital A/c 10,000
3 Goodwill A/c Dr. 5,000
To Share Capital A/c 5,000
4 Bank A/c …………………………………. Dr. 1,20,000
To Share Application A/c 1,20,000
5 Share Application A/c…………………….. Dr. 1,20,000
To Share Capital A/c 80,000
To Share Allotment A/c 20,000
To Bank A/c 20,000
6 Share Allotment A/c………………………..Dr. 6,00,000
To Share Capital A/c 1,20,000
To Securities premium A/c 4,80,000
7 Bank A/c……………………………………Dr. 5,56,800
Calls in Arrears A/c (WN 1) 23,200
To Share allotment A/c 5,80,000
8 Share 1st Call A/c………………………….. Dr. 1,20,000
To Share Capital A/c 1,20,000
9 Bank A/c……………………………………Dr. 1,12,800
Calls in arrears A/c………………………....Dr. 7,200
To Share 1st Call A/c 1,20,000
10 Share Capital A/c Dr. 12,800
Securities Premium A/c Dr. 19,200
To Calls in Arrears A/c 28,000
To Share Forfeiture A/c 4,000
11 Share 2nd and Final Call A/c……………… Dr. 76,800
To Share Capital A/c 76,800
12 Bank A/c…………………………………….Dr. 75,200
Calls in Arrears A/c………………………....Dr. 1,600
To Share 2nd and Final Call A/c 76,800
13 Share Capital A/c Dr. 8,000
To Calls in Arrears A/c 4,000
To Share Forfeiture A/c 4,000
 14 Bank A/c……………………………………Dr. 18,000
Share Forfeiture A/c Dr. 2,000
To Share Capital A/c 20,000
15 Share Forfeiture A/c Dr. 4,000
To Capital Reserve A/c 4,000

Working Money Received on Allotment & Calls in Arrears of Mr. Preet Rs.
Notes: Total money due
1 Less: Amt not paid by Preet 6,00,000
Shares Allotted Appl. (Pro Rata)
40,000 50,000
1,600 ? (50,000 x 1600 /40,000)
= 2000 shares
Allotment money due = 1600 x 15 = 24,000
Less: Excess App. Money = 400 x 2 = 8,00
Calls in Arrears 23,200
Bal. 5,76,800
Less: Excess App. money adjusted towards allot 20,000
5,56,800
2 Transfer of Net Gain to Capital Reserve
Forfeiture amt of Preet 4,000
Forfeiture of Meet (Partial Reissue)
800 shares Rs. 4000
So, for 400 shares ? (400 x 4000 / 800) 2,000
6,000
Less: Loss on reissue 2,000
Tr. to Capital Reserve 4,000

Solution 4 :- Journal entries in the books of X Ltd.

Particulars L.F. Debit Credit

1 Bank a/c Dr 4951800

To equity share application a/c 4951800

2 Equity share application a/c Dr 4951800

To equity share capital a/c 2700000
2250000
To equity share allotment a/c 1800
To bank a/c

3 Equity share allotment a/c Dr 4500000

To equity share capital a/c 2700000
1800000
To securities premium a/c

Bank a/c Dr 2250000

To equity share allotment a/c 2250000

Equity share final call a/c Dr 3600000

To equity share capital a/c 3600000

Bank a/c Dr 3597000

Calls in arrears a/c Dr 3000
To equity share final call a/c 3600000

Equity share capital a/c Dr 7500

To calls in arrears a/c 3000
 To share forefeiture a/c 4500

Bank a/c Dr 6750

Share forfeiture a/c Dr 750
To equity share capital a/c 7500

Share forfeiture a/c Dr 3750

To capital reserve a/c 3750
Working:-

Caterog Share Shares Alloted Application Disposition

y Applied Money
Received
Share Share Calls in Bank
Capital allotemnt advance
I 600 1800 1800
II 150000 150000 450000 450000
III 15000000 750000 4500000 2250000 2250000
Total 1650600 900000 4951800 2700000 2250000 1800

Ans 5. Journal Entries in the Books of C Lt.d

Date Particulars L.F. Debit (Rs.) Credit (Rs.)

? Bank A/c Dr. 60,00,000
To Equity Share Application A/c 60,00,000
? Equity Share Application A/c Dr. 60,00,000
To Share Capital A/c 40,00,000
To Share Allotment A/c 20,00,000
? Share Allotment A/c Dr. 40,00,000
To Share Capital A/c 40,00,000
? Bank A/c Dr. 19,85,000
Calls-in-Arrears A/c Dr. 15,000
To Share Allotment A/c 20,00,000
? Share first call A/c Dr. 60,00,000
To Share Capital A/c 60,00,000
? Bank A/c Dr. 59,55,000
Calls-in-Arrears A/c Dr. 45,000
To Share first call A/c 60,00,000
? Share 2nd final call A/c Dr. 60,00,000
To Share Capital A/c 60,00,000
? Bank A/c Dr. 59,55,000
Calls-in-Arrears A/c Dr. 45,000
To Share 2nd final call A/c 60,00,000
02/01/2018 Share Capital A/c Dr. 1,50,000
To Calls-in-Arrears A/c 1,05,000
To Share forfeiture A/c 45,000
15/01/2018 Bank A/c Dr. 60,000
Share forfeiture A/c Dr. 15,000
To Share Capital A/c 75,000
15/01/2018 Share forfeiture A/c Dr. 7,500
To Capital Reserve A/c 7,500
10/03/2017 Bank A/c Dr. 67,500
Share forfeiture A/c Dr. 7,500
To Share Capital A/c 75,000
10/03/2017 Share forfeiture A/c Dr. 15,000
To Capital Reserve A/c 15,000
WN1: Shares issued Share application
2,00,000 3,00,000
1,500 (?) =2,250 share
2250X20=45,000
Less:1500X20=30,000
Excess Money=15,000
1500x20=30,000
Less: Excess Money=15,000
Calls-in-arrears =15,000