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    Issue of Shares

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    SNEHA GUIN
    The document discusses nine questions related to the issue of shares by various companies. Journal entries are required to be passed for transactions such as share application, allotment, calls and related receipts and payments. Standard journal entries would include debiting bank for share application money received, crediting share application account and later share capital account. Similarly, entries would be passed for allotment, premium or discount, calls made, money received against calls, forfeiture and reissue of shares.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Issue of Shares

    Uploaded by

    SNEHA GUIN
    20 views11 pages
    The document discusses nine questions related to the issue of shares by various companies. Journal entries are required to be passed for transactions such as share application, allotment, calls and related receipts and payments. Standard journal entries would include debiting bank for share application money received, crediting share application account and later share capital account. Similarly, entries would be passed for allotment, premium or discount, calls made, money received against calls, forfeiture and reissue of shares.

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    ISSUE OF SHARES

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    The document discusses nine questions related to the issue of shares by various companies. Journal entries are required to be passed for transactions such as share application, allotment, calls and related receipts and payments. Standard journal entries would include debiting bank for share application money received, crediting share application account and later share capital account. Similarly, entries would be passed for allotment, premium or discount, calls made, money received against calls, forfeiture and reissue of shares.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    20 views11 pages

    Issue of Shares

    Uploaded by

    SNEHA GUIN
    The document discusses nine questions related to the issue of shares by various companies. Journal entries are required to be passed for transactions such as share application, allotment, calls and related receipts and payments. Standard journal entries would include debiting bank for share application money received, crediting share application account and later share capital account. Similarly, entries would be passed for allotment, premium or discount, calls made, money received against calls, forfeiture and reissue of shares.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 11

    (Q.1) Jayesh LTD issued 20,000 shares of Rs.

    10 each at Par payable as:


    Rs.2 on application
    Rs.3 on allotment
    Rs.3 on first call
    Rs.2 on Final Call
    The company received applications for 20,000 shares.
    All the applications were accepted.

    The company allotted the shares and received the amount as above.

    Pass Journal Entries in the company books of the company.

    Sr. Date Particulars L/F Debit Credit


    (Q.2) Kamal LTD issued 40,000 shares of Rs.10 each payable as:
    Rs.3 on application
    Rs.2 on allotment
    Rs.5 on Final Call
    Applications were received for 44,000 shares.
    Applications for 4,000 shares were rejected and the remaining applications were accepted.

    Application money on rejected applications was refunded.


    Amount is duly received on allotment and Final call.

    Pass Journal Entries in the books of Kamal LTD.

    Sr. Date Particulars L/F Debit Credit


    (Q.3) Pratiksha LTD issued 20,000 shares of Rs.100 each payable as follows.
    Rs.20 on application
    Rs.30 on allotment
    Rs.30 on first call
    Rs.20 on Final Call
    The company received applications for 30,000 shares.
    Applications for 6,000 shares were rejected and the balance was allotted Pro rata basis.

    Application money on rejected applications was refunded.


    The excess application money was adjusted against the amount due on allotment.
    The amount due on calls was received.

    Pass Journal Entries in the books of Pratiksha LTD.

    Sr. Date Particulars L/F Debit Credit


    (Q.4) A LTD company issued 15,000 shares of Rs.10 each payable as follows:
    Rs. 2 on application, Rs.3 on allotment, Rs. 3 on First call and Rs.2 on Final call.
    Applications are received for 10,000 shares.
    All these shares were allotted.
    All the calls were made except the Final.

    All the money due on the shares were received except the first call on 500 shares.

    You are to give Journal entries Ledger Accounts.

    Sr. Date Particulars L/F Debit Credit


    (Q.5) Ameya LTD Company was registered with a capital of Rs.5,00,000 in shares of Rs.10 each and issued
    20,000 such shares at a premium of Rs.2 per share, payable as Rs.2 per share on application,Rs. 5 on
    allotment(including premium) and Rs.2 per share on First call made 3 months later.Final call Rs. 3. Final Call
    is not made yet by the company.

    All the money payable on application and allotment were duly received but when the first call was made,One
    shareholder paid the entire balance including final call on his holding of 300 shares, and another shareholder
    holding 1,000 shares failed to pay the first call money.

    Give Journal Entries to record the above transactions.

    Sr. Date Particulars L/F Debit Credit


    (Q.6) Prakash LTD forfeited 300 shares of Rs. 10 each fully called up for non payment of final call of Rs. 4
    per share. These shares were subsequently reissued by the company for Rs. 10 per share as fully paid.

    pass Journal Entries in the books of the company.

    Sr. Date Particulars L/F Debit Credit


    (Q.7) Monica LTD forfeited 300 shares of Rs.10 each.
    Rs.8 per share called up on which a shareholder paid application and allotment money of Rs.5 per share but
    did not pay the first call of Rs.3 per share.
    Of these, 200 shares were subsequently reissued as fully paid up for Rs. 8 per share.

    Pass Journal Entries in the books of company.

    Sr. Date Particulars L/F Debit Credit


    (Q.8) Chinmay LTD offered 5,00,000 Equity shares of the nominal value of Rs.10 each for public subscription
    at Rs.12.
    The amounts payable were as follows:
    On application: Rs.4.50, On Allotment(including premium) : Rs.4.50, On First and Final call: Rs.3.
    The actual subscription was only for 4,00,000 shares.
    All money payable by shareholders was received except from Mr.Hemant who had taken 1,000 shares but
    failed to pay the Final call.His shares were forfeited and reissued to Miss.Amita at Rs.6 each.

    Show Journal Entries in the books of a company.

    Sr. Date Particulars L/F Debit Credit


    (Q.9) MCS LTD issued a prospectus inviting applications for 2,000 shares of Rs. 10 each at a premium of
    Rs. 2 per share payable as follows:
    On Application Rs. 2 per share
    On allotment Rs. 5 per share (Including premium)
    On first call Rs. 3 per share
    On Second call Rs. 2 per share
    Applications were received for 3,000 shares & allotment, made pro-rate to the application of 2,400 shares,
    the remaining applications being refused.
    Money over-paid on application was employed on account of sums due on allotment
    Ravindra to whom 40 shares were allotted failed to pay allotment money & on his subsequent failure to pay
    the first call, his shares were forfeited.
    Mahesh, the holder of 60 shares, failed to pay the two calls & so his shares were also forfeited. All these
    shares were sold to Rajendra credited as fully paid for Rs.9 per share.

    Show Journal Entries in the books of a company.

    Sr. Date Particulars L/F Debit Credit


    ISSUE OF SHARES :--------------------------------------------------------------------------------------------------------------------
    PROFORMA “JOURNAL-ENTRIES”

    STEP. 01 : APPLICATION PROCEDURE;

    (i) Application Money received;


    Bank A/c…………………………………………………………………………. xxxx
    To Share Application A/c xxxx
    (Amount = No.of Applications X Application money per Share)

    (ii) Application money transfered to Share Capital A/c;


    Share Application A/c……………………………………………………………. xxxx
    To Share Capital A/c xxxx

    (iii) Refund of Rejected Applications;


    Share Application A/c……………………………………………………………. xxxx
    To Bank A/c xxxx

    STEP. 02 : ALLOTMENT PROCEDURE;

    (i) Excess Application money adjusted against allotment;


    Share Application A/c……………………………………………………………. xxxx
    To Share Allotment A/c xxxx

    (ii) Allotment amount Due;


    [a] Allotment @ PAR (FACE VALUE) :
    Share Allotment A/c……………………………………………………………. xxxx
    To Share Capital A/c xxxx

    [b] Allotment @ PREMIUM & PREMIUM collected at the time of allotment :


    Share Allotment A/c……………………………………………………………. xxxx
    To Share Capital A/c xxxx
    To Securities Premium A/c

    [c] Shares Issued @ DISCOUNT :


    Share Allotment A/c……………………………………………………………. xxxx
    Discount on Issue A/c xxxx
    To Share Capital A/c
    (iii) Allotment Money Received;
    Bank A/c………………………………………………………………………….. xxxx
    To Share Allotment A/c xxxx

    STEP. 03 : CALL PROCEDURE;

    (i) Call Money Due;


    1st/ Final Call A/c………………………………………………………………… xxxx
    To Share Capital A/c xxxx

    (ii) Receipts of Call Money;


    Bank A/c………………………………………………………………………….. xxxx
    To 1st/ Final Call A/c xxxx

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