The authorised capital of a limited company is Rs.

2,00,000
divided in to 20,000 equity shares of Rs. 10 each. Out of these,
15,000 shares have been issued to the public, payable Rs. 2 on
Application
Rs. 4 on Allotment
Rs. 2 on First call and
Rs. 2 on Second and Final call.
Pass the necessary journal entries and prepare balance sheet. All
the amounts have been duly received.
Date

Balance Sheet of XYZ Ltd as at . . . . .

Particulars Note No. Amount(Rs.)

I.Equity and Liabilities

1.Shareholders funds
a.Share Capital 1 150000
150000
II.Assets
1.Current Assets
a.Cash and cash
equivalents 2 150000
150000

Notes to accounts
1.Share capital Rs.
Authorised capital
20000 equity shares
of Rs.10 each 200000
Issued capital
15000 equity shares
of Rs.10 each 150000
Subscribed,calledup
and fully paid-up
15000 equity shares
of Rs.10 each
150000
2.Cash and cash
equivalents
Cash at bank 150000
 Books of XYZ Ltd

Journal

Particulars L.F.
Bank a/c Dr
To share application a/c
(Application money on 15,000 shares @ Rs.2 per share received)
Share application A/c Dr

To share capital a/c

(Application money transferred to share capital)

Share Allotment A/c Dr
To share capital A/C
(Money due on allotment of 15000 shares@Rs.4 per share)
Bank a/c Dr

To share allotmernt A/c

(Money received on allotment of 15000 shares@Rs.4 per share)
Share first call A/c Dr
To share capital A/c
(Money due on 15000 shares@Rs.2 per share on first call)

Bank a/c Dr
To share first call A/c
(First call Money received on 15000 shares@Rs.2 per share)
Share second and final call A/c Dr
To share capital A/c
(Money due on 15000 shares @Rs.2 per share on second and final call)
Bank a/c Dr
To share second and final callA/c.

(Second and final call money received on 15000 shares@Rs.2 per share)
d

Debit Amount(Rs.) Credit Amouint(Rs.)

30000
30000

30000

30000

60000
60000

60000

60000

30000
30000

30000
30000

30000
30000
30000
30000
 Problem-1

The authorised capital of a limited company is Rs. 2,00,000 divided

in to 20,000 equity shares of Rs. 10 each. Out of these, 15,000
shares have been issued to the public, payable Rs. 2 on
Application
Rs. 4 on Allotment
Rs. 2 on First call and
Rs. 2 on Second and Final call.
Pass the necessary journal entries and prepare balance sheet. All the
amounts have been duly received.
Date
 Books of XYZ Ltd
Journal

Particulars L.F.
YZ Ltd
al

Debit Amount(Rs.) Credit Amouint(Rs.)

 Problem-2

On 15th March,2003 New company Ltd invited application for 25000 equity shares of
Rs.10 each payable as follows:
On application Rs.2
On allotment(1st May) Rs 3
On first call(1st Oct) Rs.3
On final call(1st Feb 2004) Rs.2
Applications were clsoed on 5th April,2003.All the shares were applied for and allotted.
A shareholder holding 500 shares paid the whole amount due and along with allotment.
Pass the necessaru journal entries.
Interest is paid to shareholders @6% p.a. on 1st February,2004.

Balance Sheet of XYZ Ltd as at . . . . .

Particulars Note No. Amount(Rs.)

I.Equity and Liabilities
1.Shareholders funds
a.Share Capital 1

II.Assets
1.Current Assets
a.Cash and cash equivalents 2
 Books of New Company Ltd
Journal
Date Particulars L.F.
5th April,2013Bank a/c Dr
To share application a/c
(Application money on 25,000 shares @ Rs.2 per share received)
Share application A/c Dr
To share capital a/c
(Application money transferred to share capital)
1st May 2003 Share Allotment A/c Dr
To share capital A/C
(Money due on allotment of 25000 shares@Rs.3 per share)
Bank a/c Dr
To share allotmernt A/c
To Calls-in-advance A/c
(Money received on allotment of 25000 shares@Rs.3 per share and
calls-in-advance for 500 shares @Rs.5 per share.)
1st Oct 2003 Share first call A/c Dr
To share capital A/c
(Money due on 25000 shares@Rs.3 per share on first call)
Bank a/c Dr
Calls-in-advance a/c
To share first call A/c
(First call Money received on 25000 shares@Rs.3 per share except for
500 shares)
1st Feb 2004 Share second and final call A/c Dr
To share capital A/c
(Money due on 15000 shares @Rs.2 per share on second and final call)
Bank a/c Dr
Calls-in-advance a/c
To share second and final callA/c.

(Second and final call money received on 24500 shares@Rs.2 per

share--------)
1st Feb 2004 Interest on calls in advance a/c Dr
To Sundry shareholders'account
(Interest due on calls in advance)
Sundry shareholders account Dr
To Bank A/c
(Interest paid on calls-in-advance)

Interest calculation:
37.5
 45
82.5
pany Ltd
l
Debit Amount(Rs.) Credit Amount(Rs.)
50000
50000

30000
30000

75000
75000

77500
75000
2500

75000
75000

73500
1500
75000

50000
50000
49000
1000
50000

82.5
82.5

82.5
82.5
 Problem-5(Issue of shares at a premium)

The authorized capital of a company is 10000 shares of Rs.10 each.On 10th

April,2001,50000 shares are issued for subscription at a premium of Rs.2 per
share.The share money is payable as follows: Rs.5(including premium
Rs.2)with application, Rs.3 on allotment,Rs.2 on first call and Rs.2 on final
call.

The shares are fully subscribed and the application money including premium
is received in full.The allotment money is received except on 500 shares.

Final call money on two hundred shares was not received.

Pass the necessary journal entries.
 ssue of shares at a premium) Books of X

mpany is 10000 shares of Rs.10 each.On 10th

ued for subscription at a premium of Rs.2 per
ble as follows: Rs.5(including premium
allotment,Rs.2 on first call and Rs.2 on final

Date
10th
the application money including premium April2001

t money is received except on 500 shares.

ed shares was not received.

 Books of XYZ Company Ltd
Journal

Particulars L.F. Debit(Rs.)

Bank a/c Dr 250000

To share application a/c
(Money received on application for 10,000 shares @ Rs.5 per share
including premium of Rs.2 per share)
Share application A/c Dr 250000
To share capital a/c
To Securities premium A/c
(Transfer of application money to share capital and securities
premium accounts)
Share Allotment A/c Dr 150000
To share capital A/C
(Money due on allotment of 10000 shares@Rs.3 per share)
Bank a/c (49,500xRs.3) Dr. 148500

Calls-in-arrears a/c Dr. 1500

To share allotmernt A/c
(Allotment money received on 49500 shares@Rs.3 per share)

Share first call A/c Dr 100000

To share capital A/c
(Amount due on 50000 shares@Rs.2 per share on first call)
Bank a/c (49500xRs.2)
Dr 990000
Calls-in-arreras a/c 1000
(Money Torecived
share first call A/c
on first call of 50000 equity shares @Rs.2 per
share.)

Share second and final call A/c Dr 100000

To share capital A/c
(Money due on 50000 shares @Rs.2 per share on second and final
call)
Bank a/c (49300xRs.2) Dr 98600
Calls-in-arrears a/c (700xRs.2) Dr 1400
To share second and final call a/c.
(Second and final call money received on 49300 shares@Rs.2 per
share)
Credit(Rs.)

250000

150000
100000

150000

150000

100000

100000

100000
100000
 Problem-5(Issue of shares at a premium)
The authorized capital of a company is 100000 shares of Rs.10 each.On 10t
50000 shares are issued for subscription at a premium of Rs.2 per share.The
is payable as follows: Rs.5(including premium Rs.2)with application, Rs.3
allotment,Rs.2 on first call and Rs.2 on final call.

The shares are fully subscribed and the application money including premiu

is received in full.The allotment money is received except on 500 shares.

Final call money on two hundred shares was not received.

Pass the necessary journal entries.
 Problem-5(Issue of shares at a premium)
ital of a company is 100000 shares of Rs.10 each.On 10th April,2001,
sued for subscription at a premium of Rs.2 per share.The share money
ws: Rs.5(including premium Rs.2)with application, Rs.3 on
irst call and Rs.2 on final call.

y subscribed and the application money including premium

he allotment money is received except on 500 shares.

two hundred shares was not received.

journal entries.
 Books of XYZ Company Ltd
Journal

Date Particulars L.F.

10th April2001 Bank a/c Dr

To share application a/c

(Money received on application for

50,000 shares @ Rs.5 per share
including premium)
Share application A/c Dr
To share capital a/c(50000xRs.3)
To Securities premium A/c

(Transfer of application money to

share capital and securities premium
accounts)
Share Allotment A/c Dr
To share capital A/C
(Money due on allotment of 50000
shares@Rs.3 per share)

Bank a/c (49500xRs3 per share)

Dr.

Calls-in-arrears a/c (500xRs.3)

Dr.

To share allotmernt A/c

(Money received on allotment of
49500 shares@Rs.3 per share )
Share first call A/c
Dr
To share capital A/c

(Amount due on 50000 shares@Rs.2

per share on first call)
Bank a/c Dr
Calls-in-arrears a/c
Dr.
To share first call A/c

(Money recived on first call of 49500

equity shares @Rs.2 each.)

Share second and final call A/c Dr

To share capital A/c
(Money due on 50000 shares @Rs.2
per share on second and final call)
Bank a/c (49300xRs.2)
Dr
Calls-in-arrears a/c (700xRs.2)
Dr

To share second and final callA/c.

 (Second and final call money received
on 49300 shares@Rs.2 per share)

Books of XYZ Company Ltd

Cash Book(Bank columns only)
Dr.
Date Particulars Rs.
4/10/2010 To share application a/c 250000
(Being application money received on 50000 shares@Rs.2 per
share)

To share allotment a/c 148500

(Being allotment money received on 49,500 shares@Rs.3 each)

To share first call a/c

(Being first call money received on 49,500 shares@Rs.2 each) 99000

To share final call a/c 98600

(Being final call money received on 49,300 shares@Rs 2 each)

596100
mpany Ltd

Debit Amount(Rs.) Credit Amount(Rs.)

250000

250000

250000
150000

100000

150000
150000

148500

1500

150000
100000
100000

99000

1000
100000

100000

100000

98600

1400

100000
XYZ Company Ltd
(Bank columns only)
Cr.
Date Particulars Rs.
31.3.2011 By Balance c/d 596100

596100
 Problem-6(Issue of shares at a discount)
Star Chemicals Ltd issued 35000 equity shares at a discount of Rs.1 per share
payable a s fpollows:
On application Rs.2 per share
On allotment(Adjustment of discount) Rs.2 per share.
On first call Rs.5 per share.

Applications were received for 40000 shares.

Excess application money was refunded.
All the shares were called up and paid up.
Write the necessary journal entries.
 Books of Star Chemicals Ltd
Journal
Date Particulars Debit(Rs.)
Bank a/c Dr Dr 80000
To share application a/c

Being share application money received

on 40000 eq shares@Rs.2 each)
Share application a/c Dr 80000
To share capital a/c
To Bank a/c

Share application money transferred to

share capital account in respect of 35000
shares and excess appliaction money
refunded.)
Share allotment a/c Dr 70000
Discount on issue of shares a/c
(35000xRe.1 ) Dr 35000
To share capital a/c
(Being allotment money due on 35,000 shares @Rs.2 each
after allowing discount of Rs.1 per share .)
Bank a/c Dr Dr 70000
To share allotment a/c
(Being allotment money received on 35,000
shares @Rs. 2 per share.)
Share first and final call a/c (35000xRs.5) Dr 175000
To share capital a/c
Share first call amount due on 35000 eq shares
@Rs.5 per share)
Bank a/c Dr 175000
To share first and final call a/c
Share first call money received on 35000 equity
shares @Rs.5 per share)
Credit(Rs.)

80000

70000
10000

105000

70000

175000

175000
 Problem-3(Oversubs
Sharad Ltd., issued 10000 equity shares of Rs.10 each to the public, payable at Rs. 1
Applications were received for 14000 shares.
All the amounts due were received except the second call money on 300 shares.
Pass the journal entries in the following cases:
1. When applications for 4000 shares are rejected.
2. When excess of application money is adjusted against allotment money due.
Case:1
Books of Sharad Ltd
Journal
Date Particulars L.F. Debit(Rs.)
Bank A/c 14000
To share application a/c
Application money received on 14000 shares
@Rs.1 per share.
Share application a/c Dr 14000
To share capital a/c
To Bank a/c

Transfer of share application money to

share capital a/c and refund of excess
apllication money on 4000 shares.
Share allotment a/c Dr 30000
To share capital account
Share allotment money due on 10000 equity
shares@Rs.3 per share.
Bank A/c Dr 30000
To share allotment a/c
Allotment money received on 10000 eq
shares@Rs.3 per share.
Share first call a/c Dr 20000
To share capital a/c
Share first call money due on first call of
10000 eq shares@Rs.2 per share.
Bank a/c Dr 20000
To share first call a/c

Money received on share first call of 10000

eq shares@Rs.2 per share.
Share second and final call a/c Dr 40000
To share capital a/c

Amount due on second and final call @Rs 4

per share on 10000 eq shares
Bank a/c Dr 38800
Calls-in-arrears a/c Dr 1200
To share second and final call a/c.

Money received on scond and final call of

10000 eq shares except for 300 shares.
-3(Oversubscription)
payable at Rs. 1 on application, Rs. 3 on allotment, Rs 2 on first call and Rs. 4 on second a

n 300 shares.

money due.
Case:2
Books of Sharad Ltd
Journal
Credit(Rs.) Date Particulars L.F.
Bank A/c
14000 To Equity share application a/c
Application money received on
14000 shares @Rs.1 per share.
Share application a/c Dr
10000 To Equity share capital a/c
4000 To Equity Share allotment a/c
(Transfer of share application
money to share capital and excess
share application money utilised
for allotment.)

Share allotment a/c Dr

30000 To share capital account

Share allotment money due

Bank A/c
30000 To Equity share allotment a/c

(Allotment money received.)

Share first call a/c Dr
20000 To share capital a/c
 Share first call money due on first
call of 10000 eq shares@Rs.2 per
share.
Bank a/c Dr
20000 To share first call a/c
Money received on share first call
of 10000 eq shares@Rs.2 per
share.
Share second and final call a/c Dr
40000 To share capital a/c
Amount due on second and final
call @Rs 4 per share on 10000 eq
shares
Bank a/c Dr
Calls-in-arrears a/c Dr
40000 To share second and final call a/c.
Money received on scond and
final call of 10000 eq shares
except for 300 shares.
Rs. 4 on second and final call.

td

Debit(Rs.) Credit(Rs.)
14000
14000

14000
10000
4000

30000
30000

26000
26000

20000
20000
20000
20000

40000
40000

38800
1200
40000
 Problem-4(Oversubscription)
Arvind Ltd issued 50000 equity shartes of Rs.10 each payable Rs.2 on application,
Rs.3 on allotment and balance on first call.Applications were received for 60000
shares.Directors of the company allotted them as under:
To applicants for 40000 shares 40000 shares

To applicants for 15000 shares 10000 shares

To applicants for 5000 shares NIL
Application,allotment and call moneys were duly received except the first call
money on 200 shares.
Pass the necessary joutnal entries in the books of the company.
 Books of Arvind Ltd
Journal
Date Particulars Debit(Rs.)
Bank a/c Dr(60000xRs.2) 120000
To share application a/c
Share application money received on 60000 shares
@Rs.2 per share
Share application a/c Dr 120000
To share capital a/c
To share allotment a/c
To Bank a/c

Share application money transferred to share capital

a/c,and application money on 5000 shares
refunded,excess aplication money being utilised for
share allotment)
Share allotment a/c Dr 150000
To share capital a/c

Allotmnet mony due on 50000 shares@Rs.3 per share.

Bank a/c Dr 140000
To share allotment a/c
Balance allotment money received .
Share first and final call a/c Dr 250000
To share capital a/c
Share first and final call money due on 5000 shares@
Rs.5 per share
Bank a/c(49800xRs.5 ) Dr 249000
Calls-in-arrears a/c (200xRs.5) Dr 1000
To share first and final call a/c
Share first and final call money received on 49800
shares@Rs.5 per share.
Credit(Rs.)

120000

100000
10000
10000

150000

140000

250000

250000
 Problem-4(Oversubscription)
Arvind Ltd issued 50000 equity shartes of Rs.10 each payable Rs.2 on application,
Rs.3 on allotment and balance on first call.Applications were received for 60000
shares.Directors of the company allotted them as under:
To applicants for 40000 shares 40000 shares

To applicants for 15000 shares 10000 shares

To applicants for 5000 shares NIL
Application,allotment and call moneys were duly received except the first call
money on 200 shares.
Pass the necessary joutnal entries in the books of the company.
 Books of Arvind Ltd
Journal
Date Particulars Debit(Rs.) Credit(Rs.)
Bank a/c (60000xRs.2) Dr 120000
To share application a/c 120000
Application money received on 60000
shares @Rs.2 per share.
Share application a/c Dr 120000
To share capital a/c(50000xRs.2) 100000
To share allotment a/c 10000
To Bank a/c(5000xRs.2) 10000

Being the transfer of application

money into share capital and
allotment and balance refunded.)
Share allotment a/c Dr 150000
To share capital a/c 150000
Allotment money due on 50000
shares @Rs.3 per share.
Bank a/c Dr 140000
To share allotment a/c 140000

Balance allotment money received.