°SHARE: A share is the share in the share capital of the company. ‘Share capital means capital of the company. When 10 rs shares is Issued for 10 rs only --> we call it ISSUE of Shi Jed for more than 20 rs, lets say 12 --> we call it ISSUE at PREMIUM. ares at PAR When 10 rs shares is issu"Authorized share caj [ssued share capital --> Is the part of authorized share capital that the co. actually issues to general public for subscription. ‘Subscribed share capital--> is that part of issued share capital which is subscribed by the: ogeneral public ‘Called up capital: > its called up by the co from its shareholders ‘paid up share capital --> That part of called up capital which is paid by the shareholders Calls in arrears--> that part of called up capital which remains unpaid by share holders.Case 1 (SYounsenensting — CII follows Rs 3 call, Rs 1 on second and final call. Alls shares were subscribed for and the (on application, Rs 2 on allotment, Rs 4.on, money was duly recieved. Show how share capital wi ppear in company’s balancesheet and its nots to accounts. Extract of balancesheet Of A Itd 15 on 34st mar 2020 Notes to accounts ticulars Nova Amount 1, Share capital Authorized share capital Equities & Liabilities contend 1. share Holders Fund Issued share capital 00,000 there Fasieat gs 10000 shares of Rs 10 eachCase A ltd has an authorized share capital of Rs10,00,000. No of shares issued to general public is 8000 shares of Rs 100 payal as follows rs 10 on application, Rs 50 on allotment , rs 40 on ist and final call. All shares were subscribed for and the money was duly recieved. The final call is yet to be made Authorized capital 10000 equity shares of Rs 100 each Issued share capital 8000 eq shares of Rs 100 each Subscribed capital Subscribed But not Fully paid up 8000 eq of Rs 100 each , Rs 60 called up 10,00,000 4,80,000Ovimeroes- toon case 3 ‘Aitd having an authorized share capital of 20000 shares . It offered “Ghipres of Rs 10 each payable as follows Rs 3 on application, Rs 4 on allotment , Rs 1 on first call, Rs 2.on secon maf call. Alls shares were subscribed for - Mr X holding 2000 sHares failed to pay’ First call and Second & final call. ‘Show how share capit will appear in company's balancesheet and its nots to accounts. Subscribed capital Subscribed and fully paid up 8000 shares of Rs 10 each 80000 Subscribed but not fully paid up. 2000 shares of Rs 10 each 20000 Less: call in arrears 2000" 3) 6000 14000 7.case 4 ‘A Itd having an authorized share capital of 20000 shares . It offered 10000 shares of Rs 10 each payable as follows Rs 3 on application, Rs 4 on allotment , Rs 1 on first call, Rs 2 on second and final call. Alls shares were subscribed for . Mr X holding 2000 shares failed to pay First call and Second & final call. The co decided to forfiet, his share ‘Show how share capital will appear in company's balancesheet and its nots to accounts. ee ‘Subscribed Capital i, ‘Subscribed & fully paid up = ‘8000 shares of Rs 10 each 80000 Add :Shares forfieture acc 2000°7 14000 ‘94000Case 5 (8 etesennteme — @ DEI A ltd having an authorized share capital of 20000 shares . It offered 10000 shares of Rs 10 each payable as follows Rs 3 on application, Rs 4 on allotment , Rs 1 on first call, Rs 2 on second and final call. Alls shares were subscribed for . Mr X holding 2000 shares failed to pay First call and Second & final call. The co decided to forfiet his shares. the forficted shares were reissued. ‘Show how share capital will appear in company’s balancesheet and its nots to accounts. Subscribed capital Subscribed and fully paid up 10000 shares of rs 10 each (8000+2000)Case 6 A Youmesccenstaing — @ KEI Alltd having an authorized share capital of 20000 shares . It offered 10000 shares of Rs 10 each payable as follows Rs 3 on application, Rs 4 on allotment , Rs 1 on first call, Rs 2 on second and final call. Alls shares were subscribed for . Mr X holding 2000 shares failed to pay First call and Second & final call. The co decided to forfiet his shares. out of the forfieted shares 1500 were reissued to Mr Z. Show how share capital will appear in company's balancesheet and its nots to accounts. Subscribed capital ibscribed and fully ‘9500 shares of Rs 10 8000+1500 ch 95000 Add: Share forfieture ace 500*7 3500Face value / Nominal value/ registered value Qecsecee FACE VALUE Face Value < Offer price => Shares issued at a premium °Shares issued under Lumpsum Q. Altd offered 10000 shares of Rs 100 each. public and the money was duly recieved. shares were subscribed for by the general ° © ° Bank acc 10,00,000 To shares application and allotment acc 10,00,000 ( Being application money recieved) 9 Share application and allotment acc ..dr 10 lacs To share capital acc 10,00,000 {{ Being share application money transferred to Share capital)Shares issued under Lumpsum at premium Q. Altd offered 10000 shares of Rs 100 each for Rs 120. all si were subscribed for by the general public and the money was duly recieved. Bank acc ..dr 12,00,000 To shares application and allotment acc 12,00,000 (Being application money recieved) Share application and allotment acc ..dr 12 lacs To share capital acc 10,00,000 To securities preimium reserve 2,00,000 ( Being share application money transferred to Share capital)Shares issued under installments giyggeny Q. A ltd offered 10000 shares of Rs 100 each payable follows Rs 20 on application, Rs 20 on allotment, Rs 35 on First call and Rs 15 on second and final call . All shares were subscribed for and the money was duly recieved. Bank acc ..dr_ 200000 To Share application 200000 (Being share application money recieved) Shi application ace ..dr_ 200000 To Share capital acc 200000 (Being application money transferred to share capital) Share allotment ace ..dr 300000 To share capital acc 300000 (Being share allotment money due) Bank ace ..dr 300000 To share share allotment acc 300000 ( Share allotment money recieved) Share First call acc ..dr 350000 To Share capital. 350000 (Being share st call money due) nk acc ..dr_ 350000 To share first call acc 350000 ( share 1st call money rec) ‘Share second & final call ace 150000 To Share capital acc 150000 (Share 2nd and final call money due) nk acc .dr 150000 To Share 2nd and final call acc 150000 ( 2nd and final call money recieved)Installment at premium A ltd offered 10000 shares of Rs 50 each For rs 65 payable as follows: Application. 40, Allotment” 35 (20+ 15) Firsteall 5 Second & Final call 15 Premium can be with any stage but if Qs silent take it with allotment. ‘The SPR is accounted with the due entry All shares were subscribed for and the money was duly recieved. Bank ace ..dr 1 To share application acc 4L (being app money rec) Share application acc ..dr 1L ‘To share capitalacc — 1L (Being shares alloted) Share allotment ace ..dr 3.5L To share capital 2 To securities premium reserve 1.5 (Being share allotment money di Bank ace ..dr 3.5L To Share allotment acc 3.5L (Allotment money rec) Share 1st call ace ..dr 50000 To Share capital acc 50000 (share Ast call due) Bank ace ..dr 50k To share Ast call 50k (First call money rec) Share second and final call ..dr 1.51. ‘To Share cap acc 1.5L ( Second & final call money due) Bank ace.dr 1.5L. 2nd and final call acc 1.5L (Second call money rec)© whiteboard - Zoom NOTE: When Q says "Balance as and when required " -> it means the amt is not yet called up So No JE for thoseCall in arrears Altd offered 10000 shares of Rs 40 each Fors 12.per share, payable as follows re 3 on application, rs § on allotment , rs 1 on first call, and Rs 3 on 2nd and final‘call, All shares were subscribed for Mr X holding 2000 sh failed to pay allotment money. — Share First call acc ..dr £0000 Bank acc ..dr 30000 ee sam To share capital acc 10000 Perea Bank acc war 8000 jare app acc ..dr Calls in arrears 2000 to share capital 30000 To share first call 10000 Share allot acc ..dr 50000 share 2nd call acc ..dr 30000 ae ar Se caine aon To share capital acc 30000 deldceemnch ‘Snes Bank ace ..dr 24000 jank acc «dr Call in arrears 6000 Call in arrears ace dr 10000 To share 2nd & final call 30000 To share allotment 50000 NOTE : If someone doesnt pay allotment , we assume he wont pay calls either. FEI © eh: 2 teaCalls in Arr rs. Altd offered 10000 shares of rs 100 each payable as follows Rs 30 on application Rs 20 on allotment Rs 50 on ist and final call. All shares were subscribed for and money was duly recieved Except MR Rem a shareholder holding 2000 share didnot pay the first and final call money- Bank acc..dr 3b Share first and final call acc..dr SL To share application acc 3L To Share capital acc BL ( Being application money recieved) (Being first & final call due) Share application acc ..dr 3L Bank acc..dr 4L to share capital acc 3L Call in arrears ..dr 4L (being application money transferred) To share first and final call 5L Share Allotment acc ..dr 2L To share capital 2b ( Bening allotment money due) Bank Acc ..dr 2b To share allotment acc 2L ( Being allotment money recieved)J vanessa Calls in advance Altd offered 10000 shares of rs 100 each payable as follows Rs 30 on application Rs 20 on allotment Rs 50 on ist and final call. All shares were subscribed for and money was duly recieved. MR Ram a shareholder holding 2000 share paid full amount along with application money Working NOTE Amount recieved with application Share Allotment acc ..dr 2. To share capital 2L 10000 * 30 = 300000 (Bening allotment money due) *70= ee Seen Bank Acc..dr 160000 To share allotment acc 160000 Bank acc..dr 440000 ( Being allotment money recieved To share application acc 440000 ( Being application money recieved) Share first and final call acc..dr 5L To Share capital acc 5L Share application acc ..dr 440000 (Being first & final call due) to share capital acc 300000 To Share allotment 40000 Bank acc ..dr 4 To Calls in advance 100000 —~ Calls in advance ..dr 1L (being application money transferred) To share first and final call 5L100000 of 10 each paybale as "3 on application 4 on allotment balance in 4st and final call 95000 applications recieved Soham whom 500 shares were alloted failded to pay allotment money Gautam paid entire money 750 share on allotment ot 750*3 = 2250 ‘95000 4 = 380000 (-) So0*4 ‘=| 2000o Undersubscription of shares If Company offeres 10000 shares but General public applied for 9000 shares --> its called undersubscri shares. ALL journal entries will be passwed with 9000 shares only. 1 marker Minimum subscription required is 90%© Whiteboard - Zoom Oversubscription of Shares 1. Reject the excess application 2. Prorata allotment 3. Give a combination of 1 & 2 above© whiteboard - Zoom Rejection Altd offered 10000 shares of Rs 50 each. Applications were recieved for 25000 shares . C decided to reject the excess apllications. Pass necessary Journal entries Bank acc ..dr 1250000 To share application and allotment 1250000 ( sh app money rec) Share appl & allot ..dr_ 1250000 To share capital 500000 To Bank 750000 ( being app money tft to sc and excess refunded)Working NOTE in case of Prorata allotment | shares app) Shores app money Excess money vociavad | required *aElls In edvance Allotment| First cal rian cai] FY 0 a Een neProrata Altd offered 10000 shares of Rs 50 each payable as follows Application - Rs 10 per shai ‘es .Applications were recieved for 25000 shares . Co. decided to make prorata allotment ist and call 10 per necessary Journal entries Bank acc ..dr 250000 To share application 250000 (sh app money rec) Share application..dr_ 250000 ‘To share capital 100000 To share allotment 1150000 (being app money tft to sc and excess refunded) Share allotment ace ..dr 3L To share capital ace 3L (allotment due) To share allotment acc 150000 (allotment recived) ‘Share First & final call ace .dr 1b To Share cay aL (first call money due) Bank acc ..dr 4b ‘To share Ast and final call 1L (final call money recieved) =oWorking NOTE in case of Prorata allotment cuca ree 7 ‘Kajusmens— ategory| shares shares ci dvance applied | Siloted | te First call | Final call” [Refund 1 25000 10000 | 250000 | 200000 | 150000 | isoo90 |Unless Q specifically tells us to adjust excess application money on Call -> we just adjust In allotment and balance we refund. If Q says to adjust excess app money In calls the 1st adjust towards allotment then adjust in call and even after adjusting for calls if anything Is left will be refunded. Maximum amount that can be adjusted in any installment( allot/ 1st call/Final call) is the amount due for that installment Due entry is always normally passedProrata gy of Rs 50 each payable as follows Application - Rs 30 per share allotment 10 per share and Altd offered 10000 shar -Applications were recieved for 25000 shares . Co. decided to make prorata allotment . Pass Ast and call 10 per shai necessary Journal entries Bank ace ..dr 750000 Share First & final call ace dr 4L To share application 750000 ‘To Share capital aL (sh app money rec) (first call money due) Share application..dr 750000 Bank acc ..dr 1L To share capital 300000 ‘To share Ast and final call 1L To share allotment 100000 (final call money recieved) To Bank 350000 (being app money tft to sc and excess refunded) Share allotment acc ..dr 100000 To share capital acc 100000 (allotment due)Working NOTE in case of Prorata allotment ea Noor category] shares Shaves app] SFaPS®9P | excass fae a avancs applied alloted | (acied | required Allotment) First call | Final call Refund « 25000 10000 | 750000 {300000 | 450000 | yo9900| - - aso0eo 92 Altd offered 10000 shares of Rs 50 each payable as follows Application - Rs 30 per shi and call 10 per shar allotment 10 per share and 1st ‘Applications were recieved for 25000 shares . Co, decided to make prorata allotment . Pass necessary Journal entriesProrata gs Altd offered 10000 shares of Rs 50 each payable as follows Application - Rs 10 per share allotment 10 per share and 1st and call 30 per shares .Applications were recieved for 25000 shares . Co. decided to make prorata allotment and excess app money will be adjusted towards 1st and final call also . Pass necessary Journal entries Bank acc ..dr 250000 Share First & final call ace dr 3L To share application 250000 ‘To Share capital 3 (sh app money rec) (first call money due) Share application..dr 250000 ink ace wd 2.5 To share capital 100000 Call in adv ..dr ‘50k To share allotment 100000 To share ist and final call 3L To calls in adv 50000 (being app money tft to sc and excess refunded) Share allotment acc ..dr 100000 To share capital acc 100000 (allotment due)Simeone Zoom Working NOTE incase of Prorata allotment @ No. OF no. of ares af Rajusmients = caegory shares | Sosa | Share spe) Saray 977 cane Se ene de Su ‘Allotment! Fist call] Final call” — Refund 25000 10000 | 250000 |100000 [150000 | so9999 | 50000 - 93 Altd offered 10000 shares of Rs 50 each payable as follows Application - Rs 10 per share allotment 10 per share and 1st ‘and call 30 per shares .Applications were recieved for 25000 shares . Co. decided to make prorata allotment and excess app money will be adjusted towards ist and final call also . Pass necessary Journal entriAItd offered 10000 shares of Rs 50 each payable as follows, Rs 10 on applicatior Rs 15 on allotment Rs 25 on ist and final call. Allications were recieved for 30000 shares. the directoes decided to make allotment as follows 2000 shares were outrightly rejected 5000 shares were alloted in full Prorata allotment was made for remaining shareholders, Pass JE Ajustments apr APP category] shares] shares | money | M™Bey| EXe55] Allotment | callsin adv | — Refund applied | alloted | fee" | due 1 2000 0 20000 ° 2 |so00 | s000 | 50000 | s0000 2//| 22000 | sooo | 220000] so000 30000 | 40000Casei For feiture when shares are Issued at par Share capital acc ..dr ( Called up face value * no of shares forfieted) To Share forfeiture ( Amt recieved towards Facevalue) To Calls in arrears acc (total Amt not received ) Case 2 Forfieture of Shares issued at premium Case 2 (i): When premium is already recieved The forfieture entry is exactly same as shares issued at par Case 2 (ii): When premium is NOT YET recieved Share capital acc ..dr ( Calledup-face-value * no of shares forfieted) Securities premium reserve ..dr ( premium not recieved) To Share forfeiture ( Amt recieved towards Facevalue) To Calls in arrears acc (total Amt not received including premium )