Journal Entries
Particulars |
L.F. |
Dr. ₹ |
Cr. ₹ |
||||||
Bank a/c |
Dr. |
|
9,00,000 |
|
|||||
To equity share appl. a/c |
|
|
9,00,000 |
||||||
(Application money received on 30,000 shares @ ₹30 per share) |
|
|
|
||||||
Equity share appl. a/c |
Dr. |
|
9,00,000 |
|
|||||
To equity share capital a/c |
|
|
9,00,000 |
||||||
(Application money transferred to equity share capital account) |
|
|
|
||||||
Equity share allot. a/c |
Dr. |
|
15,00,000 |
|
|||||
To equity share capital a/c |
|
|
15,00,000 |
||||||
(Equity share allotment money due on 30,000 shares @ ₹50 per share) |
|
|
|
||||||
Bank a/c |
Dr. |
|
15,00,000 |
|
|||||
To equity share allot. a/c |
|
|
15,00,000 |
||||||
(Allotment money received) |
|
|
|
||||||
Share first and final call |
Dr. |
|
6,00,000 |
|
|||||
To equity share capital a/c |
|
|
6,00,000 |
||||||
(Share first and final call due on 30,000 shares @ ₹20 per share) |
|
|
|
||||||
Bank a/c |
Dr. |
|
6,00,000 |
|
|||||
To share first and final call |
|
|
6,00,000 |
||||||
(Share first and final call money received) |
|
|
|
Section 39(1) of the Companies Act 2013 provides that a company cannot allot any securities of the company to the public unless the amount stated in the prospectus as the minimum amount has been subscribed and the sums payable on application for the amount so stated have been received by the company. According to SEBI guidelines minimum subscription has been fixed at 90% of the issued amount.
Sometimes shareholders pay a part or whole of the amount of the calls not yet made. The amount so received from the shareholders is known as calls in advance.
Company whose shares are traded on an official stock exchange. It must adhere to the listing requirements of that exchange, which may include how many shares are listed and a minimum earnings level.
When any shareholder fails to pay the amount due on allotment or any of the calls, such an amount is known as calls in arrears or unpaid calls.
Some shareholder may fail to pay one or more installments i.e. allotment money and/or call money. In such circumstances, the company can forfeit their shares i.e. the cancel the allotment and treat the amount already received thereon as forfeited to the company within the framework of the provisions in its articles.
It is a company which
(i) is not a private company;
(ii) has a minimum paid-up capital of ₹5,00,000 or such higher amount as may be prescribed,
The minimum number of members required to form a public limited company is seven. There is no restriction on maximum number of members.
When a share is issued at a price which is less than its face value, it is said that it has been issued at a discount. For example, if a share of the nominal value of ₹100 is issued at ₹90, it is said to have been issued at a discount of 10%.
Prohibition of issue of shares at a discount: As per section 53 of the Companies Act 2013, Companies would no longer be permitted to issue shares at discount. The only shares that could be issued at a discount are sweat equity wherein shares are issued to employees or directors in lieu of their services under section 54 of Companies Act 2013.
A private company is one which has a minimum paid up share capital of ₹1,00,000 or such higher paid up share capital as may be prescribed in the Companies Act, 2013 and by its Articles of Association:
(a) It restricts the right to transfer its shares, if any
(b) Limits the number of its members to 200 (excluding its present or past employee members).
(c) Prohibits any invitation to the public to subscribe for any securities of the company.
Section 52(2) of the Companies Act, 2013 restricts the use of the amounts received as premium on securities for the following purposes:
(i) Issuing fully paid bonus shares to the members;
(ii) Writing off preliminary expenses of the company;
(iii) Writing off the expenses of, or the commission paid or discount allowed on any issue of securities or debentures of the company.
(iv) Providing for the premium payable on the redemption of any redeemable Preference Shares or any of the debentures of the company
(v) Buyback of shares
When any shareholder fails to pay the amount due on allotment or any of the calls, such an amount is known as calls in arrears or unpaid calls. The company if authorised by its Articles of Association may charge interest at the specified rate on calls in arrears from due date to the date of payment. In case, the Articles of Association of the company is silent, Table F of the Companies Act, 2013 shall apply which provides for interest @ 10% p.a. However, the directors have the right to waive the interest on calls in arrears.
Sometimes shareholders pay a part or whole of the amount of the calls not yet made. The amount so received from the shareholders is known as Calls in advance. It is a liability for the company. In case of calls in advance, the company pays interest at the rate stated in its Articles of Association. In the absence of interest clause in the Articles of Association, provisions of Table F of the Companies Act, 2013 apply and the company is liable to pay interest @ 12% p.a. on calls in advance.
Preference Shares are the shares carry the following two preferential rights:
(a) Dividend at a fixed rate before any dividend is paid to equity shares.
(b) Repayment of capital before anything is paid to equity shares.
Preference shares can be classified as follows:
1) With reference to dividend
2) With reference to participation in surplus profit and
3) With reference to convertibility
1) With reference to dividend: Cumulative preference shares and Non-cumulative preference shares.
a) Cumulative preference shares: When unpaid dividends on preference shares are treated as arrears and are carried forward to subsequent years, then such preference shares are known as cumulative preference shares. It means unpaid dividend on such shares is accumulated till it is paid off in full.
b) Non-cumulative preference shares: These preference shares have right to get fixed rate of dividend out of the profits of current year only. They do not carry the right to receive arrears of dividend.
2) With reference to participation in surplus profit: Participating preference shares and Non- participating preference shares.
a) Participating preference shares: Those preference shares, which have right to participate in any surplus profit of the company after paying the equity shareholders, in addition to the fixed rate of their dividend, are called participating preference shares.
b) Non- participating preference shares: Preference shares, which have no right to participate on the surplus profit or in any surplus on liquidation of the company, are called non-participating preference shares.
3) With reference to convertibility: Convertible preference shares and Non- convertible preference shares.
a) Convertible preference shares: Those preference shares, which can be converted into equity shares at the option of the holders after a fixed period according to the terms and conditions of their issue, are known as convertible preference shares.
b) Non- convertible preference shares: Preference shares, which are not convertible into equity shares, are called non-convertible preference shares.
Section 52(2) of the Companies Act, 2013 restricts the use of the amounts received as premium on securities for the following purposes:
(i) Issuing fully paid bonus shares to the members;
(ii) Writing off preliminary expenses of the company;
(iii) Writing off the expenses of, or the commission paid or discount allowed on any issue of securities or debentures of the company.
(iv)Providing for the premium payable on the redemption of any redeemable Preference Shares or any of the debentures of the company
(v) Buyback of shares
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
||||||||
Bank a/c |
Dr. |
|
3,50,000 |
|
|||||||
To share application a/c |
|
|
3,50,000 |
||||||||
(Application money received on 70,000 shares @ ₹5 per share including premium) |
|
|
|
||||||||
Share application a/c |
Dr. |
|
3,50,000 |
|
|||||||
To share capital a/c (50,000x ₹3) |
|
|
1,50,000 |
||||||||
To sec. premium a/c (50,000x ₹2) |
|
|
1,00,000 |
||||||||
To share allotment a/c |
|
|
60,000 |
||||||||
To Bank a/c |
|
|
40,000 |
||||||||
(Application money transferred to share capital, securities premium, allotment and balance refunded) |
|
|
|
||||||||
Share allotment a/c |
Dr. |
|
2,00,000 |
|
|||||||
To share capital a/c |
|
|
2,00,000 |
||||||||
(Share allotment money due on 50,000 shares @ ₹4 per share) |
|
|
|
||||||||
Bank a/c |
Dr. |
|
1,40,000 |
|
|||||||
To share allotment a/c |
|
|
1,40,000 |
||||||||
(Allotment money received) |
|
|
|
||||||||
Share first and final call |
Dr. |
|
1,50,000 |
|
|||||||
To share capital a/c |
|
|
1,50,000 |
||||||||
(Share first call due on 50,000 shares @ ₹3 per share) |
|
|
|
||||||||
Bank a/c |
Dr. |
|
1,48,500 |
|
|||||||
To share first and final call |
|
|
1,48,500 |
||||||||
(Share first and final call received on 49,500 shares @ ₹3 per share) |
|
|
|
||||||||
Share capital a/c |
Dr. |
|
5,000 |
|
|||||||
To share first & final call a/c |
|
|
1,500 |
||||||||
To share forfeiture a/c |
|
|
3,500 |
||||||||
(500 shares forfeited for non-payment of first and final call money) |
|
|
|
||||||||
Bank a/c |
Dr. |
|
4,000 |
|
|||||||
Share forfeiture a/c |
Dr. |
|
1,000 |
|
|||||||
To share capital a/c |
|
|
5,000 |
||||||||
(500 shares re-issued @ ₹8 per share) |
|
|
|
||||||||
Share forfeiture a/c |
Dr. |
|
2,500 |
|
|||||||
To capital reserve a/c |
|
|
2,500 |
||||||||
(Balance in share forfeiture transferred to capital reserve) |
|
|
|
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
|||||||||||
Bank a/c |
Dr. |
|
6,00,000 |
|
||||||||||
To share application a/c |
|
|
6,00,000 |
|||||||||||
(Application money received on 3,00,000 shares @ ₹2 per share) |
|
|
|
|||||||||||
Share application a/c |
Dr. |
|
6,00,000 |
|
||||||||||
To share capital a/c |
|
|
4,00,000 |
|||||||||||
To share allotment a/c |
|
|
2,00,000 |
|||||||||||
(Application money transferred to share capital and adjusted in share allotment) |
|
|
|
|||||||||||
Share allotment a/c |
Dr. |
|
10,00,000 |
|
||||||||||
To share capital a/c |
|
|
|
4,00,000 |
||||||||||
To securities premium a/c |
|
|
6,00,000 |
|||||||||||
(Share allotment money due on 2,00,000 shares @ ₹5 per share, including ₹3 securities premium) |
|
|
|
|||||||||||
Bank a/c |
Dr. |
|
7,98,400 |
|
||||||||||
To share allotment a/c |
|
|
7,98,400 |
|||||||||||
(Allotment money received on 2,99,600 shares less amount already received with application) |
|
|
|
|||||||||||
Share first call a/c |
Dr. |
|
6,00,000 |
|
||||||||||
To share capital a/c |
|
|
6,00,000 |
|||||||||||
(Share first call due on 2,00,000 shares @ ₹3 per share) |
|
|
|
|||||||||||
Bank a/c |
Dr. |
|
5,97,000 |
|
||||||||||
To Share first call a/c |
|
|
5,97,000 |
|||||||||||
(Share first call received on 1,99,000 shares @ ₹3 per share) |
|
|
|
|||||||||||
Share final call a/c |
Dr. |
|
2,40,000 |
|
||||||||||
To share capital a/c |
|
|
2,40,000 |
|||||||||||
(Share final call due on 1,20,000 shares @ ₹2 per share) |
|
|
|
|||||||||||
Share capital a/c |
Dr. |
|
2,800 |
|
||||||||||
Securities premium a/c |
Dr. |
|
1,200 |
|
||||||||||
To share allotment a/c |
|
|
1,600 |
|||||||||||
To share final call a/c |
|
|
1,200 |
|||||||||||
To share forfeiture a/c |
|
|
1,200 |
|||||||||||
(400 shares forfeited after first call for non-payment of allotment and first call) |
|
|
|
|||||||||||
Share second and final call a/c |
Dr. |
|
5,98,800 |
|
||||||||||
To share capital a/c |
|
|
5,98,800 |
|||||||||||
(Share final call due on 1,99,600 shares @ ₹3 per share) |
|
|
|
|||||||||||
Bank a/c |
Dr. |
|
5,97,000 |
|
||||||||||
To share second and final call a/c |
|
|
5,97,000 |
|||||||||||
(Share final call received on 1,99,000 shares @ ₹3 per share) |
|
|
|
|||||||||||
Share capital a/c |
Dr. |
|
6,000 |
|
||||||||||
To share first call a/c |
|
|
1,800 |
|||||||||||
To share final call a/c |
|
|
1,800 |
|||||||||||
To share forfeiture a/c |
|
|
2,400 |
|||||||||||
(600 shares forfeited for non-payment of first and final call money) |
|
|
|
|||||||||||
Bank a/c |
Dr. |
|
7,200 |
|
||||||||||
Share forfeiture a/c |
Dr. |
|
800 |
|
||||||||||
To share capital a/c |
|
|
8,000 |
|||||||||||
(800 shares re-issued @ ₹9 per share) |
|
|
|
|||||||||||
Share forfeiture a/c |
Dr. |
|
2,000 |
|
||||||||||
To capital reserve a/c |
|
|
2,000 |
|||||||||||
(Balance in share forfeiture transferred to capital reserve) |
|
|
|
Calculation of amount not received from Mohit on allotment:
₹ | |
Shares applied by Mohit |
600 |
Amount received on application from Mohit |
1,200 |
(600 x ₹2) |
|
Less: amount transferred on appli.(400x ₹2) |
(800) |
Advance of allotment received on appl. |
400 |
Mohit’s money due on allotment (400x ₹5) |
2,000 |
Less: excess already received with appli. |
(400) |
Amount not received from Mohit on allotment |
1,600 |
Calculation of money received on allotment:
₹ | |
Total amount due on allotment |
10,00,000 |
Less: received on application as advance |
2,00,000 |
|
8,00,000 |
Less: Amount not received from Mohit |
(1,600) |
Amount received on allotment |
7,98,400 |
Capital reserve = Mohit’s capital reserve + Joly’s capital reserve
₹800 (1,200 – 400) + ₹1,200 (1,600 – 400) = ₹2,000.
‘Over Subscription’ is a case when applications for more shares are received than the number offered to the public for subscription. In such condition, three alternatives are available to the directors to deal with the situation:
1) They can accept some applications in full and totally reject the others.
2) They can make a pro rata allotment to all. and
3) They can adopt a combination of the above two alternatives.
a) First alternative, when the directors decide to fully accept some applications and totally reject the others. For example, a company invited applications for 20,000 shares and received the applications for 30,000 shares. The directors rejected the applications for 10,000 shares which are in excess of the required number and refunded their application money in full.
b) Second alternative, in this directors opt to make a proportionate allotment to all applicants (called pro-rata allotment) the excess application money received is normally adjusted towards the amount due on allotment. For example, in the event of applications for 20,000 shares being invited and those received are for 30,000 shares, it is decided to allot shares in the ratio of 2:3 to all applicants. It is a case of pro rata allotment and the excess application money received on 10,000 shares would be adjusted towards the amount due on the allotment of 20,000 shares.
c) Third alternative, when the application for some shares is rejected out rightly and pro rata allotment is made to the remaining applicants, the money on rejected applications is refunded and the excess application money received from applicants to whom pro rata allotment has been made is adjusted towards the amount due on the allotment of shares allotted. For example, in the event of applications for 20,000 shares being invited and those received are for 30,000 shares. The directors decided to reject the application for 5,000 shares outright and to make pro rata allotment of 20,000 shares to the applicants for the remaining 25,000 shares so that 4 shares are allotted to every 5 shares applied. In this case, the money on applications for 5,000 shares rejected would be refunded fully and on the remaining 5,000 shares (25,000 – 20,000) would be adjusted against the allotment amount due on 20,000 shares.
Shares refer to the units into which the total share capital of a company is divided. Thus a share is a fractional part of the share capital and forms the basis of ownership interests in the company. The persons who contribute money through shares are called shareholders. As per Section 43 of the Companies Act, 2013 a Company may issue two types of shares:
(1) Preference Shares
(2) Equity Shares
(1) Preference Shares: These shares carry the following two preferential rights:
(a) Dividend at a fixed rate before any dividend is paid to equity shares.
(b) Repayment of capital before anything is paid to equity shares.
However, notwithstanding the above two conditions, a holder of preference shares may have a right to participate fully or to a limited extent in the surpluses of the company as specified in the Memorandum or Articles of the Company. Thus preference shares can be participating or non-participating, cumulative or non-cumulative with reference to dividend, convertible and non-convertible.
(2) Equity Shares: Equity share is that share which is not a preference share. The dividend on equity shares is not fixed and it may vary from year to year depending upon the amount of profits available for distribution. These are the most commonly issued class of shares which carry the maximum rewards and risks of the business.
The various terms used in connection with the Share Capital of the company are the following:
(i) Authorised, Registered or Nominal Capital: It is the maximum capital which a company is authorised to issue shares during its lifetime. Authorised capital is stated in the Memorandum of Association.
(ii) Issued Capital: It is that part of Authorised Capital which is actually offered to the public for subscription.
(iii) Subscribed Capital: It is that part of the Issued Capital which has been subscribed for by the public. Subscribed Capital is shown in the Balance Sheet under two heads:
a) Subscribed and fully paid up: Subscribed and fully paid up capital: It is a case when entire nominal value of a share is called by the company and also paid by the shareholder.
b) Subscribed but not fully paid up: It is a case when:
(i) The company has called up the full nominal value of the share but the shareholder has not paid some part of the nominal value of the share.
(ii) The company has not called up the full nominal value of the share.
(iii) Called up Capital: It refers to that part of the face value of a share called by the directors from shareholders.
(iv) Paid up Capital: It refers to that part of the Called up Capital which has been actually received from the shareholders. When the shareholders have paid the entire call amount, the called up capital and paid up capital are same.
A company is an association of person who contribute money or money’s worth to a common inventory and uses it for a common purpose. Company has certain special features which distinguish it from the other forms of organisation. These are as follows:
a) Body corporate: A company is formed according to the provisions of law enforced from time to time. Generally in India Companies are registered and formed under Companies Act.
b) Separate legal entity: A company has a separate legal entity which is which is distinct and separate from its members. It can hold and deal with any type of property. It can enter into contracts and even open a bank account in its own name.
c) Limited liability: The liability of the members of the company is limited to the extent of unpaid amount of the shares held by them.
d) Perpetual succession: A company being an artificial person created by law can be terminated only through law. The death or insanity or insolvency of any member of the company in no way affects the existence of the company.
e) Common seal: A Company being an artificial person cannot sign its name by itself. Therefore every company is required to have its own seal which acts as official signature of the company.
f) Transferability of shares: The shares of a public limited company are freely transferable. But the articles of the company can prescribe the manner in which the transfer of shares will be made.
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
|||||||||||
Bank a/c |
Dr. |
|
20,00,000 |
|
||||||||||
To share application a/c |
|
|
20,00,000 |
|||||||||||
(Application money received on 50,000 shares @ ₹40 per share) |
|
|
|
|||||||||||
Share application a/c |
Dr. |
|
20,00,000 |
|
||||||||||
To share capital a/c |
|
|
16,00,000 |
|||||||||||
To share allotment a/c |
|
|
4,00,000 |
|||||||||||
(Application money transferred to share capital and adjusted in share allotment) |
|
|
|
|||||||||||
Share allotment a/c |
Dr. |
|
16,00,000 |
|
||||||||||
To share capital a/c |
|
|
|
8,00,000 |
||||||||||
To securities premium a/c |
|
|
8,00,000 |
|||||||||||
(Share allotment money due on 40,000 shares @ ₹40 per share, including ₹20 securities premium) |
|
|
|
|||||||||||
Bank a/c |
Dr. |
|
11,82,000 |
|
||||||||||
To share allotment a/c |
|
|
11,82,000 |
|||||||||||
(Allotment money received on 39,400 shares @ ₹40 per share less amount already) |
|
|
|
|||||||||||
Share capital a/c |
Dr. |
|
36,000 |
|
||||||||||
Securities premium a/c |
Dr. |
|
12,000 |
|
||||||||||
To share allotment a/c |
|
|
18,000 |
|||||||||||
To share forfeiture a/c |
|
|
30,000 |
|||||||||||
(600 shares forfeited for non-payment of allotment money) |
|
|
|
|||||||||||
Share first call a/c |
Dr. |
|
9,85,000 |
|
||||||||||
To share capital a/c |
|
|
9,85,000 |
|||||||||||
(Share first call due on 39,400 shares @ ₹25 per share) |
|
|
|
|||||||||||
Bank a/c |
Dr. |
|
9,65,000 |
|
||||||||||
To Share first call a/c |
|
|
9,65,000 |
|||||||||||
(Share first call received on 38,600 shares @ ₹25 per share) |
|
|
|
|||||||||||
Share second & final call a/c |
Dr. |
|
5,91,000 |
|
||||||||||
To share capital a/c |
|
|
5,91,000 |
|||||||||||
(Share final call due on 39,400 shares @ ₹15 per share) |
|
|
|
|||||||||||
Bank a/c |
Dr. |
|
5,79,000 |
|
||||||||||
To Share second & final call a/c |
|
|
5,79,000 |
|||||||||||
(Share final call received on 38,600 shares @ ₹15 per share) |
|
|
|
|||||||||||
Share capital a/c |
Dr. |
|
80,000 |
|
||||||||||
To share second & final a/c |
|
|
12,000 |
|||||||||||
To Share first call a/c |
|
|
20,000 |
|||||||||||
To share forfeiture a/c |
|
|
48,000 |
|||||||||||
(800 shares forfeited for non-payment of two calls money) |
|
|
|
|||||||||||
Bank a/c |
Dr. |
|
1,02,000 |
|
||||||||||
Share forfeiture a/c |
Dr. |
|
18,000 |
|
||||||||||
To share capital a/c |
|
|
1,20,000 |
|||||||||||
(1,200 shares re-issued @ ₹85 per share as fully paid up) |
|
|
|
|||||||||||
Share forfeiture a/c |
Dr. |
|
48,000 |
|
||||||||||
To capital reserve a/c |
|
|
48,000 |
|||||||||||
(Balance in share forfeiture transferred to capital reserve) |
|
|
|
Working notes:
Calculation of amount not received from Rohit on the allotment:
Shares applied by Rohit |
750 |
Amount received on application from Rohit (750 x₹40) |
30,000 |
Less: amount adjusted on appli.(600 x ₹40) |
(24,000) |
Advance of allotment received on appl. |
6,000 |
Rohit’s money due on allotment (600 x ₹40) |
24,000 |
Less: excess already received with appli. |
(6,000) |
Amount not received from Rohit on allotment |
18,000 |
Calculation of money received on allotment:
₹ | |
Total amount due on the allotment (40,000x ₹40) |
16,00,000 |
Less: received on the application as advance |
4,00,000 |
|
12,00,000 |
Less: Amount not received from Rohit |
(18,000) |
Amount received on the allotment |
11,82,000 |
Calculation of Capital reserve
On 600 shares of Rohit + on 600 shares of Ashmita
₹21,000 + ₹27,000 = ₹48,000
Case (a)
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
|||
Share capital a/c |
Dr. |
|
16,000 |
|
||
Securities Prem. Res. a/c | Dr. | 2,000 | ||||
To share forfeiture a/c |
|
|
6,000 |
|||
To share allotment a/c |
|
|
12,000 |
|||
(200 shares forfeited for failing to pay the amount due on allotment) |
|
|
|
|||
Bank a/c |
Dr. |
|
14,000 |
|
||
Share forfeiture a/c |
Dr. |
|
6,000 |
|
||
To share capital a/c |
|
|
20,000 |
|||
(200 shares reissued at the rate of ₹70 per share fully paid up) |
|
|
|
Case (b)
Particulars |
|
Dr. ₹ |
Cr. ₹ |
|||
Share capital a/c |
Dr. |
|
900 |
|
||
Securities premium a/c |
Dr. |
|
600 |
|
||
To share forfeiture a/c |
|
|
300 |
|||
To calls-in-arrear a/c |
|
|
1,200 |
|||
(150 shares forfeited for non-payment of allotment money inc) |
|
|
|
|||
Bank a/c |
Dr. |
|
2,250 |
|
||
To share capital a/c |
|
|
1,500 |
|||
To securities premium a/c |
|
|
750 |
|||
(150 shares re-issued @ ₹15 per share fully paid) |
|
|
|
|||
Share forfeiture a/c |
Dr. |
|
300 |
|
||
To capital reserve a/c |
|
|
300 |
|||
(Balance in share forfeiture transferred to capital reserve) |
|
|
|
Case (c)
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
||||
Share capital a/c |
Dr. |
|
20,000 |
|
|||
To share forfeiture a/c |
|
|
16,000 |
||||
To share final call a/c |
|
|
4,000 |
||||
(400 shares forfeited for failing to pay the amount due on final call) |
|
|
|
||||
Bank a/c |
Dr. |
|
18,000 |
|
|||
Share forfeiture a/c |
Dr. |
|
2,000 |
|
|||
To share capital a/c |
|
|
20,000 |
||||
(400 shares reissued at the rate of ₹45 per share fully paid up) |
|
|
|
||||
Share forfeiture a/c |
Dr. |
|
14,000 |
|
|||
To capital reserve a/c |
|
|
14,000 |
||||
(Balance in share forfeiture transferred to capital reserve) |
|
|
|
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
|||||||||
Bank a/c (24,000 x ₹2) |
Dr. |
|
48,000 |
|
||||||||
To share application a/c |
|
|
48,000 |
|||||||||
(Application money received on 24,000 shares @ ₹2 per share) |
|
|
|
|||||||||
Share application a/c |
Dr. |
|
48,000 |
|
||||||||
To share capital a/c (20,000x ₹2) |
|
|
40,000 |
|||||||||
To Bank a/c (4,000 x ₹2) |
|
|
8,000 |
|||||||||
(Application money transferred to share capital and balance refunded) |
|
|
|
|||||||||
Share allotment a/c |
Dr. |
|
60,000 |
|
||||||||
To share capital a/c |
|
|
60,000 |
|||||||||
(Share allotment money due on 20,000 shares @ ₹3 per share) |
|
|
|
|||||||||
Bank a/c |
Dr. |
|
60,000 |
|
||||||||
To share allotment a/c |
|
|
60,000 |
|||||||||
(Allotment money received) |
|
|
|
|||||||||
Share first call a/c |
Dr. |
|
50,000 |
|
||||||||
To share capital a/c |
|
|
50,000 |
|||||||||
(Share first call due on 20,000 shares @ ₹2.5 per share) |
|
|
|
|||||||||
Bank a/c |
Dr. |
|
50,000 |
|
||||||||
To share first call a/c |
|
|
50,000 |
|||||||||
(Share first call money received) |
|
|
|
|||||||||
Share final call a/c |
Dr. |
|
50,000 |
|
||||||||
To share capital a/c |
|
|
50,000 |
|||||||||
(Share final call due on 20,000 shares @ ₹2.5 per share) |
|
|
|
|||||||||
Bank a/c |
Dr. |
|
48,500 |
|
||||||||
To share final call a/c |
|
|
48,500 |
|||||||||
(Share final call money received on 19,400 shares) |
|
|
|
|||||||||
Share capital a/c |
Dr. |
|
6,000 |
|
||||||||
To share final call a/c |
|
|
1,500 |
|||||||||
To share forfeiture a/c |
|
|
4,500 |
|||||||||
(600 shares forfeited for non-payment of final call money) |
|
|
|
|||||||||
Bank a/c |
Dr. |
|
3,600 |
|
||||||||
Share forfeiture a/c |
Dr. |
|
400 |
|
||||||||
To share capital a/c |
|
|
4,000 |
|||||||||
(400 shares re-issued @ ₹9 per share) |
|
|
|
|||||||||
Share forfeiture a/c |
Dr. |
|
2,600 |
|
||||||||
To capital reserve a/c |
|
|
2,600 |
|||||||||
(Balance in share forfeiture transferred to capital reserve for 400 shares) |
|
|
|
Balance Sheet (Extract)
Particulars |
Note no. |
₹ |
I. Equity and Liabilities |
|
|
1. Shareholders’ Funds |
|
|
Share Capital |
|
1,99,500 |
Reserves and Surplus |
|
2,600 |
II Assets |
|
|
1. Cash and cash equivalents |
|
2,02,100 |
Notes to Accounts:
Particulars |
₹ |
|
1. Share Capital |
|
|
Authorised Capital |
|
|
30,000 shares of ₹10 each |
3,00,000 |
|
Issued Capital |
|
|
20,000 shares of ₹10 each |
2,00,000 |
|
Subscribed Capital |
|
|
Subscribed and fully paid-up |
|
|
19,800 shares of ₹10 each |
1,98,000 |
|
Add: Share forfeiture |
1,500 |
1,99,500 |
2. Reserves and Surplus |
|
|
Capital reserve |
2,600 |
|
3. Cash and Cash Equivalents |
|
|
Cash at bank |
2,02,100 |
Working notes:
Calculation of capital reserve
Credit balance in share forfeiture for (400x ₹7.5) |
3,000 |
Less: Debit balance of share forfeiture (400x ₹1) |
400 |
Amount to be transferred to capital reserve |
2,600 |
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
||||
Share capital a/c |
Dr. |
|
4,800 |
|
|||
To share forfeiture a/c |
|
|
2,500 |
||||
To share allotment a/c |
|
|
200 |
||||
To share first call a/c |
|
|
900 |
||||
To share second call a/c |
|
|
1,200 |
||||
(600 shares forfeited for failing to pay the amount after making second call) |
|
|
|
||||
Bank a/c |
Dr. |
|
6,600 |
|
|||
To share capital a/c |
|
|
6,000 |
||||
To securities premium a/c |
|
|
600 |
||||
(600 shares reissued at the rate of ₹11 per share, fully paid up) |
|
|
|
||||
Share forfeiture a/c |
Dr. |
|
2,500 |
|
|||
To capital reserve a/c |
|
|
2,500 |
||||
(Balance in share forfeiture transferred to capital reserve after the re-issue) |
|
|
|
Calculation of amount transferred to capital reserve:
₹ | |
Application money received from Amit (100 shares x ₹1 ) |
100 |
Application and allotment money received from Bimal (200 shares x ₹3) |
600 |
Application, allotment and first call money received from Chetan (300 shares x ₹6) |
1,800 |
Transferred to capital reserve |
2,500 |
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
|||||
Share application a/c |
Dr. |
|
25,00,000 |
|
||||
To share capital a/c (4,00,000 x ₹5) |
|
|
20,00,000 |
|||||
To share allotment a/c |
|
|
4,00,000 |
|||||
To bank a/c |
|
|
1,00,000 |
|||||
(Application money transferred to share capital account, refunded and transferred to share allotment ) |
|
|
|
|||||
Share allotment a/c |
Dr. |
|
12,00,000 |
|
||||
To share capital a/c |
|
|
12,00,000 |
|||||
(Share allotment money due on 4,00,000 shares @ ₹3 per share) |
|
|
|
|||||
Share first and final call |
Dr. |
|
8,00,000 |
|
||||
To share capital a/c |
|
|
8,00,000 |
|||||
(Share first and final call due on 4,00,000 shares @ ₹2 per share) |
|
|
|
|||||
Share capital a/c |
Dr. |
|
4,000 |
|
||||
To share forfeiture a/c |
|
|
2,500 |
|||||
To share allotment a/c |
|
|
700 |
|||||
To share first and final call a/c |
|
|
800 |
|||||
(400 shares forfeited for failing to pay the amount due on allotment and call) |
|
|
|
|||||
Share forfeiture a/c |
Dr. |
|
400 |
|
||||
To share capital a/c |
|
|
400 |
|||||
(Discount on reissue debited to share capital) |
|
|
|
|||||
Share forfeiture a/c |
Dr. |
|
2,100 |
|
||||
To capital reserve a/c |
|
|
2,100 |
|||||
(Balance in share forfeiture transferred to capital reserve) |
|
|
|
Cash Book (Bank column only)
Particulars |
₹ |
Particulars |
₹ |
To share |
|
By share |
|
application a/c |
25,00,000 |
application a/c |
1,00,000 |
To share |
|
By balance c/d |
40,02,100 |
allotment a/c |
7,99,300 |
|
|
To share first and |
|
|
|
final call |
7,99,200 |
|
|
To share capital a/c |
3,600 |
|
|
|
41,02,100 |
|
41,02,100 |
Working notes:
Calculation of amount not received on 400 shares allotted:
Shares applied |
500 |
Amount received on application |
2,500 |
(500 x ₹5) |
|
Less: amount transferred on appli.(400x ₹5) |
2,000 |
Advance of allotment received on appl. |
500 |
Amount due on allotment (400x ₹3) |
1,200 |
Less: excess already received with appli. |
500 |
Amount not received on allotment |
700 |
Calculation of money received on the allotment:
₹ | |
Total amount due on allotment |
12,00,000 |
Less: received on the application as advance |
(4,00,000) |
|
8,00,000 |
Less: Amount not received on 400 shares |
(700) |
Amount received on allotment |
7,99,300 |
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
|||||||||||
Bank a/c |
Dr. |
|
52,000 |
|
||||||||||
To share application a/c |
|
|
52,000 |
|||||||||||
(Application money received on 26,000 shares @ ₹2 per share) |
|
|
|
|||||||||||
Share application a/c |
Dr. |
|
52,000 |
|
||||||||||
To share capital a/c |
|
|
40,000 |
|||||||||||
To share allotment a/c |
|
|
4,000 |
|||||||||||
To bank a/c |
|
|
8,000 |
|||||||||||
(Application money transferred to share capital, adjusted in share allotment and rejected shares refunded) |
|
|
|
|||||||||||
Share allotment a/c |
Dr. |
|
80,000 |
|
||||||||||
To share capital a/c |
|
|
60,000 |
|||||||||||
To securities premium a/c |
|
|
20,000 |
|||||||||||
(Share allotment money due on 20,000 shares @ ₹4 per share, including ₹1 securities premium) |
|
|
|
|||||||||||
Bank a/c |
Dr. |
|
76,000 |
|
||||||||||
To share allotment a/c |
|
|
76,000 |
|||||||||||
(Allotment money received on 20,000 shares @ ₹4 per share less amount already) |
|
|
|
|||||||||||
Share first call a/c |
Dr. |
|
60,000 |
|
||||||||||
To share capital a/c |
|
|
60,000 |
|||||||||||
(Share first call due on 20,000 shares @ ₹3 per share) |
|
|
|
|||||||||||
Bank a/c |
Dr. |
|
60,000 |
|
||||||||||
To Share first call a/c |
|
|
60,000 |
|||||||||||
(Share first call received on 20,000 shares @ ₹3 per share) |
|
|
|
|||||||||||
Share second & final call a/c |
Dr. |
|
40,000 |
|
||||||||||
To share capital a/c |
|
|
40,000 |
|||||||||||
(Share final call due on 20,000 shares @ ₹2 per share) |
|
|
|
|||||||||||
Bank a/c |
Dr. |
|
39,000 |
|
||||||||||
To Share second & final call a/c |
|
|
39,000 |
|||||||||||
(Share final call received on 19,500 shares @ ₹2 per share) |
|
|
|
|||||||||||
Share capital a/c |
Dr. |
|
5,000 |
|
||||||||||
To share second & final a/c |
|
|
1,000 |
|||||||||||
To share forfeiture a/c |
|
|
4,000 |
|||||||||||
(500 shares forfeited for non-payment of second and final call money) |
|
|
|
|||||||||||
Bank a/c |
Dr. |
|
2,700 |
|
||||||||||
Share forfeiture a/c |
Dr. |
|
300 |
|
||||||||||
To share capital a/c |
|
|
3,000 |
|||||||||||
(300 shares re-issued @ ₹9 per share) |
|
|
|
|||||||||||
Share forfeiture a/c |
Dr. |
|
2,100 |
|
||||||||||
To capital reserve a/c |
|
|
2,100 |
|||||||||||
(Balance in share forfeiture transferred to capital reserve for 300 shares) |
|
|
|
₹ | |
Credit balance in share forfeiture for 300 shares (300 x ₹8) |
2,400 |
Less: Debit balance of share forfeiture |
(300) |
Amount to be transferred to capital reserve |
2,100 |
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
|||||||||||
Bank a/c |
Dr. |
|
4,80,000 |
|
||||||||||
To share application a/c |
|
|
4,80,000 |
|||||||||||
(Application money received on 1,60,000 shares @ ₹3 per share) |
|
|
|
|||||||||||
Share application a/c |
Dr. |
|
4,80,000 |
|
||||||||||
To share capital a/c |
|
|
3,60,000 |
|||||||||||
To share allotment a/c |
|
|
1,20,000 |
|||||||||||
(Application money transferred to share capital and adjusted in share allotment) |
|
|
|
|||||||||||
Share allotment a/c |
Dr. |
|
6,00,000 |
|
||||||||||
To share capital a/c |
|
|
|
3,60,000 |
||||||||||
To securities premium a/c |
|
|
2,40,000 |
|||||||||||
(Share allotment money due on 1,20,000 shares @ ₹5 per share, including ₹2 securities premium) |
|
|
|
|||||||||||
Bank A/c |
Dr. |
|
4,80,000 |
|
||||||||||
To share allotment a/c |
|
|
4,80,000 |
|||||||||||
(Allotment money received on 1,20,000 shares @ ₹5 per share less amount already) |
|
|
|
|||||||||||
Share first call a/c |
Dr. |
|
2,40,000 |
|
||||||||||
To share capital a/c |
|
|
2,40,000 |
|||||||||||
(Share first call due on 1,20,000 shares @ ₹2 per share) |
|
|
|
|||||||||||
Bank a/c |
Dr. |
|
2,30,400 |
|
||||||||||
To Share first call a/c |
|
|
2,30,400 |
|||||||||||
(Share first call received on 1,15,200 shares @ ₹2 per share) |
|
|
|
|||||||||||
Share final call a/c |
Dr. |
|
2,40,000 |
|
||||||||||
To share capital a/c |
|
|
2,40,000 |
|||||||||||
(Share final call due on 1,20,000 shares @ ₹2 per share) |
|
|
|
|||||||||||
Bank a/c |
Dr. |
|
2,30,400 |
|
||||||||||
To Share final call a/c |
|
|
2,30,400 |
|||||||||||
(Share final call received on 1,15,200 shares @ ₹2 per share) |
|
|
|
|||||||||||
Share capital a/c |
Dr. |
|
48,000 |
|
||||||||||
To share first call a/c |
|
|
9,600 |
|||||||||||
To share final call a/c |
|
|
9,600 |
|||||||||||
To share forfeiture a/c |
|
|
28,800 |
|||||||||||
(4800 shares forfeited for non-payment of first and final call money) |
|
|
|
|||||||||||
Bank a/c |
Dr. |
|
33,600 |
|
||||||||||
Share forfeiture a/c |
Dr. |
|
14,400 |
|
||||||||||
To share capital a/c |
|
|
48,000 |
|||||||||||
(4800 shares re-issued @ ₹7 per share) |
|
|
|
|||||||||||
Share forfeiture a/c |
Dr. |
|
14,400 |
|
||||||||||
To capital reserve a/c |
|
|
14,400 |
|||||||||||
(Balance in share forfeiture transferred to capital reserve for 4800 shares) |
|
|
|
₹ | |
Amount due on allotment (1,20,000 x ₹5) |
6,00,000 |
Less: Already received with application |
(1,20,000) |
Money received with allotment |
4,80,000 |
Himalaya Company Limited Balance Sheet |
||
Particulars |
Note No. |
(₹) |
I. Equity and Liabilities |
|
|
1. Shareholders’ Funds |
|
|
a. Share Capital |
1 |
12,00,000 |
b. Reserves and Surplus |
2 |
2,54,400 |
2. Non-Current Liabilities |
|
|
3. Current Liabilities |
|
|
Total |
|
14,54,400 |
II. Assets |
|
|
1. Non-Current Assets |
|
|
2. Current Assets |
|
|
a. Cash and Cash Equivalents |
3 |
14,54,400 |
|
|
14,54,400 |
Notes to Accounts:
Particulars |
₹ |
|
1. Share Capital |
|
|
Authorised Capital |
|
|
……. shares of ₹10 each |
|
|
Issued Capital |
|
|
1,20,000 shares of ₹10 each |
12,00,000 |
|
Subscribed Capital |
|
|
1,20,000 shares of ₹10 each |
|
12,00,000 |
2. Reserves and Surplus |
|
|
Securities Premium 2,40,000 |
|
|
Capital Reserve 14,400 |
2,54,400 |
|
3. Cash and Cash Equivalents |
|
|
Cash at Bank |
14,54,400 |
Amount of securities premium will be ignored as it is already received on shares forfeited.
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
|||||||||||
Bank a/c |
Dr. |
|
2,00,000 |
|
||||||||||
To share application a/c |
|
|
2,00,000 |
|||||||||||
(Application money received on 10,000 shares @ ₹20 per share) |
|
|
|
|||||||||||
Share application a/c |
Dr. |
|
2,00,000 |
|
||||||||||
To share capital a/c |
|
|
2,00,000 |
|||||||||||
(Application money transferred to share capital) |
|
|
|
|||||||||||
Share allotment a/c |
Dr. |
|
5,00,000 |
|
||||||||||
To Securities Premium a/c |
Dr. |
|
|
1,00,000 |
||||||||||
To share capital a/c |
|
|
4,00,000 |
|||||||||||
(Share allotment money due on 10,000 shares @ ₹50 per share, ₹10 premium) |
|
|
|
|||||||||||
Bank a/c |
Dr. |
|
5,00,000 |
|
||||||||||
To share allotment a/c |
|
|
5,00,000 |
|||||||||||
(Allotment money received on 10,000 shares @ ₹50 per share) |
|
|
|
|||||||||||
Share first call a/c |
Dr. |
|
3,00,000 |
|
||||||||||
To share capital a/c |
|
|
3,00,000 |
|||||||||||
(Share first call due on 10,000 shares @ ₹30 per share) |
|
|
|
|||||||||||
Bank a/c |
Dr. |
|
3,00,000 |
|
||||||||||
To Share first call a/c |
|
|
3,00,000 |
|||||||||||
(Share first call received on 10,000 shares @ ₹30 per share) |
|
|
|
|||||||||||
Share final call a/c |
Dr. |
|
1,00,000 |
|
||||||||||
To share capital a/c |
|
|
1,00,000 |
|||||||||||
(Share final call due on 10,000 shares @ ₹10 per share) |
|
|
|
|||||||||||
Bank a/c |
Dr. |
|
98,000 |
|
||||||||||
To Share final call a/c |
|
|
98,000 |
|||||||||||
(Share final call received on 9,800 shares @ ₹10 per share) |
|
|
|
|||||||||||
Share capital a/c |
Dr. |
|
20,000 |
|
||||||||||
To share forfeiture a/c |
|
|
18,000 |
|||||||||||
To calls-in-arrear a/c |
|
|
2,000 |
|||||||||||
(200 shares forfeited for non-payment of final call @ ₹10 per share) |
|
|
|
|||||||||||
Bank a/c |
Dr. |
|
11,250 |
|
||||||||||
Share forfeiture a/c |
Dr. |
|
3,750 |
|
||||||||||
To share capital a/c |
|
|
15,000 |
|||||||||||
(150 shares re-issued @ ₹75 per share, fully paid up) |
|
|
|
|||||||||||
Share forfeiture a/c |
Dr. |
|
9,750 |
|
||||||||||
To capital reserve a/c |
|
|
9,750 |
|||||||||||
(Balance in share forfeiture transferred to capital reserve after adjustment of 150 reissued shares) |
|
|
|
Amount of share forfeiture on forfeited shares = 200 x ₹90 = ₹18,000.
Calculation of capital reserve
Credit balance on 150 shares (150 x ₹80) |
₹13,500 |
Less: Debit balance on re-issued shares |
₹3,750 |
Capital reserve |
₹9,750 |
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
||||||||
Bank a/c (20,000 x ₹25) |
Dr. |
|
4,50,000 |
|
|||||||
To share application a/c |
|
|
4,50,000 |
||||||||
(Application money received on 15,000 shares @ ₹30 per share) |
|
|
|
||||||||
Share application a/c |
Dr. |
|
4,50,000 |
|
|||||||
To share capital a/c |
|
|
4,50,000 |
||||||||
(Application money transferred to share capital) |
|
|
|
||||||||
Share allotment a/c |
Dr. |
|
7,50,000 |
|
|||||||
To share capital a/c |
|
|
6,00,000 |
||||||||
To sec. premium a/c |
|
|
1,50,000 |
||||||||
(Share allotment money due on 15,000 shares @ ₹50 per share, including ₹10 securities premium) |
|
|
|
||||||||
Bank a/c |
Dr. |
|
7,42,500 |
|
|||||||
To share allotment a/c |
|
|
7,42,500 |
||||||||
(Allotment money received on 14,850 shares @ ₹50 per share) |
|
|
|
||||||||
Share first and final call a/c |
Dr. |
|
4,50,000 |
|
|||||||
To share capital a/c |
|
|
4,50,000 |
||||||||
(Share first and final call due on 15,000 shares @ ₹30 per share) |
|
|
|
||||||||
Bank a/c |
Dr. |
|
4,45,500 |
|
|||||||
To share first and final call a/c |
|
|
4,45,500 |
||||||||
(Share first and final call received on 14,850 shares @ ₹30 per share) |
|
|
|
||||||||
Share capital a/c |
Dr. |
|
15,000 |
|
|||||||
Securities premium a/c |
Dr. |
|
1,500 |
|
|||||||
To share forfeiture a/c |
|
|
4,500 |
||||||||
To calls-in-arrear a/c |
|
|
12,000 |
||||||||
(150 shares forfeited for non-payment of allotment and first and final call money) |
|
|
|
||||||||
Bank a/c |
Dr. |
|
18,000 |
|
|||||||
To share capital a/c |
|
|
15,000 |
||||||||
To securities premium a/c |
|
|
3,000 |
||||||||
(150 shares re-issued @ ₹120 per share) |
|
|
|
||||||||
Share forfeiture a/c |
Dr. |
|
4,500 |
|
|||||||
To capital reserve a/c |
|
|
4,500 |
||||||||
(Balance in share forfeiture transferred to capital reserve) |
|
|
|
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
|||||||
Bank a/c (20,000 x ₹25) |
Dr. |
|
5,00,000 |
|
||||||
To share application a/c |
|
|
5,00,000 |
|||||||
(Application money received on 20,000 shares @ ₹25 per share) |
|
|
|
|||||||
Share application a/c |
Dr. |
|
5,00,000 |
|
||||||
To share capital a/c |
|
|
5,00,000 |
|||||||
(Application money transferred to share capital) |
|
|
|
|||||||
Share allotment a/c |
Dr. |
|
6,00,000 |
|
||||||
To share capital a/c |
|
|
6,00,000 |
|||||||
(Share allotment money due on 20,000 shares @ ₹30 per share) |
|
|
|
|||||||
Bank a/c |
Dr. |
|
5,94,000 |
|
||||||
To share allotment a/c |
|
|
5,94,000 |
|||||||
(Allotment money received on 19,800 shares @ ₹30 per share) |
|
|
|
|||||||
Share first call a/c |
Dr. |
|
5,00,000 |
|
||||||
To share capital a/c |
|
|
5,00,000 |
|||||||
(Share first call due on 20,000 shares @ ₹25 per share) |
|
|
|
|||||||
Bank a/c |
Dr. |
|
4,92,500 |
|
||||||
To share first call |
|
|
4,92,500 |
|||||||
(Share first call received on 19,700 shares @ ₹25 per share) |
|
|
|
|||||||
Share final call a/c |
Dr. |
|
4,00,000 |
|
||||||
To share capital a/c |
|
|
4,00,000 |
|||||||
(Share final call due on 20,000 shares @ ₹20 per share) |
|
|
|
|||||||
Bank a/c |
Dr. |
|
3,94,000 |
|
||||||
To share final call |
|
|
3,94,000 |
|||||||
(Share final call money received on 19,700 shares @ ₹20 per share) |
|
|
|
|||||||
Share capital a/c |
Dr. |
|
30,000 |
|
||||||
To share forfeiture a/c |
|
|
10,500 |
|||||||
To calls-in-arrear a/c |
|
|
19,500 |
|||||||
(300 shares forfeited for failing to pay the amount due) |
|
|
|
Calculation of amount received on shares forfeited.
Application money on 300 shares (300 x ₹25) = ₹7,500
Allotment money on 100 shares (100 x ₹30) = ₹3,000
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
||
Machinery A/c |
Dr. |
|
3,20,000 |
|
|
To Cash a/c |
|
|
|
50,000 |
|
To Handa trader’s a/c |
|
|
2,70,000 |
||
(Purchased machinery for Handa traders and payment made in part) |
|
|
|
||
Handa trader’s a/c |
Dr. |
|
2,70,000 |
|
|
To share capital a/c |
|
|
2,70,000 |
||
(2700 shares issued to Handa Traders @ ₹100 each) |
|
|
|
Case (i)
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
||
Sundry Assets a/c |
Dr. |
|
6,30,000 |
|
|
To Bhanu Oil Ltd’s a/c |
|
|
6,30,000 |
||
(Assets purchased from Bhanu Oil Ltd) |
|
|
|
||
Bhanu Oil Ltd’s a/c |
Dr. |
|
6,30,000 |
|
|
To share capital a/c |
|
|
6,30,000 |
||
(Shares issued to Bhanu Oil Ltd. at par) |
|
|
|
Case (ii)
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
||
Sundry Assets A/c |
Dr. |
|
6,30,000 |
|
|
To Bhanu Oil Ltd’s a/c |
|
|
6,30,000 |
||
(Assets purchased from Bhanu Oil Ltd) |
|
|
|
||
Bhanu Oil Ltd’s a/c |
Dr. |
|
6,30,000 |
|
|
To share capital a/c |
|
|
5,25,000 |
||
To securities premium a/c |
|
|
1,05,000 |
||
(5,250 Shares issued to Bhanu Oil Ltd. at a premium of 20% for assets purchased) |
|
|
|
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
|||||||
Bank A/c |
Dr. |
|
12,50,000 |
|
||||||
To share application a/c |
|
|
12,50,000 |
|||||||
(Application money received on 50,000 shares @ ₹25 per share) |
|
|
|
|||||||
Share application a/c |
Dr. |
|
12,50,000 |
|
||||||
To share capital a/c |
|
|
12,50,000 |
|||||||
(Application money transferred to share capital) |
|
|
|
|||||||
Share allotment a/c |
Dr. |
|
25,00,000 |
|
||||||
To Premium on issue a/c |
|
|
|
2,50,000 |
||||||
To share capital a/c |
|
|
22,50,000 |
|||||||
(Share allotment money due on 50,000 shares @ ₹50 per share, and ₹5 premium) |
|
|
|
|||||||
Bank a/c |
Dr. |
|
25,00,000 |
|
||||||
To share allotment a/c |
|
|
25,00,000 |
|||||||
(Allotment money received on 50,000 shares @ ₹50 per share) |
|
|
|
|||||||
Share first and final call a/c |
Dr. |
|
15,00,000 |
|
||||||
To share capital a/c |
|
|
15,00,000 |
|||||||
(Share first call due on 50,000 shares @ ₹30 per share) |
|
|
|
|||||||
Bank a/c |
Dr. |
|
14,88,000 |
|
||||||
To Share first and final call a/c |
|
|
14,88,000 |
|||||||
(Share first call received on 49,600 shares @ ₹30 per share) |
|
|
|
Balance Sheet (Extract)
Particulars |
Note no. |
₹ |
I. Equity and Liabilities |
|
|
1. Shareholders’ Funds |
|
|
Share Capital |
|
52,38,000 |
II Assets |
|
|
1. Cash and cash equivalents |
|
52,38,000 |
Notes to Accounts:
Particulars |
₹ |
||
1. Share Capital |
|
||
Authorised Capital |
|
||
……shares of ₹… each |
|
||
Issued Capital |
|
||
50,000 shares of ₹100 each |
50,00,000 |
||
Subscribed Capital |
|
||
Subscribed and fully paid-up |
|
||
49,600 shares of ₹100 each |
49,60,000 |
||
Subscribed but not fully paid-up |
|
||
400 shares of ₹100 each |
40,000 |
|
|
Less: Calls-in-arrear |
12,000 |
28,000 |
|
Reserves and Surplus |
|
|
|
Securities Premium Reserve |
|
2,50,000 |
|
|
|
52,38,000 |
|
2. Cash and Cash Equivalents |
|
||
Cash at bank |
52,38,000 |
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
|||
Share application a/c |
Dr. |
|
1,80,000 |
|
||
To share capital a/c (50,000 x ₹3) |
|
|
1,50,000 |
|||
To share allotment a/c |
|
|
30,000 |
|||
(Application money transferred to share capital account and excess money on share allotment ) |
|
|
|
|||
Share allotment a/c |
Dr. |
|
2,50,000 |
|
||
To share capital a/c |
|
|
1,00,000 |
|||
To securities premium a/c |
|
|
1,50,000 |
|||
(Share allotment money due on 50,000 shares @ ₹5 per share including premium of ₹3 per share) |
|
|
|
|||
Share first and final call a/c |
Dr. |
|
1,50,000 |
|
||
To share capital a/c |
|
|
1,50,000 |
|||
(Share first call due on 50,000 shares @ ₹3 per share) |
|
|
|
Cash Book (Bank column only)
Particulars |
₹ |
Particulars |
₹ |
To share |
|
By balance c/d |
5,49,700 |
application a/c |
1,80,000 |
|
|
To share |
|
|
|
allotment a/c |
2,20,000 |
|
|
To share first call |
1,49,700 |
|
|
|
5,49,700 |
|
5,49,700 |
Balance Sheet (Extract)
Particulars |
Note no. |
₹ |
I. Equity and Liabilities |
|
|
1. Shareholders’ Funds |
|
|
Share Capital |
|
3,99,700 |
Reserves and Surplus |
|
1,50,000 |
II Assets |
|
|
1. Cash and cash equivalents |
|
5,49,700 |
Notes to Accounts:
Particulars |
₹ |
|
1. Share Capital |
|
|
Authorised Capital |
|
|
1,00,000 shares of ₹10 each |
|
|
Issued Capital |
|
|
50,000 shares of ₹10 each |
|
|
Subscribed Capital |
|
|
Subscribed but not fully paid-up |
|
|
50,000 shares of ₹8 each |
4,00,000 |
|
Less: calls in arrears |
300 |
3,99,700 |
2. Reserves and Surplus |
|
|
Securities premium reserve |
1,50,000 |
|
3. Cash and Cash Equivalents |
|
|
Cash at bank |
5,49,700 |
Amount transferred to share allotment on application
Category B excess shares 7000 x ₹3 = ₹21,000
Category C excess shares 3000 x ₹3 = ₹9,000
Amount received on allotment
Category A (40,000 x ₹5) = ₹2,00,000
Category B (8,000 x ₹5) = 40,000 – 21,000 (advance) = ₹19,000
Category C (2,000 x ₹5) = 10,000 – 9,000 (advance) = ₹11,000
Equity Shares | Preference Shares | |
Application | ₹3 per share | ₹3 per share |
Allotment | ₹5 per share (Including premium) | ₹4 per share |
First call | ₹4 per share | ₹3 per share |
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
|||
Equity share appl. a/c |
Dr. |
|
3,00,000 |
|
||
10% Pref. sh. Appli. a/c |
Dr. |
|
6,00,000 |
|
||
To equity share capital a/c |
|
|
3,00,000 |
|||
To 10% Pref. sh. capital a/c |
|
|
6,00,000 |
|||
(Application money transferred to share capital account for both pref. and equity shares) |
|
|
|
|||
Equity share allot. a/c |
Dr. |
|
5,00,000 |
|
||
10% Pref. sh. allot. a/c |
Dr. |
|
8,00,000 |
|
||
To equity share capital a/c |
|
|
3,00,000 |
|||
To securities premium a/c |
|
|
2,00,000 |
|||
To 10% Pref. sh. capital a/c |
|
|
8,00,000 |
|||
(Share allotment money due for both equity and preference shares) |
|
|
|
|||
Equity share F & F call a/c |
Dr. |
|
4,00,000 |
|
||
10% Pref. sh. F&F call a/c |
Dr. |
|
6,00,000 |
|
||
To equity share capital a/c |
|
|
4,00,000 |
|||
To 10% Pref. sh. capital a/c |
|
|
6,00,000 |
|||
(Share first and final call money due for both equity and preference shares) |
|
|
|
Cash Book (Bank column only)
Particulars |
₹ |
Particulars |
₹ |
To Equity share |
|
By balance c/d |
32,00,000 |
application a/c |
3,00,000 |
|
|
To 10% Pref. share |
|
|
|
application a/c |
6,00,000 |
|
|
To equity share |
|
|
|
allotment a/c |
5,00,000 |
|
|
To 10% Pref. share |
|
|
|
allotment a/c |
8,00,000 |
|
|
To Equity share F & F |
|
|
|
call a/c |
4,00,000 |
|
|
To 10% Pref. sh. F&F |
|
|
|
call a/c |
6,00,000 |
|
|
|
32,00,000 |
|
32,00,000 |
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
|||||||
Bank a/c (24000 x ₹30) |
Dr. |
|
7,20,000 |
|
||||||
To share application a/c |
|
|
7,20,000 |
|||||||
(Application money received on 24,000 shares @ ₹30 per share) |
|
|
|
|||||||
Share application a/c |
Dr. |
|
7,20,000 |
|
||||||
To share capital a/c (20000x ₹30) |
|
|
6,00,000 |
|||||||
To Bank a/c (4000 x ₹30) |
|
|
1,20,000 |
|||||||
(Application money transferred to share capital and balance refunded) |
|
|
|
|||||||
Share allotment a/c |
Dr. |
|
8,00,000 |
|
||||||
To share capital a/c |
|
|
6,00,000 |
|||||||
To sec. premium a/c |
|
|
2,00,000 |
|||||||
(Share allotment money due on 20,000 shares @ ₹40 per share including premium) |
|
|
|
|||||||
Bank a/c |
Dr. |
|
8,00,000 |
|
||||||
To share allotment a/c |
|
|
8,00,000 |
|||||||
(Allotment money received) |
|
|
|
|||||||
Share first call |
Dr. |
|
4,00,000 |
|
||||||
To share capital a/c |
|
|
4,00,000 |
|||||||
(Share first call due on 20,000 shares @ ₹20 per share) |
|
|
|
|||||||
Bank a/c |
Dr. |
|
4,00,000 |
|
||||||
To share first call |
|
|
4,00,000 |
|||||||
(Share first call money received) |
|
|
|
|||||||
Share final call a/c |
Dr. |
|
4,00,000 |
|
||||||
To share capital a/c |
|
|
4,00,000 |
|||||||
(Share final call due on 20,000 shares @ ₹20 per share) |
|
|
|
|||||||
Bank a/c |
Dr. |
|
4,00,000 |
|
||||||
To share final call |
|
|
4,00,000 |
|||||||
(Share final call money received) |
|
|
|
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
|||
Share application a/c |
Dr. |
|
2,00,000 |
|
||
To share capital a/c |
|
|
2,00,000 |
|||
(Application money transferred to share capital account for 10,000 shares) |
|
|
|
|||
Share allotment a/c |
Dr. |
|
3,00,000 |
|
||
To share capital a/c |
|
|
3,00,000 |
|||
(Share allotment money due on 10,000 shares @ ₹30 per share) |
|
|
|
|||
Share first call |
Dr. |
|
2,50,000 |
|
||
To share capital a/c |
|
|
2,50,000 |
|||
(Share first call due on 10,000 shares @ ₹25 per share) |
|
|
|
Cash Book (Bank column only)
Particulars |
₹ |
Particulars |
₹ |
To share |
|
By balance c/d |
7,57,500 |
application a/c |
2,00,000 |
|
|
To share |
|
|
|
allotment a/c |
3,00,000 |
|
|
To share first call |
2,45,000 |
|
|
To calls in |
|
|
|
advance |
12,500 |
|
|
|
7,57,500 |
|
7,57,500 |
Working notes:
Amount due on first call 10,000 shares @ ₹25 each |
2,50,000 |
Less: Calls in arrear for 200 shares @ ₹25 each |
(5,000) |
Add: Calls in advance received on 500 shares @ ₹25 each |
12,500 |
Total amount received on first call |
2,57,500 |
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
|||
Share application a/c |
Dr. |
|
12,00,000 |
|
||
To share capital a/c |
|
|
8,00,000 |
|||
To share allotment a/c |
|
|
4,00,000 |
|||
(Application money transferred to share capital account and excess money on share allotment ) |
|
|
|
|||
Share allotment a/c |
Dr. |
|
6,00,000 |
|
||
To equity share capital a/c |
|
|
6,00,000 |
|||
(Share allotment money due on 20,000 shares @ ₹30 per share) |
|
|
|
|||
Share first and final call |
Dr. |
|
6,00,000 |
|
||
To share capital a/c |
|
|
6,00,000 |
|||
(Share first and final call due on 20,000 shares @ ₹30 per share) |
|
|
|
|||
Cash Book (Bank column only)
Particulars |
₹ |
Particulars |
₹ |
To share |
|
By share |
|
application a/c |
12,80,000 |
application a/c |
80,000 |
To share |
|
By balance c/d |
20,00,000 |
allotment a/c |
2,00,000 |
|
|
To share first and |
|
|
|
final call |
6,00,000 |
|
|
|
|
|
|
|
20,80,000 |
|
20,80,000 |
Working notes:
Amount due on Allotment for 20,000 shares @ ₹30 per share |
6,00,000 |
Money adjusted on application 10,000 shares @ ₹40 each |
4,00,000 |
Money to be received on Allotment |
2,00,000 |
Journal Entries
Particulars |
|
Dr. ₹ |
Cr. ₹ |
|||
Share application a/c |
Dr. |
|
90,000 |
|
||
To share capital a/c |
|
|
90,000 |
|||
(Application money transferred to share capital account on 30,000 shares @ ₹3 per share) |
|
|
|
|||
Share allotment a/c |
Dr. |
|
1,20,000 |
|
||
To equity share capital a/c |
|
|
1,20,000 |
|||
(Share allotment money due on 30,000 shares @ ₹4 per share) |
|
|
|
|||
Share first and final call |
Dr. |
|
90,000 |
|
||
To share capital a/c |
|
|
90,000 |
|||
(Share first and final call due on 30,000 shares @ ₹3 per share) |
|
|
|
Cash Book (Bank column only)
Particulars |
₹ |
Particulars |
₹ |
To share |
|
By balance c/d |
3,00,000 |
application a/c |
90,000 |
|
|
To share |
|
|
|
allotment a/c |
1,20,000 |
|
|
To share first and |
|
|
|
final call |
90,000 |
|
|
|
3,00,000 |
|
3,00,000 |
Some shareholder may fail to pay one or more installments i.e. allotment money and/or call money. In such circumstances, the company can forfeit their shares i.e. the cancel the allotment and treat the amount already received thereon as forfeited to the company within the framework of the provisions in its articles. The following journal entries are passed on forfeiture of shares:
When issued at par:
Journal Entry
Particulars |
L.F. |
Dr. ₹ |
Cr. ₹ |
|
Share capital a/c |
Dr. |
|
Amount called up on forfeited shares |
|
To calls in arrears a/c |
|
Amount not received on forfeited shares |
||
To share forfeiture a/c |
|
Amount received on forfeited shares |
||
(……shares forfeited for non-payment of first and final call money) |
|
|
||
When issued at premium and premium money is already paid on forfeited shares then we will ignore the securities premium and the following entry will be passed.
Journal Entry
Particulars |
|
Dr. ₹ |
Cr. ₹ |
|
Share capital a/c |
Dr. |
|
Amount called up on forfeited shares |
|
To calls in arrears a/c |
|
Amount not received on forfeited shares |
||
To share forfeiture a/c |
|
Amount received on forfeited shares |
||
(……shares forfeited for non-payment of first and final call money) |
|
|
||
When issued at premium and premium money is not paid on forfeited shares then the following journal entry will be passed:
Journal Entry
Particulars |
L.F. |
Dr. ₹ |
Cr. ₹ |
|
Share capital a/c |
Dr. |
|
Amount called up on forfeited shares |
|
Securities Premium a/c |
Dr. |
|
Amount of securities premium not paid on forfeited shares |
|
To calls in arrears a/c |
|
Amount not received on forfeited shares |
||
To share forfeiture a/c |
|
Amount received on forfeited shares |
||
(……shares forfeited for non-payment of first and final call money) |
|
|
‘Over Subscription’ is a case when applications for more shares are received than the number offered to the public for subscription. In such condition, three alternatives are available to the directors to deal with the situation:
1) They can accept some applications in full and totally reject the others. The following entries are passed:
Journal Entries
Particulars |
|
Dr. ₹ | Cr. ₹ | ||
Bank a/c |
Dr. |
|
|
|
|
To share application a/c |
|
|
|
||
(Application money received on ….. shares @ ₹ … per share) |
|
|
|
||
Share application a/c |
Dr. |
|
|
|
|
To share capital a/c |
|
|
|
||
To Bank a/c |
|
|
|
||
(Application money transferred to share capital and money for excess application refunded) |
|
|
|
||
2) They can make a pro rata allotment to all. The following entries are passed:
Journal Entries
Particulars |
|
Dr. ₹ | Cr. ₹ | ||
Bank A/c |
Dr. |
|
|
|
|
To share application a/c |
|
|
|
||
(Application money received on ….. shares @ ₹ … per share) |
|
|
|
||
Share application a/c |
Dr. |
|
|
|
|
To share capital a/c |
|
|
|
||
To share allotment A/c |
|
|
|
||
(Application money transferred to share capital and excess application money transferred to allotment account) |
|
|
|
||
3) They can adopt a combination of the above two alternatives. The following entries are passed:
Journal Entries
Particulars |
|
Dr. ₹ | Cr. ₹ | ||
Bank a/c |
Dr. |
|
|
|
|
To share application a/c |
|
|
|
||
(Application money received on ….. shares @ ₹ … per share) |
|
|
|
||
Share application a/c |
Dr. |
|
|
|
|
To share capital a/c |
|
|
|
||
To share allotment a/c |
|
|
|
||
To Bank a/c |
|
|
|
||
(Application money transferred to share capital, excess application money transferred to allotment account and amount refunded for rejected applications) |
|
|
|
||
Under subscription is a situation where number of shares applied is less than the number for which application has been invited for subscription. For example a company offered 1, 00,000 shares for subscription to the public but the applications were received for 96,000 shares only. In such a situation, the allotment will be confirmed to 96,000 shares and entries shall be made accordingly. The following entries are passed:
Journal Entries
Particulars |
|
Dr. ₹ | Cr. ₹ | ||
Bank a/c |
Dr. |
|
|
|
|
To share application a/c |
|
|
|
||
(Application money received on ….. shares @ ₹ … per share) |
|
|
|
||
Share application a/c |
Dr. |
|
|
|
|
To share capital a/c |
|
|
|
||
(Application money transferred to share capital) |
|
|
|
Math is a subject that analyses the critical and analytical thinking of a student and tests numerical questions. So, the best way to prepare for Math is by studying the NCERT solutions. Make a timetable, jot down the important formulas, and theorems, make time for revision and give as much time as you can give to practicing questions. Solve a maximum number of questions and time your efforts. Extramarks - The Learning App has several sample papers along with NCERT 12 solutions that can be used for practicing for class 12 Math exam.
Class 12 exams seem like a major feat, but they are actually quite simple and really just a milestone that every student cross in his/her academic life. There is nothing to fear as you can easily prepare for the exams with the help of NCERT solutions for class 12 that are given on the Extramarks website or Extramarks – The Learning App
The CBSE guide for class 12 study material NCERT contains all syllabus prescribed to students of class 12. Look for NCERT solutions on the Extramarks website in the footer section and you will find all solutions there.
Yes, Extramarks provides all NCERT class 12 solutions for all subjects for class 12. Extramarks - The Learning App also has solved and unsolved sample papers that you can use to practice for your exams. You can also find the previous year`s solved board question paper on the app.
To score good marks in class 12 CBSE board exams, you must follow these tips:
1. Make a timetable to study well. Organize and prioritize the topics you want to study and haven`t yet had the time to open. Start studying with the most crucial topics.
2. Follow your timetable religiously. Save time for relaxing activities like meditation, swimming or sleeping.
3. Make brief notes containing important answers, character sketches, theorems, formulae, etc. Make clear notes so you can study them before the exam.
4. Learn from class 12 NCERT solutions given on Extramarks website.
5. Be confident that you can crack these exams and take time off to relax.
6. Revise thoroughly before the exam.
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