Grey Limited issued - 2,00,000 equity shares of, 10 each payable as 3 per share on application & 5 per share (including 2 as premium) on…

In the books of Grey Ltd. Journal Entry no. Particulars Particulars ₹ 1 Bank A/c Dr. 6,00,000 To Equity Share Application A/c 6,00,000 (Being application money on 2,00,000 shares @3 per share received) 2 Equity Share Application A/c Dr. 6,00,000 To Equity Share Capital A/c 6,00,000 (Being transfer of application money to Equity Share Capital on 2,00,000 shares @3 per share as per Director’s Resolution no… dated…) 3 Equity Share Allotment A/c Dr. 10,00,000 To Equity Share Capital A/c 6,00,000 To Securities Premium A/c 4,00,000 (Being amount due from shareholders in respect of allotment on 2,00,000 shares @5 per share including premium 2per share as per Director’s Resolution no…dated……) 4 Bank A/c Dr. 9,75,000 To Equity Share Allotment A/c 9,75,000 (Being amount received against allotment on 1,95,000 shares @5 per share including premium @2 per share) OR Bank A/c Dr. 9,75,000 Calls in Arrears A/c Dr. 25,000 To Equity Share Allotment A/c 10,00,000 (Being amount received against allotment on 2,00,000 share @5 per share including premium @2 per share, Mr. Deepak holding - 5,000 shares failed to pay allotment money) 5 Equity Share Call A/c Dr. 8,00,000 To Equity Share Capital A/c 8,00,000 (Being amount due from shareholders in respect of call on 2,00,000 shares @4 per share as per Director’s resolution no…dated…) 6 Bank A/c Dr. 7,40,000 To Equity Share Call A/c 7,40,000 (Being amount received against the call on 1,85,000 shares @4 per share) OR Bank A/c Dr. 7,40,000 Calls in Arrears A/c Dr. 60,000 To Equity Share Call A/c 8,00,000 (Being amount received against the call on 1,85,000 shares @4 per share, Deepak holding - 5,000 shares and Kishore holding - 10,000 shares failed to pay call money) 7 Equity Share Capital A/c (₹ 15,000 x 10) Dr. 1,50,000 Securities Premium A/c (5000x 2) Dr. 10,000 To Equity Share Allotment A/c (5000x 5) 25,000 To Equity Share Call A/c (₹ 15,000 x 4) 60,000 To Forfeited Shares A/c 75,000 (Being forfeiture of15,000 equity shares for non- payment of allotment and call money on 5,000 shares and for non-payment of call money on 10,000 shares as per Board’s Resolution No…..dated ….) OR Equity Share Capital A/c (₹ 15,000 x 10) Dr. 1,50,000 Securities Premium A/c (5000x 2) Dr. 10,000 To Calls in Arrears A/c (₹ 25,000 +60,000) 85,000 To Forfeited Shares A/c 75,000 (Being forfeiture of15,000 equity shares for non- payment of allotment and call money on 5,000 shares and for non-payment of call money on 10,000 shares as per Board’s Resolution No…...dated…….) 8 Bank A/c Dr. 90,000 Forfeited Shares A/c Dr. 10,000 To Equity Share Capital A/c 1,00,000 (Being re- issue of10,000 shares @9 each as per Board’s Resolution No……dated……) 9 Forfeited Shares A/c Dr. 35,000 To Capital Reserve A/c 35,000 (Being profit on re- issue transferred to Capital Reserve) Balance Sheet of Grey as at…… Particulars Notes No. ₹ EQUITY AND LIABILITIES Shareholders’ funds Share Capital 1 19,80,000 Reserves and Surplus 2 4,25,000 Total 24,05,000 ASSETS Current assets Cash and Cash Equivalents 3 24,05,000 Total 24,05,000 Notes to accounts Particulars ₹ 1. Share Capital Equity share capital Issued share capital 2,00,000 Equity shares of 10each 20,00,000 Subscribed, called up and paid up share capital 1,95,000 Equity shares of 10each 19,50,000 Add : Forfeited shares (₹ 5,000x 6) 30,000 19,80,000 2. Reserves and Surplus Securities Premium 3,90,000 Capital Reserve 35,000 4,25,000 3. Cash and Cash Equivalents Amount received on Share Application 6,00,000 Amount Received on Share Allotment 9,75,000 Amount Received on Share Call 7,40,000 Amount Received on Re-issue of Shares 90,000 24,05,000 Working Note: (1) Calculation of Amount to be Transferred to Capital Reserve Amount forfeited per share of Deepak 3 Amount forfeited per share of Kishore 6 Less: Loss on re-issue per share (1) Less: Loss on re-issue per share (1) Surplus 2 Surplus 5 Transferred to Capital Reserve: Deepak’s share (₹ 5,000 x 2) 10,000 Kishore’s Share (₹ 5,000 x 5) 25,000 Total 35,000 (2) Balance of Security Premium Total Premium amount receivable on allotment = 4,00,000 Less: Amount reversed on forfeiture = (10, 000) Balance remaining = 3,90,000