A Limited is a company with an authorised share capital of 2,50,00,000 in equity shares of 10 each, of which - 15,00,000 shares had been issued and…

CA Foundation · Accounting · RTP · September 2025
A Limited is a company with an authorised share capital of 2,50,00,000 in equity shares of 10 each, of which - 15,00,000 shares had been issued and fully paid up on 31st March, 2025. The company proposes to make a further issue of 337,500 of these 10 shares at a price of 14 each, the arrangement of payment being: (i) 2 per share payable on application, to be received by 31st May, 2025; (ii) Allotment to be made on 10th June, 2025 and a further 5 per share (including the premium to be payable); (iii) The final call for the balance to be made, and the money received by 31st December, 2025. Applications were received for 14,00,000 shares and dealt with as follows: (1) Applicants for 25,000 shares received allotment in full; (2) Applicants for 125,000 shares received allotment of 1 share for every2applied for; no money was returned to these applicants, the surplus on application being used to reduce the amount due on allotment; (3) Applicants for 12,50,000 shares received an allotment of 1 share for every 5 shares applied for; the money due on allotment was retained by the company, the excess being returned to the applicants; and (4) The money due on final call was received on the due date. You are required to record these transactions (including bank transactions) in the Journal Book of A Limited.

Suggested Answer and Working Notes:

Journal of A Limited Date Particulars Dr. ₹ Cr. ₹ 2025 May, 31 Bank A/c (Note 1 – Column - 3) Dr. 28,00,000 To Equity Share Application A/c (Being application money received on 14,00,000 shares @2 per share) 28,00,000 June, 10 Equity Share Application A/c Dr. 28,00,000 To Equity Share Capital A/c 6,75,000 To Equity Share Allotment A/c (Note 1 - Column - 5) 13,75,000 To Bank A/c (Note 1–Column - 6) (Being application money on 3,37,500 shares transferred to Equity Share Capital Account; on 687,500 shares adjusted with allotment and on 375,000 shares refunded as per Board’s Resolution No…..dated…) 7,50,000 Equity Share Allotment A/c Dr. 16,87,500 To Equity Share Capital A/c 3,37,500 To Securities Premium a/c (Being allotment money due on 3,37,500 shares @5 each including premium at 4 each as per Board’s Resolution No….dated…) 13,50,000 Bank A/c (Note 1 – Column - 8) Dr. 3,12,500 To Equity Share Allotment A/c (Being balance allotment money received) 3,12,500 Dec.31 Equity Share Final Call A/c Dr. 23,62,500 To Equity Share Capital A/c (Being final call money due on 3,37,500 shares @7 per share as per Board’s Resolution No…..dated….) 23,62,500 Bank A/c Dr. 23,62,500 To Equity Share Final Call A/c (Being final call money on 3,37,500 shares @7 each received) 23,62,500 Working Note: Calculation for Adjustment and Refund Category No. of Shares Applied for No. of Shares Allotted Amount Received on Application Amount Required on Application Amount adjusted on Allotment Refund [₹ 3 – (₹ 4 +5)] Amount due on Allotment Amount received on Allotment (1) (2) (3) (4) (5) (6) (7) (8) (i) 25,000 25,000 50,000 50,000 Nil Nil 1,25,000 1,25,000 (ii) 1,25,000 62,500 2,50,000 1,25,000 1,25,000 Nil 3,12,500 1,87,500 (iii) 12,50,000 2,50,000 25,00,000 5,00,000 12,50,000 7,50,000 12,50,000 Nil TOTAL 14,00,000 3,37,500 28,00,000 6,75,000 13,75,000 7,50,000 16,87,500 3,12,500 Also, (i) Amount Received on Application (3) = No. of shares applied for (1) X 2 (ii) Amount Required on Application (4) = No. of shares allotted (2) X 2

Topics: Issue, Forfeiture and Re-issue of Shares

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