ABC Limited has issued - 1,20,000 Equity shares of 10 each at premium of 2 per share for public subscription payable as follows: On application 2…

In the Books of ABC Ltd. Cash Book (Bank column only) Date Particulars ₹ Date Particulars ₹ To Equity Share Application A/c (Being application money received on 1,80,00 shares @2 each) 3,60,000 By Equity Share Application A/c (Being excess money refunded on 36,000 shares @20 each as per Board’s Resolution No…dated….) 72,000 To Equity Share Allotment A/c (Being allotment money received on 1,15,200 shares @50 each) 5,29,920 By Balance c/d 14,26,320 To Equity Share first Call A/c (Being First Call money received on 1,09,200 shares @3 each) 2,18,400 To Equity Share Second and Final Call A/c (Being First Call money received on 1,09,200 shares @3 each) 3,27,600 To Equity Share Capital A/c (Being forfeited shares issued at 8 per share) 62,400 14,98,320 14,98,320 Journal Entries Date Particulars Amount (₹) Amount (₹) i) Equity Share Application A/c Dr. 2,40,000 To Equity Share Capital A/c (Being application money on 1,20,000 shares @2 each transferred to Equity Share Capital Account) 2,40,000 ii) Equity Share Allotment A/c Dr. 6,00,000 To Equity Share Capital A/c 3,60,000 To Securities Premium A/c (Being allotment money - 1,20,000 shares @5 per share including premium of 2per share being made due) 2,40,000 iii) Equity Share Application A/c Dr. 48,000 Calls in arrear A/c Dr. 22,080 To Equity Share Allotment A/c (Surplus of application money adjusted and amount due to ‘T’ on 4,800 shares transferred to call in arrear A/c) 70,080 iv) Equity Share First Call A/c Dr. 2,40,000 To Equity Share Capital A/c (Being first call money received for1,20,000 shares 2per share being made as per Board’s resolution No…. dated ……) 2,40,000 v) Calls in arrear A/c (₹ 10,800 x 2) Dr. 21,600 To Equity share First call A/c (First call money due on 10,800 shares transferred to call in arrear a/c) 21,600 vi) Equity Share Capital A/c (4800x 7) Dr. 33,600 Securities Premium A/c (4800x 2) Dr. 9,600 To Call in arrear A/c 31,680 To Share forfeiture A/c (₹ 4,800 shares forfeited for non-payment of allotment and call money) 11,520 vii) Equity Share Final Call A/c Dr. 3,45,600 To Equity Share Capital A/c (Being final call money received on 1,15,200 shares for 3per share being made as per Board’s resolution No…. dated ……) 3,45,600 viii) Calls in arrear A/c Dr. 18,000 To Equity share final call A/c (Final call money due on 6,000 shares transferred to call in arrear a/c) 18,000 ix) Equity Share Capital A/c (6000x 10) Dr. 60,000 To Call in arrear A/c 30,000 To Share forfeiture A/c (₹ 6,000 shares forfeited for non-payment of first call and final call money) 30,000 x) Forfeited Shares A/c (₹ 7,800X 2) Dr. 15,600 To Equity Share Capital A/c (Being loss on re-issue of7,800 shares @2 each as per Board’s Resolution No……dated…...) 15,600 xi) Forfeited Shares A/c (Note no - 4) Dr. 10,920 To Capital Reserve A/c (Being profit on re-issue transferred to Capital Reserve) 10,920 Alternately, journal entries can also be passed without using the Calls in Arrears Account. Working Notes: 1. Calculation of Money paid by T on application 4,800 shares was allotted, hence applied shares = 4,800* 1,44,000/1,20,000 = 5,760 Hence application money paid by T = 5,760 X 2 = 11,520 2. Amount due/Payable on Allotment by T Allotment money Due (₹ 4,800* 5)₹ 24,000 Excess money received on application (₹ 11,520 – (₹ 4,800* 2))₹ 1,920 Money not received from T - 22,080 3. Money actually received on Allotment Money receivable on Allotment - 6,00,000 Excess application money - 48,000 5,52,000 Money not paid by T (22, 080) 5,29,920 4. Calculation of Capital Reserve Forfeited amount on 4,800 T’s shares - 11,520 Forfeited amount on 3,000 N’s shares (₹ 30,000 x 3000/6000)₹ 15,000 26,520 Less: Loss on re-issue of7,800 Shares - 15,600 10,920