Sunday, December 24, 2017

Mahalaxmi Industries Ltd Issue of Shares Problem with Solution & HSC Accounts Papers

Mahalaxmi Industries Ltd. Accounting Solution

Mahalaxmi Industries Ltd. Problem (Issue of Shares)

Mahalaxmi Industries Ltd. Kundur issued 15000 equity shares of Rs. 100 each. They were payable as follows:

On Application Rs. 20
On Allotment Rs. 30
On First Call Rs. 25
On Second Call Rs. 25

The company received application for 12000 shares. All the applications were accepted and shares were alloted. The company made both the calls. One Shareholder holding 400 shares failed to pay the final call. His shares were forefeited.

Pass journal entries in the books of Mahalaxmi Industries Ltd. Kundur. [10]

Study Tip: Before viewing the solution below, attempt to draft the journal entries yourself. Note that this is a case of under-subscription (Applications received for 12,000 shares vs Issued 15,000). All entries should be based on 12,000 shares.

Solution: Journal of M/s Mahalaxmi Industries Ltd. Kundur.

Date Particulars L.F. Debit
(Rs.)		 Credit
(Rs.)
1. Bank A/c ... Dr.
To Equity Share Application A/c [Being share application money received] 		240000
240000
2. Equity share Application A/c .... Dr.
To Equity share Capital A/c [Being share application money transferred to share capital A/c ] 		240000
240000
3. Equity share Allotment A/c ... Dr.
To Equity Share Capital A/c [Being share allotment money due] 		360000
360000
4. Bank A/c ... Dr.
To Equity Share Allotment A/c [Being share allotment money received] 		360000
360000
5. Equity Share First Call A/c ... Dr.
To Equity Share Capital A/c [Being share first call money due] 		300000
300000
6. Bank A/c ... Dr.
To Equity Share First Call A/c [Being first call money received] 		300000
300000
7. Equity Share Final Call A/c ... Dr.
To Equity Share capital A/c [Being share final call money due] 		300000
300000
8. Bank A/c ... Dr.
To Equity Share Final Call A/c [Being final call money received on 11600 shares] 		290000
290000
9. Equity share Capital A/c ... Dr.
To Equity Share Final Call A/c
To Equity Share Forefeited A/c [Being 400 share forefeited on account of non - payment of final call]. 		40000
10000
30000

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