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Khandelwal Co. Ltd. made an issue of 40,000 equity shares of Rs. 20 each, payable as follows:

Problem Statement

Khandelwal Co. Ltd. made an issue of 40,000 Equity Shares of Rs. 20 each, payable as follows:

  • Application: Rs. 5 per share
  • Allotment: Rs. 10 per share
  • First Call: Rs. 3 per share
  • Second and Final Call: Rs. 2 per share

The company received applications for 45,000 shares of which applications for 5,000 shares were rejected and the money refunded. All the shareholders paid upto second call except Sachin, the allotee of 2,000 shares, failed to pay Final Call.

Pass Journal Entries for the above transactions in the books of Khandelwal Co. Ltd.

Solution: Journal Entries

In the books of Khandelwal Co. Ltd.

Journal Entries

Date Particulars L.F. Debit (Rs.) Credit (Rs.)
1. Bank A/c ...Dr.
    To Equity Share Application A/c (Being application money received on 45,000 shares @ Rs. 5 per share) 		2,25,000
2,25,000
2. Equity Share Application A/c ...Dr.
    To Equity Share Capital A/c
    To Bank A/c (Being application money on 40,000 shares transferred to share capital and excess money on 5,000 shares refunded) 		2,25,000
2,00,000
25,000
3. Equity Share Allotment A/c ...Dr.
    To Equity Share Capital A/c (Being allotment money on 40,000 shares @ Rs. 10 per share due) 		4,00,000
4,00,000
4. Bank A/c ...Dr.
    To Equity Share Allotment A/c (Being allotment money received) 		4,00,000
4,00,000
5. Equity Share First Call A/c ...Dr.
    To Equity Share Capital A/c (Being first call money on 40,000 shares @ Rs. 3 per share due) 		1,20,000
1,20,000
6. Bank A/c ...Dr.
    To Equity Share First Call A/c (Being first call money received) 		1,20,000
1,20,000
7. Equity Share Second & Final Call A/c ...Dr.
    To Equity Share Capital A/c (Being second & final call money on 40,000 shares @ Rs. 2 per share due) 		80,000
80,000
8. Bank A/c ...Dr.
Calls in Arrears A/c ...Dr.
    To Equity Share Second & Final Call A/c (Being final call money received on 38,000 shares, Sachin failed to pay on 2,000 shares) 		76,000
4,000
80,000
Working Note for Final Call:
Total Due: 40,000 shares × Rs. 2 = Rs. 80,000
Less: Calls in Arrears (Sachin): 2,000 shares × Rs. 2 = Rs. 4,000
Amount Received by Bank: Rs. 76,000

Previous Year Board Papers & Solutions

HSC Board Exam Papers Solution March 2014: Khandelwal Co. Ltd. made an issue of 40,000 equity shares of Rs. 20 each, payable as follows:
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Issue of Equity Shares Solution | March 2018 HSC Board

Issue of Equity Shares Solution: March 2018 HSC Board

Q. 5. Issue of Equity Shares

March 2018 HSC Board Paper Solution

Refer to the question paper images below.

HSC Accounts March 2018 Question Paper - Page 8 (Q5 Dissolution/Issue of Shares) HSC Accounts March 2018 Question Paper - Page 9 (Q6 NPO)

Journal of Aniket Ltd.

In the books of the Company
Swipe table left/right to view amounts →
Date Particulars L.F. Debit (Rs.) Credit (Rs.)
(1)
Bank A/cDr.
To Equity Share Application A/c
[Being application money received on 50,000 shares @ Rs. 20]
 10,00,000
10,00,000
(2)
Equity Share Application A/cDr.
To Equity Share Capital A/c
To Equity Share Allotment A/c
[Being share application money transferred to share capital A/c and excess amount adjusted to allotment money]
 10,00,000
8,00,000
2,00,000
(3)
Equity Share Allotment A/cDr.
To Equity Share Capital A/c
[Being Share allotment money due on 40,000 shares @ Rs. 30]
 12,00,000
12,00,000
(4)
Bank A/cDr.
To Equity Share Allotment A/c
[Being share allotment money received]
 10,00,000
10,00,000
(5)
Equity Share First Call A/cDr.
To Equity Share Capital A/c
[Being share first call amount due on 40,000 shares @ Rs. 30]
 12,00,000
12,00,000
(6)
Bank A/cDr.
To Equity Share First Call A/c
[Being share first call amount received on 39,000 shares]
 11,70,000
11,70,000
(7)
Equity Share Second Call A/cDr.
To Equity Share Capital A/c
[Being share second call amount due on 40,000 shares @ Rs. 20]
 8,00,000
8,00,000
(8)
Bank A/cDr.
To Equity Share Second Call A/c
[Being share second call amount received on 39,000 shares]
 7,80,000
7,80,000
(9)
Equity Share Capital A/cDr.
To Equity Share First Call A/c
To Equity Share Second Call A/c
To Equity Share Forfeiture A/c
[Being 1,000 shares forfeited on account of non-payment of first and second call]
 1,00,000
30,000
20,000
50,000
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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

HSC Board Accounts Question Papers & Solutions

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