(a) Progress Ltd., issued 30,000 ordinary shares of ₹ 10 each, payable ₹ 2 on application, ₹ 4 on allotment, ₹ 2 on first call and ₹ 2 on second and final call. All the shares are subscribed and amount was duly received. Pass journal entries.

OR

(b) Following is the Balance She

Question

(a) Progress Ltd., issued 30,000 ordinary shares of ₹ 10 each, payable ₹ 2 on application, ₹ 4 on allotment, ₹ 2 on first call and ₹ 2 on second and final call. All the shares are subscribed and amount was duly received. Pass journal entries.

OR

(b) Following is the Balance Sheet of Magesh Ltd., as on 31st March 2019.

| Particulars | ₹ |
| --- | --- |
| I. EQUITY AND LIABILITIES | |
| 1. Shareholder's fund | |
| Equity share capital | 20,00,000 |
| 2. Non-current liabilities | |
| Long term borrowings | 5,00,000 |
| 3. Current liabilities | |
| (a) Short-term borrowings | 1,70,000 |
| (b) Trade payable | 2,50,000 |
| (c) Other current liabilities Expenses payable | 30,000 |
| (d) Short-term Provisions | 50,000 |
| Total | 30,00,000 |
| II. ASSETS | |
| 1. Non-current assets Fixed assets (a) Tangible assets | 15,00,000 |
| 2. Current assets | |
| (a) Inventories | 4,50,000 |
| (b) Trade receivable | 7,00,000 |
| (c) Cash and Cash equivalents | 3,00,000 |
| (d) Other current assets Prepaid expenses | 50,000 |
| Total | 30,00,000 |

Calculate :
(i) Current ratio
(ii) Quick ratio

Accepted Answer

>

> [!TLDR]
> (a) Record each instalment of the 30,000-share issue in two entries — amount due, then amount received — all to Equity Share Capital (total ₹3,00,000). (b) Current ratio = 15,00,000 : 5,00,000 = 3:1; Quick ratio = 10,00,000 : 5,00,000 = 2:1.
>
> ## (a) Progress Ltd. — journal entries for issue of 30,000 shares of ₹10 each at par
>
> Amounts: Application 30,000 × ₹2 = 60,000; Allotment 30,000 × ₹4 = 1,20,000; First call 30,000 × ₹2 = 60,000; Second & final call 30,000 × ₹2 = 60,000.
>
> | Particulars | L.F. | Dr (₹) | Cr (₹) |
> | --- | --- | --- | --- |
> | Bank A/c Dr | | 60,000 | |
> |  To Equity Share Application A/c | | | 60,000 |
> | (Application money on 30,000 shares @ ₹2 received) | | | |
> | Equity Share Application A/c Dr | | 60,000 | |
> |  To Equity Share Capital A/c | | | 60,000 |
> | (Application money transferred to share capital) | | | |
> | Equity Share Allotment A/c Dr | | 1,20,000 | |
> |  To Equity Share Capital A/c | | | 1,20,000 |
> | (Allotment money @ ₹4 due) | | | |
> | Bank A/c Dr | | 1,20,000 | |
> |  To Equity Share Allotment A/c | | | 1,20,000 |
> | (Allotment money received) | | | |
> | Equity Share First Call A/c Dr | | 60,000 | |
> |  To Equity Share Capital A/c | | | 60,000 |
> | (First call @ ₹2 due) | | | |
> | Bank A/c Dr | | 60,000 | |
> |  To Equity Share First Call A/c | | | 60,000 |
> | (First call money received) | | | |
> | Equity Share Second & Final Call A/c Dr | | 60,000 | |
> |  To Equity Share Capital A/c | | | 60,000 |
> | (Second & final call @ ₹2 due) | | | |
> | Bank A/c Dr | | 60,000 | |
> |  To Equity Share Second & Final Call A/c | | | 60,000 |
> | (Second & final call money received) | | | |
>
> Total share capital raised = 60,000 + 1,20,000 + 60,000 + 60,000 = **₹3,00,000** (30,000 shares × ₹10).
>
> ## (b) Magesh Ltd. — Current ratio and Quick ratio
> …

Particulars	₹
I. EQUITY AND LIABILITIES
1. Shareholder's fund
Equity share capital	20,00,000
2. Non-current liabilities
Long term borrowings	5,00,000
3. Current liabilities
(a) Short-term borrowings	1,70,000
(b) Trade payable	2,50,000
(c) Other current liabilities Expenses payable	30,000
(d) Short-term Provisions	50,000
Total	30,00,000
II. ASSETS
1. Non-current assets Fixed assets (a) Tangible assets	15,00,000
2. Current assets
(a) Inventories	4,50,000
(b) Trade receivable	7,00,000
(c) Cash and Cash equivalents	3,00,000
(d) Other current assets Prepaid expenses	50,000
Total	30,00,000

Particulars	Dr (₹)	Cr (₹)
Bank A/c Dr	60,000
To Equity Share Application A/c		60,000
(Application money on 30,000 shares @ ₹2 received)
Equity Share Application A/c Dr	60,000
To Equity Share Capital A/c		60,000
(Application money transferred to share capital)
Equity Share Allotment A/c Dr	1,20,000
To Equity Share Capital A/c		1,20,000
(Allotment money @ ₹4 due)
Bank A/c Dr	1,20,000
To Equity Share Allotment A/c		1,20,000
(Allotment money received)
Equity Share First Call A/c Dr	60,000
To Equity Share Capital A/c		60,000
(First call @ ₹2 due)
Bank A/c Dr	60,000
To Equity Share First Call A/c		60,000
(First call money received)
Equity Share Second & Final Call A/c Dr	60,000
To Equity Share Capital A/c		60,000
(Second & final call @ ₹2 due)
Bank A/c Dr	60,000
To Equity Share Second & Final Call A/c		60,000
(Second & final call money received)

(a) Progress Ltd. — journal entries for issue of 30,000 shares of ₹10 each at par

(b) Magesh Ltd. — Current ratio and Quick ratio

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