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Do It Yourself · Q1
Q.

A company issued 20,000 equity shares of ₹10 each payable:

ParticularsAmount (₹)
On Application3
On Allotment3
On First Call2
On Second and Final Call2

The allotment money was payable on or before May 01, 2019; first call money on or before August 01, 2019; and the second and final call on or before October 01, 2019. 'X', to whom 1,000 shares were allotted, did not pay the allotment and call money; 'Y', an allottee of 600 shares, did not pay the two calls; and 'Z', to whom 400 shares were allotted, did not pay the final call. Pass journal entries and prepare the balance sheet of the company.

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Record each call as due to Share Capital, receive cash net of each defaulter's unpaid amount (routed to Calls in Arrears), and the balance sheet shows Share Capital ₹1,89,800 (₹2,00,000 called up − ₹10,200 arrears) against cash ₹1,89,800.

Working Notes — Calls in Arrears

  • Allotment (₹3): X unpaid 1,000 × ₹3 = ₹3,000.
  • First call (₹2): X 1,000 × ₹2 + Y 600 × ₹2 = ₹2,000 + ₹1,200 = ₹3,200.
  • Second & final call (₹2): X 1,000 × ₹2 + Y 600 × ₹2 + Z 400 × ₹2 = ₹2,000 + ₹1,200 + ₹800 = ₹4,000.
  • Total arrears = ₹3,000 + ₹3,200 + ₹4,000 = ₹10,200.

Solution — Journal

DateParticularsL.F.Debit (₹)Credit (₹)
Bank A/c Dr.60,000
To Share Application A/c60,000
Share Application A/c Dr.60,000
To Share Capital A/c60,000
Share Allotment A/c Dr.60,000
To Share Capital A/c60,000
Bank A/c Dr.57,000
Calls in Arrears A/c Dr.3,000
To Share Allotment A/c60,000
Share First Call A/c Dr.40,000
To Share Capital A/c40,000
Bank A/c Dr.36,800
Calls in Arrears A/c Dr.3,200
To Share First Call A/c40,000
Share Second and Final Call A/c Dr.40,000
To Share Capital A/c40,000
Bank A/c Dr.36,000
Calls in Arrears A/c Dr.4,000
To Share Second and Final Call A/c40,000

Balance Sheet of the Company (extract)

ParticularsNote No.Amount (₹)
I. EQUITY AND LIABILITIES — Shareholders' Funds — Share Capital11,89,800
II. ASSETS — Current Assets — Cash and Cash Equivalents21,89,800

Note 1 — Share Capital: 20,000 shares of ₹10 each called up ₹2,00,000; less Calls in Arrears ₹10,200 = ₹1,89,800. Note 2 — Cash: ₹60,000 + ₹57,000 + ₹36,800 + ₹36,000 = ₹1,89,800.

✓Final answer

Share Capital (subscribed and paid-up) = ₹1,89,800; Cash at bank = ₹1,89,800.

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