# Practical Problem 05

#### SOLUTION:

Journal Entries in the books of Sucheta Company Limited

 Date Particulars L.F Debit Amount (₹) Credit Amount (₹) 1 Bank A/c Dr. 2,60,000 To Equity Share Application A/c 2,60,000 ( Being application money on 26,000 equity shares @ ₹ 10 per share received) 2 Equity Share Application A/c Dr. 20,000 To Bank A/c 20,000 ( Being application money on 2,000 equity shares @ ₹ 10 per share refunded) 3 Equity Share Application A/c Dr. 2,40,000 To Equity Share Capital A/c 2,00,000 To Equity Share Allotment A/c 40,000 ( Being application money on 20,000 equity shares transferred to equity share capital and application money on 2,000 equity shares adjusted against Share Allotment A/c) 4 Equity Share Allotment A/c Dr. 10,00,000 To Equity Share Capital A/c 8,00,000 To Share Premium A/c 2,00,000 ( Being allotment money (including premium) on 20,000 equity shares @ ₹ 50 per share due) 5 Bank A/c Dr. 9,60,000 To Equity Share Allotment A/c 9,60,000 ( Being allotment money on 20,000 equity shares, after adjusting excess application money received) 6 Equity Share Final Call A/c Dr. 12,00,000 To Equity Share Capital A/c 10,00,000 To Share Premium A/c 2,00,000 ( Being share final call money (including premium) on 20,000 equity shares @ ₹ 60 per share due) 7 Bank A/c Dr 12,00,000 To Equity Share Final Call A/c 12,00,000 ( Being share final call money on 20,000 equity shares @ ₹ 60 per share received) 4880000 4880000

Working Note :

Calculation of Application money transferred to Share Allotment :

 Application money received(26,000 × 10) : 2,60,000 Less: Application money refunded(2,000 × 10) : 20,000 2,40,000 Less: Application money transferred to Share Capital : (20,000 × 10) 2,00,000 Excess money received on application transferred to Share Allotment: 40,000

Bifurcation of calls amount :

 Per-share value ₹ 100Premium amount ₹ 20 On Application: ₹ 10 per share On Allotment: ₹ 40 per share for Capital + ₹ 10 per share for Premium On final call: ₹ 50 per share for Capital + ₹ 10 per share for Premium