Question

Sucheta Company Limited issued ₹ 20,00,000 new capital divided into ₹ 100 equity shares at a premium of ₹ 20 per share payable as ₹ 10 on Application, ₹ 40 on Allotment and ₹ 10 premium ₹ 50 on Final call and ₹ 10 premium. The issue was oversubscribed to the extent of 26,000 equity shares. The applicants on 2,000 shares were sent a letter of regret and their application money was refunded. The remaining applicants were allotted shares on a Pro-rata basis. All the money due on Allotment and Final call was only received. Make necessary Journal Entries in the books of Sucheta Company Ltd.

Answer 1

Journal Entries in the books of Sucheta Company Limited

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

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: