Question

Printkit Limited invited applications for issue of 80,000 equity shares of \rupee10 each. The amount was payable as follows: On Application: \rupee3 per share On Allotment: \rupee2 per share On First and Final Call: Balance Applications for 1,50,000 shares were received. Applications for 10,000 shares were rejected, and pro-rata allotment was made to the remaining applicants as follows: - Category A: Applicants for 80,000 shares were allotted 40,000 shares. - Category B: Applicants for 60,000 shares were allotted 40,000 shares. Excess money received on application was adjusted toward the amount due on allotment and first and final call. All the amounts due on allotment and first and final call were duly received. \vspace{0.5cm}

Hint:

In cases of pro-rata allotment, calculate excess money received from applications and adjust it toward subsequent payments (e.g., allotment and calls). Refund only the amount corresponding to rejected shares.

Answer 1

\[ \text{Journal Entries in the Books of Printkit Limited} \] \begin{center} \renewcommand{\arraystretch}{1.5} % Increases row height for better readability \setlength{\tabcolsep}{5pt} % Adjusts column spacing \begin{tabular}{|p{3cm}|p{6.5cm}|p{3cm}|} \hline Date & Particulars & Amount (\rupee)
\hline 2023 & Bank A/c Dr. & 4,50,000
& To Equity Share Application A/c & 4,50,000
& \multicolumn{2}{|l|}{\small (Being application money received on 1,50,000 shares at \rupee3 each)}
\hline 2023 & Equity Share Application A/c Dr. & 4,50,000
& To Equity Share Capital A/c & 2,40,000
& To Bank A/c (Refund) & 30,000
& To Equity Share Allotment A/c & 1,80,000
& \multicolumn{2}{|l|}{\small (Being application money adjusted to capital, refund for 10,000 shares)}
\hline 2023 & Equity Share Allotment A/c Dr. & 1,60,000
& To Equity Share Capital A/c & 1,60,000
& \multicolumn{2}{|l|}{\small (Being allotment money due on 80,000 shares at \rupee2 each)}
\hline 2023 & Bank A/c Dr. & 1,60,000
& To Equity Share Allotment A/c & 1,60,000
& \multicolumn{2}{|l|}{\small (Being allotment money received)}
\hline 2023 & Equity Share First and Final Call A/c Dr. & 2,40,000
& To Equity Share Capital A/c & 2,40,000
& \multicolumn{2}{|l|}{\small (Being first and final call money due on 80,000 shares at \rupee3 each)}
\hline 2023 & Bank A/c Dr. & 2,10,000
& To Equity Share First and Final Call A/c & 2,10,000
& \multicolumn{2}{|l|}{\small (Being first and final call money received, adjusted from excess application money)}
\hline \end{tabular} \end{center} \vspace{0.5cm} Explanation: 1. Application Money Received: Total money received is for 1,50,000 shares at \rupee3 each.
2. Refund for Rejected Applications: Application money for 10,000 shares is refunded.
3. Adjustment of Excess: Excess application money received for pro-rata allotment is adjusted toward the allotment and first and final call dues.
4. Allotment and First and Final Call: All amounts due are fully adjusted and received, either through direct payments or adjustments from excess application money.