Accounting of Share Capital

1. Sagar Construction Ltd. Issued 100,000 shares of Rs. 10 each on 1st Shrawan, 2070.
The amount payable on these shares was as under:
Rs 2 per share on application.
Rs 3 per share on allotment
Rs 5 per share on call.
Make journal entries.

2. Global IME Bank Ltd. Issued 2,00,000 equity shares of Rs. 10 each. Terms of
payment being Rs. 2 on application, Rs. 5 on allotment, Rs. 3 on first call and Rs. 2 on
second and final call. Make journal entries and cash book.

3. A Limited Company issued 25,000 Ordinary Shares of Rs. 25 each payable Rs. 5 on
application, Rs. 10 on allotment and Rs. 5 each on subsequent calls, 20,000 shares
were fully- subscribed and moneys duly received. You are required to give journal
entries, Cash Book and Balance Sheet of the company.

4. Z Ltd. makes an issue of 40,000 Equity Shares of Rs.10 each payable as follows:

Rs. 2 on Application

Rs. 3 on allotment

Rs. 6 on First and Final Call

Applications were received for 52,000 shares. The Board of Directors made the
allotment in full to the Application demanding 20 or more shares and returned
money to the applicants for 12,000 shares.

One shareholder who was allotted 40 shares paid the first and final call money
along-with allotment money and an another shareholder who was allotted 60
shares did not pay allotment money but paid along-with first and final call money.
Journalize the transactions and prepare cash book.

5. Kwiks Company Ltd. Invited applications for 1,00,000 equity shares of Rs. 10 each
payable as under:

Rs. 5 Per share on application

Rs. 3 per share on allotment

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 Rs. 2 per share on first and final call

Applications were received for 2,00,000 equity shares and the board of directors
decides to make a pro-rata allotment of 50% of the shares applied for every
applicant; balance of application monies to apply for allotment and refund the
amount remaining thereafter.

6. A Company made an issue of 10,000 shares of Rs. 10 each, payable Rs. 3 on

application; Rs. 4 on allotment and balance on call. 43,825 shares were applied for,
including an application for 300 shares from a person who paid for the full face
value of the shares. Owing to oversubscription, allotments were scaled down as
follows:

Applicants for 11,825 shares (in respect of applications for 500 or less) received
5,750 shares (including the applicant for 300 shares who got 150 shares).

Applicants for 32,000 shares (in respect of applications for over 500 shares)
received 4,250 shares.

The amounts received were first applied towards allotment and call moneys, after
satisfying that amount due on application and any balance left was returned.

You are required to show the Cash Book and Ledger Accounts to record the above
transactions.

7. XYZ Co. Ltd. Issued 30,000 equity shares of Rs. 10 each. The amount on there shares
was payable as Rs. 2 on the application, Rs. 3 on allotment, Rs. 3 on first call and Rs.
2 on final call. All the amount were duly received but Krishna, who holds 1000
equity shares did not pay allotment first and final call amounts on these shares, and
Raja, who holds 500 shares did not pay first and final call amount. Pass the
necessary journal entries.

8. NMB Bank Limited issued 2,00,000 equity shares of Rs. 10 each at Rs. 12 per share.
Terms of payment being: Rs. 2 on application, Rs. 5 on allotment, including
premium, Rs. 3 on first call and Rs. 2 on second and final call. Make journal entries.

9. Ganga Jamuna Hydropwer ltd issued 20,000 equity shares of Rs. 10 each payable
Rs.5 on allotment including premium of Rs. 3 per share. There was enough number
of applications and all the shares were allotted. One shareholder who applied for
500 shares failed to pay the allotment money. Show the entries relating to allotment
only.

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 10. Hariram company limited issued 50,000 shares of Rs. 10 each, at a premium of Rs. 2.
These shares were payable as under:

On Application Rs 2 Per share

On Allotment Rs 3 Per share

On First Call Rs 7 per share (including premium)

The subscription received from the public for 2,10,000 shares and made a pro-rata
allotment to the applicants of 2,00,000 shares. BOD deciede to utilize balance
money towards allotment and first call. All monies due in respect of allotment and
first call were duly received.

Required: Journal entries for the above transactions.

11. Ram Ltd. Issued 20,000 equity shares of Rs. 10 each payable Rs. 3 on application, Rs.
3 on allotment, Rs. 2 on first call and Rs.2 on final call. The due date of installments
are

Application on 1 Ashwin 2075

Allotment on 1 Poush 2075

First call on 1 Falgun 2075

Final Call on 1 Jestha 2076

Interest should be received at 10% p.a. on call in arrears and interest should be paid
at 5% on call in advance (as per the Articles of the Company)

All the shares were duly allotted and the money so received on the dates with the
exception of the following:

- Mr. Hari hoding 2000 shares paid the entire amount due along with allotment.
- Mr. Shyam holding 3000 shares paid the entire amount due on first call with the
amount due on final call.

Show the Journal entries.

12. Mai Khola Hydropwer Company Ltd. Issued 2,00,000 equity shares of Rs. 10 each.
Terms of payment being Rs. 3 on application, Rs. 2 on allotment and Rs. 4 on first
and final call. The company received application for 2,80,000 shares. Pro-rata
allotment was made on the applications for 2,50,000 shares. Give Journal Entries
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 assuming that an applicant who was allotted 100 shares did not pay allotment and
first and final call.

13. A company Ltd.issued 25,000 equity shares of Rs. 10 each, at a discount of 10%
payable as follows:

On Application Rs. 2 per share

On Application Rs. 3 Per share

On First Call Rs. 2 Per share

On Final call Rs. 2 Per share

Applications were received for 37,500 shares and directors made pro-rata allotment
to the applicants for 30,000 shares. Ramesh did not pay allotment money and first
call, on 50 shares allotted to him while Arjun did not pay the final call on his 30
shares. Journalise.

14. Butwal Ltd. Purchase assets of Rs. 3,80,000 from butwal traders. It issued equity
shares of Rs. 10 each fully paid in satisfaction of their claim. What entries will be
made in case such issue is a) at par, (b) at discount of 5% and (c ) at premium of
25%.

15. Hari Khadka was holding 20 shares of Rs. 10 each on which he paid Rs. 2 on
application but could not pay Rs.3 on allotment and Rs. 1 on first call. Directors
forfeited the shares. Give Journal entry needed for recording the forfeiture of shares.

16. Y company Ltd. Forfeited 300 shares of Rs.. 10 each Rs. 7 per share called up, on
which Rs. 2 on application and Rs. 3 on allotment was received Rs. 2 on first call
remained unpaid. Pass Journal entries regarding forefeiture.

17. Anil Gurung was hoding 30 shares of Rs. 10 each of X Ltd., issued at 10% discount.
He paid Rs.2 on application but could not pay the allotment money of Rs.3 and his
shares were forfeited. Make Journal entries for the forfeiture of shares.

18. Dabangg company forfeits 1000 shares of Rs. 10 each issued at Rs. 9 payable as to
Rs. 2 on application, Rs. 3 on allotment and the balance in first and final call. Pass the
journal entries for forfeiture of shares due to the non-payment of the call amount.

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 19. Malika Ltd. Issued shares of Rs. 10 each at 10% premium payable as follows:

On application Rs.2

On Allotment Rs. 3 (including premium)

On first call Rs. 2

On Final Call Rs. 4

Mahesh who was holding 50 shares did not pay his allotment and first call and his
shares were forfeited. Suresh, who was holding 30 shares, did not pay first call and
his shares also were foreited. Journalize transactions relating to forfeiture of shares.

20. Fewa Ltd. Issued 1,00,000 shares of Rs. 10 each at Rs. 12 payable as follows:

Rs. 2 on application

Rs. 5 on allotment (including premium)

Rs. 2 on first call and

Rs. 3 on final call

The company did not make final call. Sundari, a holder of 1,000 shares, failed to pay
allotment and first call money. Directors forfeited her shares. Pass journal entries in
the books of the company and prepare the balance sheet.

21. Panda Limited invited application for 30,000 shares of Rs. 100 each at a premium of
Rs, 10 per share. The amount is payable as follows: on application Rs. 25, on
allotment Rs. 35 (including premium), on first call Rs. 25 and on final call Rs. 25.

The applications were received for 12,000 shares and these were accepted in full.
All money due was received except the first and final call money on 300 shares,
which were forfeited.

You are required to pass journal entries, ledger accounts and balance sheet.

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 22. Unilever Nepal ltd. Issued for public subscription 8,000 equity share of Rs. 10 each
at a premium of Rs, 2 per share payable as under.

On Application Rs. 2 per share

On Allotment Rs. 5 per share (Including Premium)

On first call Rs. 2 per share

On Final call Rs. 3 per share

Applications were received for 12,000 shares. Allotment was made in pro-
rata to the applications of 9600 shares, the remaining applications were refused.
Money overpaid on application was applied towards amount due on allotment.

Mr. Krishna to whom 320 shares were allotted, failed to pay the allotment
money and Mr. Rajendra to whom 400 shares were allotted, failed to pay the two
calls. These shares were subsequently forfeited after the final call was made

23. Golgappa company ltd. Forfeits 1000 shares of Rs. 10 each Rs 8 paid up for the non-
payment of final call of Rs. 2. The company re-issued these share as fully paid for
Rs. 6 per share. Pass journal entries for the forfeiture and re-issue of shares

24. D company ltd. Forfeits 100 shares of Rs. 10 each, originally issued at a premium of
Rs, 2 per share. The shareholder paid Rs. 4 per share on application and did not pay
the allotment money of Rs. 4 per share (including premium) and call of Rs. 4 per
share. The shares are subsequently issued at Rs. 11 per share fully paid. Pass journal
entries for forfeiture and re-issue of forfeited shares.

25. Mr. Rajan held 300 shares of Rs. 10 each, which were issued at a discount of 10%,
amount being payable Rs. 2 on application, Rs. 2 on allotment and balance on first
and final call. Rajan did not pay first and final call. These shares were forfeited and
re-issue at Rs. 8 each. Give the journal entries for forfeiture and re-issue of forfeited
shares.

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 26. Oriental Hotel Ltd invited application for 10,000 shares of Rs. 100 each at a discount
of 6% payable as follows:

On Application Rs. 25

On Allotment Rs. 34

On First and Final Call Rs. 35

The application received were for 9,000 shares and all of these were accepted. All
money due were received except first and final call on 100 shares which were
forfeited. BOD of the company decided to refund the forfeited amount. 50 shares
were re-issued @ Rs. 90 as fully paid. Pass Journal Entries in the Books of the
Company.

27. Kaski Shoe Ltd. Had allotted 10,000 shares to application for 14,000 shares on a
pro-rata basis. The amount payable was Rs.2 on application, Rs. 5 on allotment
(including premium of Rs. 2 each), Rs. 3 on first call and Rs. 2 on final call. Bikas
failed to pay the first call and final call on his 300 shares. BOD decided to refund the
amount of forfeiture. All the shares were forfeited and out of them 200 shares were
re-issued @ Rs. 9 per share. Give the journal entries.

28. A limited company issued a prospectus inviting applications for 2,000 equity shares
of Rs. 10 each at premium of Rs. 2 per share payable as follows:

On application Rs.2

On allotment Rs. 5 (including premium)

On first call Rs. 3

On final call Rs. 2

Applications were received for 3,000 shares and pro-rata allotment was made on
the applications for 2,400 shares. Money overpaid on applications was employed on
account of sum due on allotment.

Messi to whom 40 shares were allotted, failed to pay the allotment money and on
his subsequent failure to pay the first call, his shares were forfeited. Ronaldinho, the
holder of 60 shares, failed to pay the two calls, and his shares were forfeited after
the second fall.

Of these forfeited, 80 shares were sold to Pedro credited as fully paid @ Rs. 11 per
share, the whole of Messi’s shares being included.

Pass the necessary journal entries and prepare the cash book of the company.
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 29. Maha Co. Ltd. Issued a prospectus inviting application for 50,000 shares of Rs. 10
each. These shares were issued at par on the following terms: Rs. 3 on application,
Rs. 4 on allotment, Rs. 2 on first call and Rs. 1 on final call.

Applications were received for 60,000 shares. Allotment were made on the
following basis:

a) To application for 10,000 shares -in full

b) To application for 20,000 shares -15,000 shares
c) To applications for 30,000 shares -25,000 shares

All excess amount paid on application is to be adjusted against amount due on

allotment.

The shares were fully called and paid up except amount of allotment, first and final
call not paid by those who applied for 2,000 shares out of the group applying for
20,000 shares. All the shares on which calls were not paid were forfeited by the
board of directors.

1000 forfeited shares were re-issued as fully paid on receipt of Rs. 8 per share.
Show the journal entries in the books of Maha Co. Ltd.

30. Dhurmus Suntali Co. Ltd. Issue for public subscriptions 50,000 equity shares of Rs.
10 each at a premium of Rs. 2 per share payable as follows:

On Application Rs. 3 per share

On Allotment Rs. 5 per share (Including Premium)

On First Call Rs. 2 per share

On Final Call Rs. 2 per share

Applications were received for 75,000 shares. Allotment was made pro-rata
to the applicants of 60,000 shares, the remaining applications being refunded.

Mr. Subash to whom 500 shares allotted failed to pay allotment money. On
his subsequent failure to pay first call and final call, his shares were forfeited. Of
those 400 shares were re-issued to Mr. Shyam as fully paid at Rs. 8 per share.

Show the necessary Journal Entries to record the above transactions.

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 31. A holds 200 shares of Rs. 10 each on which he has paid Rs. 2 as application money. B
holds 400 shares of Rs. 10 each on which he has paid Rs. 2 per share as application
money and Rs. 3 per shares on allotment money. C holds 300 shares of Rs. 10 each
and has paid Rs. 2 on application, Rs. 3 on allotment and Rs. 3 on the first call. They
all fail to pay their arrers on the second and final call of Rs. 2 per share and the
directors, forfeited shares.

The shares are re-issued subsequently for Rs. 12 per share, fully paid-up. Journalise
the transactions relating to the forfeiture and re-issue in the books of the issuing
company.

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