Sarthaks Test
+2 votes
in Accounts by (64.1k points)

Eastern Company Limited, having an authorised capital of Rs.10,00,000 in shares of Rs.10 each, issued 50,000 shares at a premium of Rs.3 per share payable as follows :

On applicationRs.3 per share
On allotment ( including premium)Rs.5 per share                        
On First call ( due three months after allotment) and the balance as and when required.3 per share                     

Applications were received for 60,000 shares and the directors allotted the shares as follows :

(a) Applicants for 40,000 shares received shares, in full.

(b) Applicants for 15,000 shares received an allotment of 8,000 shares. 

(c) Applicants for 500 shares received 200 shares on allotment, excess money being returned. 

All amounts due on allotment were received. The first call was duly made and the money was received with the exception of the call due on 100 shares. Give journal and cash book entries to record these transactions of the company. Also prepare the Balance Sheet of the company.

1 Answer

+2 votes
by (106k points)
selected by
Best answer

Note: in the category C,500 and 200 shares be read as 5,000 and 2,000

Working Note

(i) Amount transferred to share capital on application

(ii) Amount transferred to share allotment on application

(iii) Amount Received on the allotment 

by (10 points)
The excess money is returned!

Welcome to Sarthaks eConnect: A unique platform where students can interact with teachers/experts/students to get solutions to their queries. Students (upto class 10+2) preparing for All Government Exams, CBSE Board Exam, ICSE Board Exam, State Board Exam, JEE (Mains+Advance) and NEET can ask questions from any subject and get quick answers by subject teachers/ experts/mentors/students.