Question

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 application	Rs.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.

Answer 1

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 

Comments

The excess money is returned!
3000×3