Question

The Century Ltd. issued 8,000 shares of Rs 100 at a premium of 10% payable as under-

On Application	Rs 25	On Allotment	Rs 40 (including premium)
On First Call	Rs 20	On Second Call	Rs 25

Company called up allotment and both the calls which were duly received except Ramesh to whom 500 shares were allotted failed to pay allotment and calls. Prepare Journal of Century Ltd.

Answer 1

Books of Century Ltd

Journal Entry

Working Notes:

Calls-in-Arrears on Share Allotment = 500 x 40 = Rs. 20,000 (including premium of Rs.10)

Calls-in-Arrears on First Call = 500 x 20 = Rs.10,000

Calls-in-Arrears on Final Call = 500 x 25 = Rs. 12,500